Do employer managers who do not receive salaries participate in compulsory social insurance in Vietnam? What are cases where an employee is exempt from paying PIT on insurance premiums paid by the employer in Vietnam?

Do employer managers who do not receive salaries participate in compulsory social insurance in Vietnam?

According to point n, clause 1, Article 2 of the Social Insurance Law 2024 (effective from July 1, 2025), the provisions regarding individuals required to participate in compulsory and voluntary social insurance are specified as follows:

Individuals subject to compulsory and voluntary social insurance participation

1. Vietnamese laborers subject to compulsory social insurance participation include:

...

i) employer managers, controllers, representatives of state capital, or representatives of employer capital as prescribed by law; members of the Board of Directors, General Directors, Directors, members of the Supervisory Board or controllers, and other elected management positions of cooperatives, unions of cooperatives as stipulated by the Cooperative Law who receive salaries;

k) Non-specialized individuals operating at the commune, village, or neighborhood levels;

l) Individuals stipulated at point a of this clause working part-time, with a monthly salary equal to or higher than the lowest salary used as a basis for compulsory social insurance contributions;

m) Business household owners of registered business households participating as per Vietnam's Government regulations;

n) employer managers, controllers, representatives of state capital, representatives of employer capital as prescribed by law; members of the Board of Directors, General Directors, Directors, members of the Supervisory Board or controllers, and other elected management positions of cooperatives, unions of cooperatives as stipulated by the Cooperative Law who do not receive salaries.

Thus, from July 1, 2025, employer managers who do not receive salaries are still required to pay compulsory social insurance.

Do employer managers who do not receive salaries participate in compulsory social insurance in Vietnam? (Image from the Internet)

Shall social insurance contributions be deducted when calculating personal income tax in Vietnam?

According to clause 2, Article 9 of Circular 111/2013/TT-BTC (amended by Article 15 of Circular 92/2015/TT-BTC), provisions on deductible amounts when calculating PIT are specified as follows:

Deductible amounts

Deductible amounts as guided in this Article are amounts subtracted from the taxable income of individuals before determining taxable income from salaries, wages, or business activities. Specifically as follows:

...

2. Deduction for insurance contributions, voluntary pension fund

a) Insurance contributions include: social insurance, health insurance, unemployment insurance, professional liability insurance for certain professions required to participate in compulsory insurance.

b) Contributions to the voluntary pension fund, purchase of voluntary pension insurance

Contributions to the voluntary pension fund or purchase of voluntary pension insurance can be deducted from taxable income according to the actual amount occurred but not exceeding one (01) million VND/month for employees participating in voluntary pension products as guided by the Ministry of Finance, including amounts paid by employers for employees and amounts employees self-contribute (if any), even if participating in multiple funds. The basis for determining deductible income is a copy of the payment voucher (or fee) issued by the voluntary pension fund, insurer.

c) Foreigners residing in Vietnam and Vietnamese individuals residing but working abroad with income from business, salaries, wages abroad who have participated in compulsory insurance contributions according to the laws of the country where the individual resides or works, similarly prescribed by Vietnam’s laws, such as social insurance, health insurance, unemployment insurance, compulsory professional liability insurance, and other compulsory insurance types (if any) shall have such insurance fees deducted from taxable income from business or salaries, wages when calculating personal income tax.

Foreign individuals and Vietnamese individuals who have made the above-mentioned insurance contributions abroad shall have temporary deductions immediately into income for tax deduction in the year (if there is a certificate) and calculated according to the official amount if the individual conducts tax finalization as prescribed. In cases where there is no certificate for temporary deduction in the year, it will be deducted once when finalizing taxes.

...

Thus, social insurance contributions (or similar types of insurance for foreigners who are residents in Vietnam, Vietnamese residents working abroad with income from business, salaries, wages abroad) will be deducted when calculating PIT.

What are cases where an employee is exempt from paying PIT on insurance premiums paid by the employer in Vietnam?

Based on sub-item đ.2, point đ, clause 2, Article 2 of Circular 111/2013/TT-BTC (amended by clause 3, Article 11 of Circular 92/2015/TT-BTC), the following is specified:

Taxable income

As stipulated in Article 3 of the Personal Income Tax Law and Article 3 of Decree No. 65/2013/ND-CP, taxable personal income includes:

...

2. Income from salaries, wages

Income from salaries, wages is the income received by workers from the employer, including:

...

đ) Monetary or non-monetary benefits beyond salaries, wages paid by the employer which the taxpayer is entitled to under any form:

...

đ.2) Monetary amounts paid by the employer for life insurance, other non-compulsory insurances with accumulated insurance premiums; purchasing voluntary pension insurance or contributing to the voluntary pension fund for employees.

If the employer purchases non-compulsory insurance products for the employees without accumulated insurance premiums (including purchasing insurance from insurers not established and operating under Vietnamese law permitted to sell insurance in Vietnam), the insurance premium for purchasing these insurance products is not included in the taxable personal income of the employee. Non-compulsory insurances without accumulated insurance premiums include insurance products such as health insurance, term insurance (excluding term insurance products with premium returns), ... where the participants do not receive accumulated insurance premiums from participating in insurance, except for agreed insurance or compensation payments under the insurance contract paid by the insurer.

...

Thus, in cases where the employer purchases non-compulsory insurance products for the employees without accumulated insurance premiums, the insurance premium for these products is not included in the taxable personal income of the employee.