Regarding Social Insurance:

• Employees who are Vietnamese citizens are subject to compulsory social insurance participation, including:
  • Employees working under labor contracts with a duration of at least one month;
  • Business managers, cooperative managers who receive salaries.

Thus, Vietnamese employees in these two cases must contribute a portion of their monthly salary to the SI fund, with a contribution rate of 8% of the registered salary into the pension and survivor benefits fund.

• Employees who are foreign citizens are also subject to compulsory social insurance if they:
  • Possess a work permit, a practice certificate, or a practicing license issued by competent Vietnamese authorities and have an indefinite-term labor contract or a definite-term labor contract lasting at least one year with an employer in Vietnam.

Therefore, when eligible, foreign employees must contribute 8% of their registered salary to the SI fund, specifically into the pension and survivor benefits fund.

Special cases businesses need to note:

• Employees who do not work and do not receive a salary for 14 working days or more in a month are not required to contribute to social insurance for that month. This period is not counted toward the social insurance benefit, except for maternity leave.
• Employees with multiple labor contracts with different employers only need to contribute to social insurance based on their first labor contract.

For employees subject to compulsory SI, employers contribute to the SI funds based on the employee’s registered salary as follows:

• 3% to the sickness and maternity fund;
• 0.5% to the occupational accident and disease fund;
• 14% to the pension and survivor benefits fund.

Regarding Health Insurance:

Health insurance applies to both Vietnamese and foreign employees under definite-term labor contracts of at least three months or indefinite-term contracts.

• Employers contribute 3% to the HI fund.
• Vietnamese and foreign employees contribute 1.5% to the HI fund.

Regarding Unemployment Insurance:

Unemployment insurance applies to Vietnamese employees under definite-term labor contracts of at least three months or indefinite-term contracts.

• Employers contribute 1% to the UI fund.
• Vietnamese employees contribute 1% to the UI fund.

Foreign employees are not required to participate in UI in Vietnam.

Below is a detailed summary of the SI contribution rates for Vietnamese and foreign employees:

Vietnamese Employees:

Foreign Employees:

Thus, employers must clearly define the type of labor contracts signed with employees, including both Vietnamese and foreign workers, to ensure compliance with the regulations on SI contributions.

For further detailed consultation, please contact TPM team for timely support.

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

References:

• Social Insurance Law No. 58/2014/QH13 dated November 20, 2014
• Decree No. 143/2018/ND-CP dated October 15, 2018
• Decree No. 58/2020/ND-CP dated May 27, 2020