From July 1, 2025: Household Business Owners Must Participate In Compulsory Social Insurance Under The 2024 Social Insurance Law

According to the 2024 Social Insurance Law, which takes effect on July 1, 2025, household business owners will officially be subject to compulsory social insurance (SI). This marks a significant step forward in expanding the social security system and securing long-term benefits for informal labor groups.

Who Is Subject To Compulsory Social Insurance?

Under Point m, Clause 1, Article 2 of the 2024 Social Insurance Law, effective from July 1, 2025, household business owners with registered business licenses, as regulated by the Government, are required to participate in compulsory SI. Compared to the 2014 Social Insurance Law, this is a new regulation.

This means that starting July 1, 2025, household business owners are officially obligated to contribute to compulsory social insurance, in accordance with the 2024 Social Insurance Law. This change will directly affect millions of household businesses across the country.

Social Insurance Contribution Rate For Household Business Owners

According to Clause 4, Article 33 of the 2024 Social Insurance Law, the contribution rate, payment methods, and deadlines for household business owners are regulated as follows:

• 3% of the declared salary will be contributed to the sickness and maternity fund.
• 22% will be contributed to the retirement and survivorship fund.

So, the total contribution rate is 25% of the chosen salary base.

Payment methods:

Contributions can be paid directly to the local social insurance authority on a monthly, quarterly, or biannual basis.

Deadline for payment: No later than the last day of the following month after each payment cycle.

Declared Salary Base For Si Contribution

As regulated under Point d, Clause 1, Article 31 of the 2024 Law, household business owners may choose a salary base to calculate their SI contribution, subject to the following limits:

• Minimum: Equal to the statutory base salary, currently VND 2,340,000/month
• Maximum: Up to 20 times the base salary, equivalent to VND 46,800,000/month

Note: The chosen salary base affects future retirement benefits and other SI entitlements. Business owners should select a contribution level that aligns with their financial capacity.

Re-adjustment of declared salary: After at least 12 months of contributions based on a selected salary, business owners may change the declared salary base for future contributions.

Example:

If a household business owner chooses a monthly salary base of VND 2,340,000, then:

Monthly SI contribution = 2,340,000 x 25% = VND 585,000 VND/month

This full amount is self-funded by the business owner, with no employer contribution, unlike regular employment.

Benefits Of Participating In Compulsory Si For Household Business Owners

Participation in social insurance helps protect household business owners from risks and ensures stable income during retirement or unforeseen circumstances:

• Retirement: Entitled to a monthly pension and lifetime free health insurance
• Long-term financial security: No longer dependent solely on business operations in old age or poor health

Penalties For Non-Compliance

Failure to comply with compulsory SI participation may result in administrative fines and potentially loss of long-term benefits. Therefore, staying informed and fulfilling obligations is both a responsibility and a right of every business owner.

Conclusion

The implementation of compulsory social insurance (SI) for household business owners from July 1, 2025, is a progressive policy that helps expand the social protection network and ensure greater financial stability for informal workers.

Household business owners are strongly encouraged to stay informed, choose a contribution level that suits their financial situation, and participate on time to safeguard their personal rights and long-term benefits for themselves and their families.

We have a dedicated team specializing in social insurance consultation and registration for both companies and household businesses. Please feel free to contact our SI expert for personalized support.

Contact Information: Ms. Đo Thi Thu Quynh Head of Human Resources & Payroll Services
quynh.do@tpm.com.vn