Accounting procedures for payroll and payrolldeduction at thanh nam investment construction anddevelopment trading joint stock company

BACHELOR THESIS ACCOUNTING PROCEDURES FOR PAYROLL AND PAYROLL DEDUCTION AT THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JOINT STOCK COMPANY Student name: Dang Khanh Huyen

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ACCOUNTING AND AUDITING

….    …

BACHELOR THESIS

ACCOUNTING PROCEDURES FOR PAYROLL AND PAYROLL DEDUCTION AT THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JOINT STOCK COMPANY

Student name: Dang Khanh Huyen

Student’s ID: 11182251

Class: Accounting CFAB K60

Supervisor: Assoc Prof Nguyen Thanh Hieu

I herewith formally declare that I myself have written the submitted Bachelor Thesisindependently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper.

I clearly marked and separately listed all the literature and all other sources which I employed producing this academic work, either literally or in content

Hanoi, 30/06/2022Signature

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INTRODUCTION V

MANAGEMENT OF LABOUR AND PAYROLL AT THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JOINT

STOCK COMPANY 1

1.1 Features of labour and payroll at Thanh Nam., JSC 1

1.2 The form of payment for salaries and wages applied at Thanh Nam., JSC… 4

1.2.1 Payroll policies 4

1.2.2 The forms of payment for salaries and wages 10

1.3 Policies of payroll deduction applied at Thanh Nam., JSC 12

1.4 Features of organization of labour and payroll at Thanh Nam., JSC 15

CHAPTER 2: CURRENT SITUATION OF ACCOUNTING PROCEDURES FOR PAYROLL ANF PAYROLL DEDUCTION AT THANH NAM., JSC 18

2.1 Accounting for payroll at Thanh Nam., JSC 18

2.1.1 Accounting documents 18

2.1.2 Methods applied for payroll calculation 38

2.1.3 Accounts used 40

2.1.4 Accounting procedures for payroll 41

2.2 Accounting for payroll deductions at Thanh Nam., JSC 49

2.2.1 Accounting documents 49

2.2.2 Accounts used 54

2.2.3 Accounting for procedures for payroll deductions 55

CHAPTER 3: IMPROVEMENT OF ACCOUNTING PROCEDURES FOR PAYROLL AND PAUROLL DEDUCTIONS AT THANH NAM JSC 62

3.1 Assessing the current accounting procedures for payroll and payroll deductions at Thanh Nam., JSC 62

3.1.1 Strengths 62

3.1.2 Weaknesses 64

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deductions at Thanh Nam., JSC 65

3.2.1 Management of payroll and payroll deductions 65

3.2.2 Accounting documents and documents transfer 66

3.2.3 Conditions needed for implementing proposed solutions 68

CONCLUSION 69

REFERENCES 70

iii

Table 1.1: Group of workforce at Thanh Nam., JSC 2

Table 1.2: Working index for job titles 5

Table 1.3: Salary for public holidays 7

Table 1.4: Salary for personal leave 7

Table 1.5: Other treatments 8

Table 1.6: Percentage of payroll deductions (01/01/2021 – 30/06/2021) 12

Table 1.7: Percentage of payroll deductions (01/07/2021 – 30/09/2021) 12

Table 1.8: Percentage of payroll deductions (01/10/2021 – 30/06/2022) 13

Table 1.9: Percentage of payroll deductions (01/07/2022 – 30/09/2022) 13

Table 2.1: Labor Contract 20

Table 2.2: Timesheet of office staffs 21

Table 2.3: Payroll sheet of workers at SOJO 24

Table 2.12.4: Bonus payment sheet for New Year 35

Table 2.12.5: Advance Payment Request 37

Table 2.12.6: Detailed book (Account 334) 44

Table 2.7: General Ledger (Account 334) 48

Table 2.8: Sick leave certificate 50

Table 2.9: Social insurance section 51

Table 2.10: Payment slip 52

Table 2.11: Insurance premium sheet 53

Table 2.12: Detailed book (Account 3383) 57

Table 2.13: Detailed book (Account 3384) 58

Table 2.14: Detailed book (Account 3385) 59

Table 2.15: General Journal (Payroll deductions) 60

Table 3.1: Payroll sheet of construction department 67

iv

To begin with, for every employee, wages and salaries take a significant role to apply for a vacancy at a company The remuneration is a main source of income to make up their waste labour Therefore, a reasonable income for workers needs to satisfy the basis of productivity and minimum living standards In addition, the employees take notice of salary disciplines detailed in remuneration regime in order

to determine that whether or not they are fit for the job

For business sector, one of the primary objectives to manage an organisation effectively and efficiently is the payroll management It is clear that the payroll focuses not only on remuneration regime but also on measure of staffs’ performance.The managers will evaluate the quantity and quality of labour through the payroll forthe purpose of optimizing labour costs From that point, the company can adjust the plan of staff allocation, for example, according to each product price as well as distribution and administrative costs Moreover, based on workers’ information on the payroll, the business also can prepare some contingency plans for the shortage orsurplus labor events to occur

In order to comprehend how payroll is created and how the use of labour ability is effective and efficient, the thesis is built with the aim of studying, analysing and assessing the accounting procedures for payroll and payroll deduction at Thanh Naminvestment construction and development trading joint stock company As a result, the thesis provides some related recommendations to the improvement of the salary and salary deduction procedures

The scope of the thesis consists of the Accounting Department of Thanh Nam., JSC There are three main parts involved in the thesis as following:

Chapter 1: Features of labour and payroll and management of labour and payroll at Thanh Nam investment construction and development trading joint stock company.Chapter 2: Current situation of accounting procedures for payroll and payroll deduction at Thanh Nam investment construction and development trading joint stock company

Chapter 3: Improvement of accounting procedures for payroll and payroll deduction

at Thanh Nam investment construction and development trading joint stock company

v

MANAGEMENT OF LABOUR AND PAYROLL AT THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JOINT STOCK COMPANY.

1.1 Features of labour and payroll at Thanh Nam., JSC.

Thanh Nam., JSC actives in construction field as a subcontractor The company provides mostly construction services for a wide range of construction projects like mixed-used commercial projects, residential projects and education projects Due to the features of construction industry as well as each kind of building projects, the workforce of the company is required high standards of age, health, gender, technical level and experience As a result, Thanh Nam., JSC owns a ad-hoc labour force which comprises two types of objects: direct workers and indirect workers

 The direct workers often serve with short-term contracts (under one year) Hence, they do not contribute for the social insurance, health insurance, unemployment insurance They are bricklayers, masons, welders, plumbers etc who incline to work as manual employees at the construction site completely In accordance with the features of this group, the criteria for the recruitment depend on significant factors such as whether the candidates are

of working age (at least 18 years of age according to Labor Code 2019), whether they meet the health requirement for the job, whether they are male

or female, and whether they are skilled workers Therefore, the direct labor are young mostly and in rude health Additionally, they are not required to own any professional certificate but they should have practical experience

 The indirect workers as management officers, quantity surveyors, quality controllors etc who work under long-term contracts so they have responsibility to participate in the social insurance, health insurance, unemployment insurance totally Furthermore, unlike direct labour, office staffs need to have specialized knowledge so they mostly graduated from related college or university They direct the implementation of a plan and manage the direct workers to ensure that the projects are performed as expected Accordingly, the office staffs can work at the company’s office or atthe construction site with the direct employees

1

For the new employees, the firm plans training programmes which are combined with a two month probationary period The seniors train for the new workers and theprofessional train for the new staff as well as officers to follow the set procedure very precisely Especially, the new entrant who works in the business as an apprentice are trained and evaluated carefully by the experts as the managers After the training period, individuals completing the scheme successfully would officially sign the labor contract

Due to the unique features of the construction labor, the number of labor force at the company in the period from 2019 to 2021 is also interested and shown as below:No

Table 1.1: Group of workforce at Thanh Nam., JSC

It is noticeable that the number of human resource at Thanh Nam., JSC over the years has changed significantly For the indirect labour, there were some slight variation in the number because they signed the long-term contracts and that means they are required a high commitment to the business (motivation, loyalty and job satisfaction) In general, the quantity of indirect staffs had increased slightly by 3 individuals over 3 years from 2019 to 2021 However, the number of direct workers

is very numerous and continuously fluctuates from year to year or evenly in a year For instance, there was a considerable decrease in the quantity of direct employees from 329 workers in 2019 to 426 workers in 2021 The major reason for this decline

is that the Covid-19 situation in 2020 was turned seriously with the dramatical increase in the number of cases and the business was under orders to put a stop to allconstruction projects Therefore, all direct employees operating at construction sites stopped their work for a long time Until 2021, the situation returned to normal leading the return of work so the number of direct labor boost substantially 2

In addition, the number of direct labor is more volatile than indirect labor In fact, the fluctuation is influenced by the unique characteristics of construction field A construction project does not provide a stable job over the years for direct labor due

to its “one-off nature” Consequently, the direct labour engaged in construction area

is seasonal and migratory employed on a piece-rate basis They are essentially dedicated to farming during a certain period or climatic conditions in a year During the rest of the year, they are engaged as construction labor for intermittent short durations They do not reflect their contribution in construction as an occupation Accordingly, the degree of commitment they have to the profession is not really extensive and they have little loyalty and motivation to enhance the necessary knowledge and skill of the chosen trade

Due to the marked differences between the two kinds of labour, Thanh Nam., JSC has human resource management (HRM) to developing and maintaining an effectivelabour force which matches the business’s requirements Unlike the indirect staffs, the direct employees need to be managed in a strict and systematic way to avoid a shortage of human resources as well as to ensure cost-effectiveness Human resourcedepartment and construction department coordinates perfectly for the management

of the direct workforce

As a subcontractor, the company has a wide range of construction contracts as well

as projects at the same time to expand the business Hence, setting up reasonable plans for rotation of the direct employees is very crucial because the managers need

to take full advantage of this numerous workforce

3

1.2.1 Payroll policies

Thanh Nam., JSC institutes the payroll policies to run the payroll procedure smoothly as well as guarantee workforce of accurate and timely payment of salaries and wages The salary policies, thus, perform a huge role in maintaining the staff morale and the stability of business finance

Principles for formulation of payroll

In compliance with Decree 49/2013/ND-CP, the firm also sets up some principles for formulation of payroll as below

 Pay scale is based on the region-based minimum wage announced by the Government to adjust the salaries and wages of each job title to the finance ofthe company:

+ The lowest salary for the simplest position but not less than the based minimum wage

region-+ The lowest salary for the simplest position with training or apprenticeship

is greater than 7% the region-based minimum wage

+ With the same job title, employees working in heavy and dangerous conditions will be paid at least 5% higher salary than workers working in normal conditions

Because as the rule, if the enterprise with the current salaries and wages does not meet the above conditions, it will have to adjust the payroll, and the enterprises find that each year the region-based minimum wage is likely to increase, the company always sets the salary equal to or higher than the region-based minimum wage to save time as well as costs

 The salary fund of the company is only used for salary payment to employeesworking at the company and not for other purposes

 The salaries and wages are paid in full for employees directly and timely, according to the productivity, quality and efficiency

 The salaries and wages paid to the direct labor must be in line with the amount of work and not be lower than the arm’s length price

 The salaries and wages paid to the indirect labor must be appropriate to qualifications, commitment, competencies; degree of responsibilities of everyjob titles

4

Accountants also calculate the payroll for indirect employees based on their workingindex related to their position By way of illustration, the specific indexes used for the construction department are given in the table below.

Table 1.2: Working index for job titles

In general, the table shows that the working index ensures a clear difference in salary in accordance with scalar chain, from the most senior to the most junior in thebusiness The higher the position, the higher the salary rate For example, the director has the highest index while the quantity surveyor (QS) and the engineer position have the lowest index compared with the other positions in the construction department The gap among scalar chains indicates a correspondence of authority and responsibility assigned to the top management Furthermore, the distinction continues to define in the same personnel level likes engineer and QS job titles The distinction is the time to hold the rank of working index In the same level, the staff enjoys each index to determine each level of payment depended on the working time As an illustration, the index 1.0 applies to the new QS or engineer working for the business less than one year as an initial stage and the degree of working index for this position will improve at the following stages such as 1.1 for the next two years, 1.3 for at least three years

Due to the attractive salary scales, the company also forms a list of conditions for promoting working index as well as salary level

 Ensuring the required time holding the salary level

 Completion of a training course with an authorised training employer to ensure the necessary profession and skills

5

 During the tenure, members are not in breach of regulations but from reprimand or higher.

 In some special cases, the BOD will consider and make a decision to include

in a list of payroll adjustment

However, the staffs can be dropped by 1or 2 salary ranks if they do not respond the compulsory conditions set forth by the company

Salary payment time

The company perform the salary and wage schedule on 15th of every month for the indirect staffs and on the last day of the month for the direct workers

Payment methods

The salaries and wages shall be paid in cash or transferred to the employees’ personal bank account The employees can choose one of the salary payment forms and inform the accountant department In case of bank transfer, the firm shall pay the transfer fees

For the indirect labor, the company fixes the cash method to ensure the accuracy

Working time

The regular working time of the enterprise is 7 hours per working day The companysets up the working regime from 8 am to 11:30 am in the morning and from 1:30 pm

to 5 pm in the afternoon everyday from Monday to Saturday

As a result, the workers have two hours for breaks and lunches For the indirect staffs, the company has a policy to provide lunch money in accordance with the finance

Salary for public holidays

According to Labor Code 2019, from January 1 , 2021, the employees gain the st

benefit of 11 public holidays every single year with full of the basic salary or the salary stated at the labor contracts

1 Calender New Year 01 (January 1 of solar calendar) Calculated on

6

the basic salary or the salary stated

in the labor contract

2 Lunar New Year

05 days (1 day at the end of the year, 4 days of the following year)

3 Victory Day 01 day (April 30th of solar

basic salary or the salary stated in the labor contracts

2 Marriage of biological child or

3 Father, Mother, Father-in-law,

Mother-in-law, spouse, or child

03 days

7

 An indirect employee who has been working for an employer for less than 12 months will have a number of paid leave days proportional to the number of working months.

 The annual leave of an indirect worker shall improve by 01 day for every 05 years of employment with the same employer

Overtime rules

The company applies the overtime rules for the laborforce directly involving in the construction sites on the basis of the States’ regulation The overtime is computed byday due to the features of the construction company That means the direct workers could work on Sunday as their overtime To protect and prioritize the interest of its employees, the company has stated the salary for one overtime day is double a standard working day as prescribed

Payroll deductions

The policy also states the types of salaries and wages deductions that the company isrequired by law to withhold from its indirect workforce’s pay checks The mandatory payroll deductions include Social Insurance, Health Insurance, Unemployment Insurance, Employers’ Liability Insurance

3 Father, Mother, Father-in-law, Mother-in-law,

spouse, or child was death

1.000.000 VND

8

Note: The treatments for each events shall be changed every year at the discretion ofthe company.

Bonuses

The enterprise details a list of bonuses for the employees on the public holidays and

some personal leaves (Table 1.5) Moreover, the company will also hold a party for

the staffs on the basis of business performance if the projects is done successfully

 Lunch allowance: Depend on the arms’ length price, the lunch price might be changed each month but not excess 730.000 VND/person/month following the current regulation

 Uniform allowance: The expenditure on clothing in cash for employees does not exceed 5 million VND/person/year

 Travel allowance: The firm will pay all the expenditure likes petrol, toll only

if the staffs travel by the cars of company for moving among construction sites or for business

9

As mentioned above, two forms of workforce at Thanh Nam., JSC are very different

so the company applies two forms of payroll methods for each types of labor force: piece-based salary and time-based salary

a) Piece-based salary

This mode of payroll method is applied for the direct labor who work directly at construction sites

Salary in a month = Contract daily wage x Number of working days per month

Equation 1-1: Piece-based salary formular

 Contract daily wage: would be fixed on the labor contract Moreover, it depends on the job titles such as trainee/apprentice or skilled worker It is noticeable that the fixed wages are often changed to appropriate for the labor market rather than any type of business

 Number of working days per month: is calculated from the monthly worker timesheet There is no fixed working days or standard workdays per month for piece-based salary payment because of the time quality of each project

As a result, the number of working days would increase or decrease in each month

 Overtime: In the case of work requirements, the direct employees often work overtime on Sunday Therefore, the computation for the overtime is that the Sunday wage will be double the normal day if the employees work on Sunday

Overall, the piece-based salary payment is appropriate for the direct labor because this kind of workforce is mostly the seasonable employees The method will benefit both employers and employees Widely scattered and varied construction projects undertaken by the construction firm make it necessary to hire the local workforce to

a very large extent Workers follow the availability of job opportunities in the area and constantly change their employment For workers, therefore, they can earn an additional source income in return for their productivity without binding to develop their career at any companies The employers can also gain benefit from this methods when they can control the labor costs to output as well as productivity accurately The business, thus, binds budgeted labour expenditure to what is actuallypaid out

10

The company use the time-based salary payment to compute the salary for the indirect workforce likes administrators, accountants, engineers etc The salary payments are made monthly based on accrual daily payment, actual working days, vocation, professional and technical skills of staffs in a month

The construction firm sets up a salary formula in accordance with the characteristics

of the indirect staffs as can be seen below

Gross salary per month = Monthly basic salary level x () + Diligence bonus x

Number of Working days

Equation 1-2: Time-based salary formular

 Until December 2021, the basic salary level shall be higher than 7% the

region-based minimum wages for enterprises located in region I which is

paid to a skilled worker according to Decree 90/2019/ND-CP

 Working days are based on the employee timesheet

 The most noticeable point in this formula is working index which would create a salary rank Working index is identified based on job titles and time

to hold the rank job titles as seen as Table 1.2.

 The diligence bonus shall depend on the business performance each year and will be multiplied with the working days to calculate the monthly gross salaryfor an office staffs

11

After signing the formal labor contract, the indirect labor of the company has been eligible to enroll in Social Insurance, Health Insurance, Unemployment Insurance according to the current decision No.595/QD-BHXH Trade union fees are not involved in the salary deductions applied at Thanh Nam., JSC because the company does not establish trade uion.

The following tables will show the salary deductions that the firm applies on the basis of Resolution 116/NQ-CP dated 24/09/2021 by the State:

deductions expenses (%) salary (%) Total

As stated in Resolution 116/NQ-CP dated 24/09/2021 by the State, the company deducts social insurance fund at prescribed rate of 25.5% of the total salary fund for its laborforce before June 30 2021, in which the company charged at 17.5% (17% th

for the actual social insurance amount and the remaining 0.5% for insurance for occupational accidents) and the employee charged at 8% From July 1 2021 to June st

30th 2022, due to the limited operation of the business under the impact of the Covid-19 pandemic, the State has taxed free insurance for occupational accidents forthe enterprise, so the social insurance fund that the comapny has paid for the participants was reduce to the percentage of 17

The social insurance fund pays for the employee's leave to enjoy maternity benefits (including public holidays, New Year holidays, weekends)

13

During the period of pregnancy, they are entitled to take leave to go for antenatal care 5 times, each time a day, if they are far from a medical facility or the pregnant woman has a medical condition or an abnormal pregnancy, she shall be entitled to 2 days off for each visit pregnancy

Health Insurance

One of the compulsory salary deductions for the indirect workforce is health insurance premiums which is computed and withheld at the percentage of 4.5 of the total salary fund by the employer The employees who be paid the health insurance could gain the benefits from serving, protecting and taking care of their health because the Insurance Agency will pay for medical examination and treatment expenditure at a certain amount stated by the regulation

The health insurance fund is formed by the allocation based on the required proportion on the payment that will be paid to the company’s staffs during the period Under the existing regime, Thanh Nam., JSC makes the deduction of the health insurance fund at the rate of 4.5% of the total monthly actual salary fund, 3%

of which is paid by the company’s expenses and 1.5% by the employees’ salary Thehealth insurance fund was established to cover the costs of medical assessment and treatments for the participants in the fund

The entire health insurance fund is currently submitted to specialized agencies to manage and subsidize employees through the health network

Unemployment Insurance

Unemployment Insurance is issued to support the employees in the market economy

by assisting the apprentices in finding jobs and bringing them back to the jobs as soon as possible

Every month, based on the total salary fund, the enterprise will withdraw 2% (before30/09/2021) or 1% (01/10/2021 – 30/09/2022) of the statutory pay rate Therefore, before September 30 , 2021, the company takes a responsibility to pay 1% as its th

expenses and the insurance participants only pay 1% of the statutory rate In the period from October 1 , 2021 to September 30 , 2022, the company is exempted st th

from health insurance payment for its employees at the rate of 0% and the the insurance participants still pay health insurance at the rate of 1% which is deducted

to their salary

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Thanh Nam Responsibility

 To instruct and lead the related units in strictly accordance with the regulation

of labor, salary, income

 In order to fulfill the management strategy of the enterprise and the other legal requirements, the firm shall consider modifying, supplementing, amending the regulations throughout the implementation phase

Divisions Responsibility

 To allocate labor reasonably so that workers may do their assigned duties with the maximum level of efficiency, gradually grow up salaries as well as incomes, maintain and advance employees' skills, and provide the best outcomes for enterprises

 Employees are reviewed and ranked on a monthly basis in line with the company's assessment methodology, which ensures the rights of employees and motivates them to complete their responsibilities successfully

Director

The Director of Thanh Nam., JSC is the legal representative of the company with thehighest accountability for the law Besides, the director is the individual having the highest responsibility for the total business activities in order to maximize economic efficiency

Admin & Human Resources Department

Arrange the recruitment, allotting, assessment, arrangement officials; Take responsibility for the strategies connected with the compensation strategy and the system for workers; Monthly send supporting records connected with accounting division for calculating and payments of salary and wages For instance, employee timesheet monthly or per week, employee information, etc

Accounting department

Consult the general director and the vice directors responsible for finance for the executives the accompanying areas: accounting, finance, repayment of financial contract, arranging, coordinating accounting activities all through the organization; Directly carry out monetary systems, strategies, bookkeeping, measurements and overseeing expenses of the firm; Collect supporting records from different offices for bookkeeping; Prepare budget summaries, tax report correctly to mirror the 15

performance; Analysis of financial position, liabilities, etc of the firm and report to general director.

Recruitment

In general, the human resources division rapidly and promptly updates information about the company on the well-known Vietnamese job search websites and official corporate communication channels In a meeting with management, the manager will offers a recommendation if a department need more personnel The decision is approved by the director and forwarded to the admin & HR division after the requesthas been accepted The human resources department has a detailed strategy for hiring, including how long it will take, what is the criteria for the vacancy, and who will be in charge of it, etc The HR department will utilize some popular methods to discover potential individuals such as posting the recruitment, looking for available resumes on recruitment websites, using a brokerage firm to hunt for work, etc whichdepends on the nature of the job and the standards of the employee for each position.The responsible individual will receive and select the applications after that The director will receive the qualifying documents, and HR staffs will get in touch with the applicants by email or phone number to schedule an interviews with the director,the head of HR and the head of department After the process of the recruitment, the organization will offer vocational training and probation to the qualified candidates with at least 85% of the full salary If the task is completed within three months, the employee will continue working and sign the official labor contract with the company director following the probation The human resources department will be

in charge of receiving, storing, and managing the employees’ records

Because of two different types of laborforce at Thanh Nam., JSC, there are some special differences between the indirect labor and the direct labor as below

 For indirect labor:

- Work as management officers, quantity surveyors, quality controllors, etc

- Participate in the social insurance, health insurance, unemployment insurance, insurance for occupational accidents

- Bachelor of economics/bachelor of social/engineering is recruited requiring high professional skills, with experience is an advantage

 For direct labor:

16

- Work as bricklayers, masons, welders, plumbers etc, who incline to work

as manual employees at the construction site completely

- Must be at least 18 years of age according to Labor Code 2019

- Not required to own any professional certificate but they should have practical experience

Labor discipline

 The General Director decides the number of teams, individuals, and the level

of reward or discipline depending on the suggestion of the head of department

 The General Director submits the adjustment of the minimum remuneration level to the Board of Directors for consideration

Building and approving plans for payment to employee

 Before issuing a formal announcement, the General Director must approve the draft salaries and wages plan, estimates, budget which are given by the Human Resources Department Based on the timesheet and the company's payroll policies, the HR department computes salaries and wages on a monthly basis

 The General Director submits the adjustment of the minimum remuneration level to the Board of Directors for consideration

 With additional allowances: The Office must examine and propose to the General Director for decision whether to enhance allowances for the jobs depending on the volume and special nature of business

17

PROCEDURES FOR PAYROLL ANF PAYROLL DEDUCTION AT

THANH NAM., JSC 2.1 Accounting for payroll at Thanh Nam., JSC

2.1.1 Accounting documents

In compliance with Circular 133/2016/TT-BTC issued by the Military of Finance, the enterprise are complying a list of accounting vouchers related to accounting for payroll and payroll deductions as seen as below:

- Labor contract for every single employee in which terms, benefits, regime, remuneration, etc are stated clearly and signed by the director

- Timesheet under Form No.01a – LĐTL: This is the documented foundation for the salaries and wages payment in accordance with each employee's actual working days By department time, this table is created each month An appointed individual of the firm must verify the attendance of every every employee and complete the timesheet every single day The construction department's timesheet for October 2021and the workers’ timesheet for July 2021 are shown in the samples below

- Payroll sheet: The company has designed two forms of payroll sheet: one for its office staffs and one for the workers at the construction sites As a result, the firm has made some modifications to the Form No.02 – LĐTL

to suit the nature of each type of its workforce

Each payroll sheet in each month shall be prepared 2 or 3 copies but written on paper once

The payroll sheet must be gathered into books with clearly number of books as well as payment vouchers It is noticeable that the sheet must be numbered sequentially in the accounting period Before money is distributed, each payroll sheet must be filled out perfectly, properly stated,and checked by the chief accountant

- Summary of payroll is establish by the accounting department at the end

of the year to report to the director

18

- Bonus payment sheet is used on the public holiday such as New Year, Independence Day, etc This sheet is included with the BOD's award decision.

- Summary of bonus payment

- Payment order

- Request in advance

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom – Happiness

LABOR CONTRACT(No: 042 /2021/HĐLĐ)

-o0o - Pursuant to the Labor Code No 10/2012/QH2013 passed by the National Assembly of the Socialist Republic of Vietnam on June 18, 2012;

- Pursuant to the Government's Decree No 44/2013/ND-CP dated May

10, 2013 detailing and guiding the implementation of a number of articles

of the Labor Code on labor contracts;

- Based on the needs and agreement of the two parties;

Today, date month , 2021, at Thanh Nam., JSC, we include:

Party A:

Address

Phone

Business registration number

THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JOINT STOCK COMPANY

Number 5, alley 112/15/38 Dinh Cong Thuong, DinhCong ward, Hoang Mai district, Hanoi, Vietnam

Legal Representative Mr To Van Phi Nationality: Vietnamese

Position (Title) Director

ID

(Here in after referred to as “Company” or “Employer”)

19

Social insurance book

(Here in after referred to as “Company” or “Employee”)

The two parties agree to sign this Labor Contract (“Contract”) and abide by the following terms:

Article 1: Term and Contract Work

Article 2: Working mode

Article 3: B enefits, Rights and O bligations of employees

Article 4 Rights and obligations of the Employer

Article 5 Other agreements

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang Mai district, Hanoi, Vietnam

Workin

g Index Signa ture W

on T us W en T h us Fr i

1 Tô Văn Phi Director x x x x x … x x x x x 27 3.5

112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang Mai district, Hanoi, Vietnam

Department: Office

Form No.11 – LĐTL

(Issued under Circular 133/2016/T T-BTC dated August 26 , th

2016 of the Finance)

PAYROLL SHEET

December 2021

F l

N a m e Salary

G r s

n c m e

Salary deduction

F a m i y

r l e

d e

Per al Inc om e Ta x

N e

n c m e

S i g

B a i c

s l

W o

B a Ef fec tiv e sal ar y

D i B H B H B H

T o a l

n s

A s

W o r

E f e

5 8

% 1 1

%

21

ary Earni

ngs

uranc e deduc ductio n

22,58 378 ,35 2 70 ,9 41 47,2 94

496,58 7

24,200 ,000 -

16,48 378 ,35 2 70 ,9 41 47,2 94

496,58 7

11,000 ,000 4,98 3 249 ,37 5

15,73 8,118

16,25 378 ,35 2 70 ,9 41 47,2 94

496,58 7

11,000 ,000 4,76 0 238 ,11 7

15,31 378 ,35 2 70 ,9 41 47,2 94

496,58 7

15,400 ,000 -

12,00 378 ,35 2 70 ,9 41 47,2 94

496,58 7

11,000 ,000 505, 870 24, 494

11,48 1,376

12,00 378 ,35 2 70 ,9 41 47,2 94

496,58 7

11,000 ,000 505, 870 24, 889

11,48 0,981

11,28 1,740

378 ,35 2 70 ,9 41 47,2 94

496,58 7

11,000 ,000 -

Total amount of money (in words): …

THANH NAM INVESTMENT CONSTRUCTION AND

DEVELOPMENT TRADING JSC

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong

ward, Hoang Mai district, Hanoi, Vietnam

g days Signat ure W

on … M on Tu s W en T hu s Fr i

1 Bùi Văn Hà Worke

- Blank: Non-working day

Table 2.4: Timesheet of workers at

SOJO

23

DEVELOPMENT TRADING JSC

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang

Mai district, Hanoi, Vietnam

Price Total Earning s Signa ture

10,560,0 00

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang Mai district, Hanoi, Vietnam

Division: Construction

Project: VINCITY OCEAN PARK B03

Detail: Plastering and finishing

g days Signat ure W

n … Su n M on Tu s W en T hu s Fr i

- Blank: Non-working day

Table 2.6: Timesheet of workers at VINCITY

25

DEVELOPMENT TRADING JSC

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang

Mai district, Hanoi, Vietnam

Division: Construction

Project: VINCITY OCEAN PARK B03

Detail: Plastering and finishing

Earnings Signa ture

( Sign, Name )

Director

( Name, Seal )

Table 2.7: Payroll sheet of workers at VINCITY

THANH NAM INVESTMENT

CONSTRUCTION AND

DEVELOPMENT TRADING JSC

Address: Number 5,

alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang Mai district, Hanoi, Vietnam

Construction Project: PHUC DONG Detail:

Plastering and finishing

Form No.01a – LĐTL

(Issued under Circular

016/T T-BTC dated Augus

t 26 , th

2016

of the Minist

ry of Finan ce)

TIMESHEET

December 2021

F u

N a m e

T i

0 2 0 3 0 4 0 5 0 6

…2 7 2 8 2 9 3 0 3 1

T o t a l

w o r k i n g

d a y s

S i T

h F r S a S u M o

…M o T u W e T h F r

V ũ V ă T iệ n

W o

x x x x …x x 3

H

à t h

ị N â m

W o

x x x x …x x 3

0

L V ă

W o

x x x x …x x 3

26

- Blank: Non-working day

Table 2.8: Timesheet of workers at PHUC DONG

27

DEVELOPMENT TRADING JSC

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang

Mai district, Hanoi, Vietnam

Division: Construction

Project: PHUC DONG

Detail: Plastering and finishing

Earnings Signa ture

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang Mai district, Hanoi, Vietnam

Division: Construction

Project: DOI RONG

Detail: Plastering and finishing

g days Signat ure W

on … M on Tu s W en T hu s Fr i

- Blank: Non-working day

Table 2.10: Timesheet of workers at DOI RONG

29

DEVELOPMENT TRADING JSC

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang

Mai district, Hanoi, Vietnam

Division: Construction

Project: DOI RONG

Detail: Plastering and finishing

Earnings Signa ture

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang Mai district, Hanoi, Vietnam

g days Signat ure W

on … M on Tu s W en T hu s Fr i

- Blank: Non-working day

Table 2.12: Timesheet of workers at

FLC

31

DEVELOPMENT TRADING JSC

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang

Mai district, Hanoi, Vietnam

Earnings Signa ture

Address: Number 5, alley 112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang Mai district, Hanoi, Vietnam

Division: Construction

Project: GIAP BAT GELEXIMCO

Detail: Plastering and finishing

g days Signat ure W

n … Su n M on Tu s W en T hu s Fr i

- Blank: Non-working day

Table 2.14: Timesheet of workers at GIAP BAT

THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JSC Address: Number 5, alley

112/15/38 Dinh Cong Thuong, Dinh Cong ward, Hoang Mai district, Hanoi, Vietnam

Division: Construction Project: GIAP BAT GELEXIMCO Detail: Plastering and finishing

Form No.02 – LĐTL

(Issued under Circular 133/2016/T T-BTC dated August 26 , th

2016 of the Finance)

PAYROLL SHEET

December 2021

N o Full name Ti tle

W or ki ng da ys

Pric e

Total Earni ngs

Si gn at ur e

1 Bùi Thị Yến W or ke

000 8,320, 000

33