Vietnam trade union fee: what employers must pay

Vietnam trade union fee is a cost that most employers carry, and it is easy to get wrong. Under Article 26 of the Law on Trade Union, an employer pays 2 percent of its salary fund, and members of the union pay their own dues. This note explains each payment in plain terms. Treat it as general information only. For your own payroll, a Vietnamese labor lawyer can confirm the fee base.

The two payments in short

There are two separate payments. They have different payers and different bases.

The first is the union fund. The employer pays it. It equals 2 percent of the salary fund that is used as the basis for social insurance contributions.

The second is member dues. Each union member pays it from their own pay. Staff who are not members do not pay dues. The amount is set by the Charter of the Vietnam Trade Union, not by the employer.

The same law lists four sources of union money. They are member dues, the employer's 2 percent, support from the state budget, and other lawful income. Only the first two touch a normal company.

Source: Law on Trade Union, Law No. 12/2012/QH13, Article 26, Vietnamese text on Wikisource (vi.wikisource.org).

Which law sets the rule

The National Assembly adopted the Law on Trade Union on 20 June 2012. It took effect on 1 January 2013 and replaced the older law of 1990. Article 22 lists the duties of agencies, organisations and enterprises toward the union. One of them is to provide working conditions for union officers and to pay the union fund. Articles 24, 25 and 26 give the detail.

Check the law itself, in the original Vietnamese, when you set up your payroll process. Government guidance on how to apply it can add detail, so ask your accountant which guidance your local union office follows.

Note that the law words the 2 percent as a duty of the employer. It does not make the payment depend on how big the company is.

Sources: Law No. 12/2012/QH13, adoption and effective dates (Article 32), and Articles 22 to 26, Wikisource.

How the 2 percent is counted

The base is the salary fund used for social insurance. It is not total cash paid to staff. Pay that is outside social insurance, or staff who are not covered, are outside the base.

A simple example shows the idea. If the social insurance salary fund for a month is 500 million VND, the 2 percent payment is 10 million VND. The figures here are only an example.

Because the base follows the social insurance salary, your payroll team can start from the same list it already uses for social insurance. That keeps the two calculations in line.

Budget for changes during the year. When you hire, give a raise or change an allowance that counts for social insurance, the base moves, and so does the 2 percent. Review the figure every time payroll changes in a meaningful way, and note it in your cost plan for the next year.

Source: Law No. 12/2012/QH13, Article 26.

Member dues

The law does not set the dues rate in its own text. Article 26 says members pay dues as set by the Charter of the Vietnam Trade Union. Because the rate sits in the charter and not in the law, check the current rate with your local union office before you plan your payroll.

Dues come out of the worker's own pay. They are not an extra cost for the employer, but the employer usually collects them through payroll and passes them on to the union.

Tell new staff early how dues work. A short note in the onboarding pack avoids questions later.

Source: Law No. 12/2012/QH13, Article 26, Wikisource.

What employers should do now

Use this short list to check your own position.

• Confirm that the 2 percent is in your monthly payroll cost.
• Check that the base matches your social insurance salary list.
• Separate the employer's 2 percent from members' dues in your books.
• Keep payment records. An inspection may ask for them.
• Ask your accountant or the local union office for the payment dates and the account details.

The union also has rights in return. Under Article 24, part-time union officers may use working hours for union work: 24 hours a month for a grassroots union chair or deputy chair, and 12 hours a month for committee members, team leaders and deputy team leaders. This comes out of paid working time. Plan for it in your staffing.

When a case is unclear, such as a new company with few staff or a mixed pay scheme, ask the union office in writing and keep the answer.

Source: Law No. 12/2012/QH13, Articles 22 and 24, Wikisource.

Sources

Law on Trade Union, Law No. 12/2012/QH13, adopted 20 June 2012, Vietnamese text: vi.wikisource.org/wiki/Luật_số_12/2012/QH13.