Mandatory Social Insurance For Business Households: Required From July 1, 2024, Up To Nearly 12 Million VND/Month

Mandatory Social Insurance Contribution Levels For Business Household Owners: From 585,000 Vnd To Nearly 12 Million Vnd/Month

Under the 2024 Social Insurance Law, effective July 1, 2024, individual business household owners will be required to contribute to mandatory Social Insurance. The specific contribution levels are clearly stipulated:

• Contribution Rate: 3% to the sickness and maternity fund, and 22% to the retirement and survivorship fund. In total, business household owners will contribute 25% of their salary used as the basis for SI contributions.
• Contribution Basis: Business household owners can choose the salary used as the basis for mandatory SI contributions, but it must ensure:
  • Minimum: Equal to the reference level at the time of contribution.
  • Maximum: Equal to 20 times the reference level at the time of contribution.

Currently, the base salary is 2.34 million VND/month. Therefore, the reference level is also calculated based on the base salary until further regulations.

With the above regulations, the monthly mandatory Social Insurance contribution for business household owners will be:

• Minimum contribution: 25%×2,340,000 VND =585,000 VND/month.
• Maximum contribution: 25%×(20×2,340,000 VND) =11,700,000 VND/month.

Business household owners can choose to contribute monthly, quarterly (every 3 months), or semi-annually (every 6 months), depending on their needs and financial capacity.

Procedures For Registering Mandatory Social Insurance For Business Households

The 2024 Social Insurance Law offers two flexible options for business household owners when registering for mandatory Social Insurance:

1. Registration through the employer: If the business household has employees and has already registered them for Social Insurance, the business household owner can register for mandatory Social Insurance along with the list of employees. The dossier includes the SI registration declaration form and the list of employees participating in SI.
2. Business household owner self-submission: In case of self-registration, the business household owner only needs to prepare the SI registration declaration form and submit it to the Social Insurance agency within 30 days from the date they become subject to mandatory SI.

Roadmap For Mandatory Social Insurance Participation For Individual Business Households

The draft Decree guiding the implementation of the Social Insurance Law has clearly specified the roadmap for mandatory Social Insurance participation for business household owners, helping them prepare proactively:

• From July 1, 2024: Applicable to business household owners who have a business registration and pay taxes using the declaration method. These are large-scale households that actively declare their revenue and expenses monthly or quarterly.
• From July 1, 2027: Applicable to business household owners who have a business registration and pay taxes using the lump-sum method. These households are typically small or medium-sized, paying taxes at a fixed rate determined annually by the tax authorities.
• From July 1, 2029: Applicable to business household owners with business registration not belonging to the above two groups.

According to tax authority statistics, in 2024, there are about 80,000 business households paying taxes using the declaration method and about 2.02 million business households paying taxes using the lump-sum method. This indicates that a very large number of business household owners will need to participate in mandatory Social Insurance, and this will be implemented in specific phases.