Gross 20 million, company pays 24.7 million: calculating the real cost of a role in 2026
The figure written in the contract is never the whole cost of an employee. On top of every dong of gross salary, the business pays a further 21.5% in compulsory insurance and 2% in trade union fees, before bonuses, benefits and recruitment costs. This article works through each item at the rates that apply in 2026, with worked examples for three salary levels, so that business owners and HR staff can set budgets that match the money actually leaving the company account each month.
What staff cost includes besides gross salary
When accountants draw up a payroll budget, the first line is gross salary: the amount written in the labour contract, which is also the basis for insurance contributions. But the money actually spent on an employee also includes the insurance paid by the employer, the trade union fee and items outside the payroll. The calculator at the top of the page combines the two compulsory items into one figure called "company cost per month"; the remaining items depend on each company's policy, so you add them yourself.
- Employer insurance
- 21.5%Social insurance (SI) 17%, occupational accident 0.5%, health insurance (HI) 3%, unemployment insurance (UI) 1% of the insurable salary
- Trade union fee
- 2%Calculated on the payroll used for SI contributions, under the Trade Union Law 2024 (Luật Công đoàn 2024)
- SI and HI ceiling
- 50.6 million20 times the reference level of 2,530,000 VND from 1 July 2026
- Cost multiplier
- 1.235For every 1 VND of gross salary below the ceiling, the company pays 1.235 VND
The multiplier of 1.235 is the number most worth remembering: a gross salary of 20 million costs the company 24.7 million, and a 1 million raise adds 1.235 million to the budget. It only holds while the salary sits between the regional minimum wage and the 50.6 million ceiling; above the ceiling the ratio gradually falls, because social insurance, health insurance and the trade union fee stop at the ceiling.
How much the employer pays for each item
Under the Social Insurance Law 2024 (Luật Bảo hiểm xã hội 2024), anyone working under a labour contract of one full month or longer is covered by compulsory social insurance, and the business pays a larger share than the employee. The table below also includes occupational accident and disease insurance and the trade union fee, matching the way the calculator breaks out each line.
| Item | Employer pays | Employee pays | Calculated on |
|---|---|---|---|
| Social insurance (pension, survivor benefits) | Employer pays17% | Employee pays8% | Calculated onInsurable salary, up to 50.6 million |
| Occupational accident and disease insurance | Employer pays0.5% | Employee paysNone | Calculated onSame ceiling; 0.3% if approved by the competent authority |
| Health insurance | Employer pays3% | Employee pays1.5% | Calculated onSame 50.6 million ceiling |
| Unemployment insurance | Employer pays1% | Employee pays1% | Calculated onUp to 20 times the regional minimum wage (Region I: 106.2 million) |
| Trade union fee | Employer pays2% | Employee paysNone | Calculated onPayroll used for social insurance contributions |
| Total | Employer pays23.5% | Employee pays10.5% | Calculated on |
Calculating staff cost step by step
- Gross salaryPer the contract
- Add 21.5% insuranceCapped
- Add 2% union feeOn the insurable salary
- Monthly costMultiply by 12 for the year
- Determine the salary that insurance is based on
Take the gross salary and compare it with the floor, which is the regional minimum wage, and with the 50.6 million VND ceiling for social and health insurance; unemployment insurance has its own ceiling of 20 times the regional minimum wage. Salary above the ceiling attracts no insurance.
- Apply each employer rate
Social insurance at 17%, occupational accident insurance at 0.5% and health insurance at 3% are all calculated on the same capped amount; unemployment insurance at 1% is calculated on its own capped amount. Added together, they give the insurance the company pays.
- Add the trade union fee
The fee is 2% of the payroll used for that person's social insurance contributions, so it is also calculated on the amount capped at 50.6 million. The calculator has a switch to turn this item on or off when you want to see the insurance on its own.
- Get the total monthly and annual cost
The monthly cost is gross salary plus everything the company pays on top. Multiply by 12 for the position's annual budget, excluding bonuses and benefits. The number of dependants only affects the candidate's take-home pay and does not change the company's cost.
Worked examples for three gross salaries
| Item | Gross 20 million | Gross 35 million | Gross 60 million |
|---|---|---|---|
| Social insurance 17% | Gross 20 million3,400,000 | Gross 35 million5,950,000 | Gross 60 million8,602,000 (on the 50.6 million ceiling) |
| Occupational accident 0.5% | Gross 20 million100,000 | Gross 35 million175,000 | Gross 60 million253,000 |
| Health insurance 3% | Gross 20 million600,000 | Gross 35 million1,050,000 | Gross 60 million1,518,000 |
| Unemployment insurance 1% | Gross 20 million200,000 | Gross 35 million350,000 | Gross 60 million600,000 |
| Trade union fee 2% | Gross 20 million400,000 | Gross 35 million700,000 | Gross 60 million1,012,000 |
| Employer pays on top | Gross 20 million4,700,000 | Gross 35 million8,225,000 | Gross 60 million11,985,000 |
| Company cost per month | Gross 20 million24,700,000 | Gross 35 million43,225,000 | Gross 60 million71,985,000 |
| Annual cost | Gross 20 million296,400,000 | Gross 35 million518,700,000 | Gross 60 million863,820,000 |
| Candidate take-home pay | Gross 20 million17,780,000 (0 dependants) | Gross 35 million30,843,750 (1 dependant) | Gross 60 million52,423,700 (2 dependants) |
Two points stand out. At 60 million the multiplier falls to about 1.2 instead of 1.235, because the four items calculated on the 50.6 million ceiling have stopped growing. And the gap between what the company spends and what the candidate takes home is wide: at 20 million, the company spends 24.7 million for the employee to receive 17.78 million; the 6.92 million difference is insurance on both sides plus tax. When a candidate asks for "18 million net", HR should convert it back to gross and multiply by 1.235 before agreeing.
Costs outside the payroll that belong in the budget
What the calculator cannot work out are the policy-dependent items: the 13th-month bonus, bonuses tied to business results, benefits such as private health insurance, regular health checks, company trips and lunches, plus training, a computer, a desk and recruitment costs. The usual budgeting approach is to convert everything to a monthly amount: a 13th-month bonus equal to one month's gross salary of 20 million works out at 1,666,667 VND per month; a health insurance package assumed at 3 million a year is 250,000 VND per month.
Sample budget line for one position in a headcount proposal
Position: General Accountant, based at the Hanoi office (Region I).
Gross salary per contract: 20,000,000 VND/month. Compulsory insurance paid by the company (21.5%): 4,300,000 VND. Trade union fee (2%): 400,000 VND.
Fixed cost per month: 24,700,000 VND; per year: 296,400,000 VND. Expected 13th-month bonus: 20,000,000 VND. Total annual budget for the position: 316,400,000 VND, excluding recruitment and equipment costs.
A proposal set out this way lets the approver see at once why a "20 million salary" becomes more than 316 million a year, and avoids approving the payroll budget only to discover afterwards that the insurance money is missing.
Common mistakes when calculating staff cost
- Using the net salary from the offer as the gross salary in the budget, which leaves a shortfall of about 10% to 15% from the start.
- Calculating insurance on the full salary for someone earning over 50.6 million, when four of the items have already stopped at the ceiling.
- Forgetting the 0.5% occupational accident and disease insurance in the belief that 17% is the whole of social insurance.
- Calculating the trade union fee on total income, including bonuses and allowances not subject to insurance, instead of on the payroll used for social insurance.
- Using the old reference level of 2,340,000 VND for months from July 2026 onwards, which puts the contribution ceiling lower than it really is.
- Setting the annual budget at 12 times gross salary with no lines for insurance, bonuses and recruitment.
Using the staff cost calculator on Việc Hot
Enter the gross salary, choose the region where the employee works and switch the trade union fee on or off; the calculator at the top of the page immediately shows the company's monthly cost, the candidate's take-home pay, a chart of each item and a table of annual costs. If you are working the other way round, with a budget already set and a salary still to decide for the job post, use the budget to advertised salary calculator.
Frequently asked questions
For someone working in Region I, the company pays an extra 4,300,000 VND in compulsory insurance and 400,000 VND in trade union fees, a total of 24,700,000 VND per month, or 296,400,000 VND a year before bonuses and benefits.
21.5% of the insurable salary: 17% social insurance, 0.5% occupational accident and disease insurance, 3% health insurance and 1% unemployment insurance. With the 2% trade union fee, the business pays 23.5% on top of gross salary.
No. Dependants only reduce personal income tax, which raises the employee's take-home pay; the insurance and trade union fee the company pays are still calculated on gross salary as before.
Social insurance, occupational accident insurance, health insurance and the trade union fee are calculated on no more than 50.6 million VND, which is 20 times the reference level from 1 July 2026; only unemployment insurance is calculated up to 20 times the regional minimum wage. So a gross salary of 60 million costs only 71.985 million, not 74.1 million.