Defining Salary, Allowances and Additional Payments

Circular 23 provides detailed definitions on salary, allowances, and other additional payments per the labour contract. It is noteworthy that from 1 January 2016, allowances shall be included into the base for compulsory insurance contributions and from 1 January 2018, additional other payments will also be included into that base.

Due date of salary payment

For employees who receive salary on a monthly basis, salary is required to be paid in the month when the employee works.

Overtime payment for overtime working hours incurred at night

Circular 23 clearly stipulates on the overtime payment for overtime working hours incurred at night time as below:

Overtime incurred in Overtime payment
Normal work days:

Employees do not work overtime during day time (before working overtime at night time)

Employees work overtime during day time (before working overtime at night time)

 

50%A + 30%A + 20%*A = 200%A

150%A + 30%A + 20%*150%*A = 210%A

Weekend 200%A + 30%A + 20%*(200%A) = 270%A
Public holiday 300%A + 30%A + 20%*(300%A) = 390%A

Note:

  • A is the hourly salary rate for normal work days.
  • 30% is the minimum rate applied (i.e. the employer can apply a higher rate).

Effectiveness of Circular 23

Circular 23 takes effect from 8 August 2015. However, the implementation of salary system provided under Circular 23 is in line with the effective date of Decree 05, i.e. 1 March 2015.

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