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Provision for severance allowance will be calculated for each employee based on his
(her) working duration, but surely he (she) has been working for the Company over 1
year. You can be based on salary in Dec 2002 payroll table to make provision.
We should provide a haft of monthly salary for each per each working year.
For example:
Mr. A has been working for Company for 4 years and his salary in Dec
2002 in payroll table is 3.000.000VND.
Provision for severance allowance will be calculated as follow:
= 3,000,000 x ½ month x 4 year = 6.000.000
- Number of months added to working years of employee will be considered:
less than 1 month: Zero
1 - 6 months: a half year
7 - 12 months: one year
Ex: an employee work for Company in 2 year and 4 months, his(her)
working years will be 2,5 year.
- If an employee be amended labor contract during the time they work for
Company, they will be still calculated since the initial time they work for
Company.
You can refer to Article 14 of Circular 55 for accounting treatment of that. And Pls
contact me if you need any further clarification.
Regards,