Short answer: the law has no separate overtime formula for piece-rate wages. Decree 145/2020/ND-CP at Article 55 only provides calculation methods for time-based wages (clause 1) and product-based wages (clause 2). For piece-rate wages, the safe approach is to apply the general principle in Article 98 of the 2019 Labor Code (minimum 150%/200%/300%) combined with specific agreement in the labor contract. Note the correct citation: wage payment forms are governed by Article 96 of the Labor Code (not Article 95).
1. Quick comparison table
| Criterion | Time-based wages | Piece-rate wages |
|---|---|---|
| Basis | Art. 96 Labor Code + Art. 54 Decree 145/2020 | Art. 96 Labor Code + Art. 54 Decree 145/2020 |
| Unit of measurement | HOURS worked (hour/day/week/month) | WORK VOLUME + quality + completion deadline |
| Overtime formula | Art. 55.1 Decree 145: actual hourly wage x 150%/200%/300% x overtime hours | NO separate formula in Decree 145 |
| Minimum overtime rate | 150% / 200% / 300% (Art. 98.1 Labor Code — general application) | 150% / 200% / 300% (Art. 98.1 Labor Code — general application) |
| Payment cycle | By hour, day, week or month | As agreed; multi-month jobs require monthly advances |
2. Analysis of each difference
Wage payment forms: Article 96, not Article 95
Article 96 of the 2019 Labor Code governs wage payment forms, detailed in Article 54 of Decree 145/2020/ND-CP with three forms: time-based, product-based and piece-rate. A common citation error is writing “Article 95” for wage payment forms — it must be corrected to Article 96 in all documents, internal regulations and contracts.
Time-based wages: a clear overtime formula
For time-based wages, Article 55.1 of Decree 145/2020 provides the formula: actual hourly wage of the current job x 150% (ordinary days) / 200% (weekly rest days) / 300% (public holidays, Tet, paid leave days) x overtime hours. Because the unit is working hours, determining “how many overtime hours” is relatively straightforward.
Piece-rate wages: the formula gap and the safe handling
For piece-rate wages — paid by volume, quality of work and completion deadline — Decree 145/2020 provides no separate overtime formula (Article 55 covers only time-based wages in clause 1 and product-based wages in clause 2). This is a genuine legal gap. The safe, lawful handling:
- Apply the general principle in Article 98.1 of the Labor Code: overtime work is paid at at least 150% on ordinary days, 200% on weekly rest days, 300% on public holidays, Tet and paid leave days — this rate applies generally to all wage forms, including piece-rate wages.
- Agree specifically in the labor contract how piece-rate volume converts into overtime unit rates (e.g. the unit price for extra volume beyond the piece-rate quota performed during overtime), so disputes have a clear basis.
- Never invent a formula and present it as “prescribed by law”, and never write “the law provides that piece-rate wages are not entitled to overtime” — both are wrong.
Different payment cycles
Time-based wages are paid by hour/day/week/month cycles. Piece-rate wages are paid as agreed upon completion of the volume; for piece-rate jobs lasting several months, the employer must advance wages monthly to the employee (Article 97 of the Labor Code). Maximum overtime limits (Article 107) and working/rest time rules (Article 105) apply generally to both forms.
3. Practical notes
- The labor contract clause is the “lifebuoy”: because the law has no separate formula for piece-rate wages, the labor contract should clearly state the piece-rate unit price, how extra volume is measured, and how overtime is calculated — the more detailed, the fewer disputes.
- Review internal regulations and collective labor agreements: fix every “Article 95” citation on wage payment forms to Article 96 of the Labor Code.
- Whatever the wage form, overtime rates must not be lower than 150%/200%/300% under Article 98.1 — a mandatory general floor.
- Distinguish piece-rate wages from product-based wages: Decree 145 has an overtime formula for product-based wages (Art. 55.2) but none for piece-rate wages — do not apply them interchangeably.
4. Conclusion
Time-based wages have a clear overtime formula in Article 55.1 of Decree 145/2020; piece-rate wages do not — a gap companies must fill with detailed agreement in the labor contract built on the general 150%/200%/300% floor of Article 98 of the Labor Code. Citing the correct basis (Article 96, not 95) and not inventing formulas are the minimum requirements to avoid legal risk.
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Information in this article is for general reference under the laws in force at the time of writing (14/10/2026) and is not legal advice for any specific case.
Transparency note: This article was drafted by FLAT Law Firm’s AI content production system and has passed the AI content review council (AI Legal Council QA). It has not been reviewed by a human lawyer.