Employees who are foreign nationals working in Vietnam shall be required to participate in the compulsory SI program if they obtain work permits, practicing certificates, practicing licenses issued in Vietnam, indefinite-term employment contracts or employment contracts valid for at least one year with employers. They are eligible for one-time social insurance coverage if any of the following conditions apply:

• He/she reaches the prescribed age as prescribed but has not yet reached the period of 20 years of SI contribution;
• He/she is currently suffering from one of the deadly diseases, such as cancer, polio, cirrhosis with ascites, lapra, serious tuberculosis, HIV infection moved to the phase of AIDS disease and others regulated by the Ministry of Health;
• He/she has fully satisfied retirement pension entitlement requirements as prescribed, but has discontinued residing in Vietnam;
• His/her employment contract is terminated, or his/her labor permit, practicing certificate or practicing license expires without being permitted for renewal.

Therefore, when foreign labor terminates their labor contracts or work permits, as well as when their practicing certificates and practicing licenses expire without being renewed, and have a need to enjoy insurance One-time Social Insurance, Employees need to contact the local Social Insurance Agency where they temporarily reside to submit their application.

Pursuant to Clause 2 Article 1 of Resolution No. 93/2015/QH13 stipulates:

The one-time social insurance benefit for Foreigners is calculated according to the following formula:

Claimed amount= (2 x the average monthly salary paying social insurance x Number of years paying social insurance after 2014)

The average monthly salary paid for social insurance = (salary paid for social insurance x inflation coefficient x number of months)/total number of months

Pursuant to Clause 4, Article 19 of Circular 59/2015/TT-BLDTBXH regulating rounding calculation when calculating lump-sum social insurance benefits in case the social insurance payment period has odd months:

• If the contribution period is from 1 to 6 months, it is counted as 0.5 year
• If the contribution period is from 7 to 11 months, it is counted as 1 year

FOR EXAMPLE:

Employee A has participated in the mandatory social insurance program from January 2022 to March 2023 with a monthly insurance contribution of 15,000,000 VND.

Total duration of social insurance participation of A is 1 year and 3 months, and Mr A has a plan to enjoy social insurance benefits once they leave the job.

So, what is the total amount of social insurance benefits that A will receive?

TPM Consultancy:

A’s duration of social insurance participation from January 1, 2022, from 2022 to March 2023 is 1 year and 3 months, which equals 15 months rounded up to 1.5 years.

A’s average monthly salary = [(15,000,000 * 12 * 1) + (15,000,000 * 1 * 3)] / 15 = 15,000,000 VND.

Thus, the one-time social insurance benefits that A will receive = 2 * 15,000,000 * 1.5 = 45,000,000 VND.

Above are some basic regulations of one – time social insurance for foreign employees.

If you need any assistance with these or any other matters relevant for foreign employees in Vietnam, our experts are ready to work with your company to ensure you understand how the above will apply to your specific situation.

Contact our teams for expert support and further information on managing labour and HR compliance in Vietnam.

Do Thi Thu Quynh– Head of Payroll and HR services – quynh.do@tpm.com.vn

Legal grounds:

Social Insurance Law No. 58/2014/QH13 dated November 20, 2014

Decree No. 143/2018/NĐ-CP dated October 15, 2018

Resolution No. 93/2015/QH13 dated June 22, 2015

Circular No. 59/2015/TT-BLĐTBXH dated December 29, 2015

Circular No. 20/2023/TT-BLĐTBXH dated December 29, 2023