Salary calculation by coefficient is a method that uses a salary coefficient multiplied by the statutory base salary to standardize income based on rank and grade. This method is mainly applied in the public sector. Clearly distinguishing between salary coefficient and salary grade not only helps employees calculate their actual income accurately but also enables them to understand their career progression path. This guide explains the key concepts, calculation formula, and core differences between coefficient-based salary and negotiated salary in enterprises.
1. What Is a Salary Coefficient?
A salary coefficient is a standardized index used to multiply the statutory base salary in order to determine the nominal salary. It reflects the employee’s educational level, job position, and seniority, especially for officials, civil servants, and public employees.
Specifically, the salary coefficient serves several key purposes.
- Classification by qualification level: Employees with a university degree typically start at a coefficient of 2.34 under the specialist rank. College-level employees may start at 2.10, while intermediate-level employees may start at 1.86.
- Legal basis for statutory contributions: The salary coefficient is the core basis for calculating Social Insurance, Health Insurance, and related allowances.
- Payroll transparency: It helps standardize compensation for equivalent positions nationwide and prevents arbitrary payroll decisions in public budget management.
- Example: A civil servant under the specialist rank at grade 1 has a salary coefficient of 2.34. When promoted to grade 2, the coefficient increases to 2.67.
The difference of 0.33 reflects recognition of seniority, accumulated experience, and professional development.
2. How to Calculate Salary by Base Salary Coefficient in 2026
The traditional salary calculation formula in the public sector is:
Salary = Salary Coefficient × Statutory Base Salary
According to the latest applicable update, maintained from July 1, 2024, the current statutory base salary is:
VND 2,340,000 per month
Example: If a public employee has a salary coefficient of 3.0:
- Nominal salary = 3 × 2,340,000 = VND 7,020,000
- Actual take-home income will be calculated as: Nominal salary + Allowances, if any − Insurance contributions, 10.5%
Common allowances
- Position allowance: Applied to employees holding leadership or management positions.
- Professional seniority allowance: Commonly applied in education, the military, courts, and similar sectors.
- Regional allowance: Applied to employees working in remote areas, islands, disadvantaged regions, or areas with difficult working conditions.
3. How Are Salary Grade and Salary Coefficient Different?
In salary management, salary grade and salary coefficient are positively related but serve different functions and have different meanings.
- Salary grade: A salary grade reflects progression within the same salary rank or professional title. It is usually based on years of service or performance evaluation results. Each salary rank typically contains multiple grades, for example from grade 1 to grade 9 or grade 12.
- Salary coefficient: A salary coefficient is the specific numerical value assigned to each salary grade. It is the direct parameter used in the mathematical formula to calculate an employee’s base salary.
| Criteria | Salary Grade | Salary Coefficient |
| Nature | Progression steps within a salary rank or professional title | A specific number used to calculate salary |
| Role | Shows the career progression path, usually with 9–12 grades | Determines the monetary value of each grade |
| Timing | Changes periodically, such as every 2 years for intermediate or college level and every 3 years for university level | Changes when the employee is promoted to a higher grade or transferred to another rank |
4. Types of Salary Coefficient Tables in 2026
The public-sector salary scale system is clearly categorized to reflect the professional nature, responsibilities, and specific characteristics of each field.
4.1 Professional and Administrative Salary Table for Civil Servants
This applies to employees working in State administrative agencies from central to local levels, such as specialists, auditors, tax officers, and customs officers.
- Classification: This table is divided into ranks such as senior rank (A3), principal rank (A2), specialist rank (A1), and clerical or employee ranks (B, C).
- Coefficient characteristics: Starting salary coefficients and maximum coefficients are strictly regulated by rank. For example, A1 civil servants have a starting coefficient of 2.34 and a maximum coefficient of 4.98 at grade 9.
4.2 Professional Title Salary Table for Public Employees
This applies to employees working in public service units in education, healthcare, science, and culture, such as teachers, doctors, and university lecturers.
- Classification: Public employees are classified by professional title levels, such as Class I, II, III, and IV, corresponding to training qualifications and professional standards.
- Coefficient characteristics: The coefficients may vary by profession. For example, healthcare and education employees often have specific professional title codes, but still follow the general coefficient framework issued by the Government to ensure system-wide consistency.
4.3 Salary Table for the Armed Forces
This applies specifically to employees in the People’s Army and the People’s Public Security forces.
Classification: The salary system is based on military or police ranks, from non-commissioned officers to general-level officers, rather than purely administrative salary ranks.
Coefficient characteristics: These coefficients reflect the specific nature of national defense, public security, and social order responsibilities. This group is often entitled to sector-specific allowances that are higher than those in the general administrative and public service sectors.
5. Factors That Affect Coefficient-Based Salary
Coefficient-based income is not fixed. It is affected by four main groups of factors.
Salary policy
Government adjustments to the statutory base salary, often in response to macroeconomic conditions such as inflation or rising living costs, directly affect the entire coefficient-based salary system.
Professional qualifications and degrees
Improving qualifications, such as progressing from a bachelor’s degree to a master’s degree, may be a required condition for rank promotion exams. Once promoted to a higher rank, employees are assigned a higher salary coefficient, which improves income.
Performance evaluation results
Work performance is the basis for regular or early salary grade increases. Employees with outstanding achievements may be eligible for a shortened grade-promotion cycle, for example reducing the cycle from three years to two years.
Payroll deductions and statutory contributions
Social Insurance, Health Insurance, and Unemployment Insurance contributions are calculated based on the salary used as the contribution basis. These deductions directly affect the employee’s actual net income.
6. How Is Salary Coefficient Different From Negotiated Salary in Enterprises?
The choice between these two compensation mechanisms depends on the individual’s career direction and sector preference.
Coefficient-Based Salary in the Public Sector
- Advantages: Coefficient-based salary offers high stability, a clear salary progression roadmap, and stronger assurance of benefits and retirement schemes.
- Disadvantages: Starting income is often relatively low, and rapid financial growth can be limited.
Negotiated Salary in the Private Sector
- Advantages: Negotiated salary is more flexible and is usually based on capability, market value, and job performance indicators such as KPIs. Employees who perform well may receive significant salary increases within a short period.
- Disadvantages: The private sector involves higher competition, greater performance pressure, and a higher risk of job loss if the business faces operational or financial difficulties.
7. Conclusion
Understanding how to calculate salary by coefficient is essential for employees to protect their rights and define a clear career development roadmap. For employees in the public sector, closely monitoring Government adjustments to the statutory base salary helps them manage personal finances more proactively.
In this context, HRIS solutions such as SunFish HR help enterprises and organizations standardize payroll calculation, automatically update salary parameters, and maintain transparency across the entire compensation system. This not only reduces operational errors but also improves long-term human resource management efficiency.
