What are social insurance payment ratios of employers in Vietnam in 2025? Is social insurance payment deductible when calculating personal income tax?

What are social insurance payment ratios of employers in Vietnam in 2025?

Based on Article 32 of the Law on Social Insurance 2024, the specified rates for social insurance contributions are as follows:

Social insurance payment ratios

1. The mandatory Social insurance payment ratios include:

a) 3% of the salary used as the basis for social insurance contributions to the sickness and maternity fund;

b) 22% of the salary used as the basis for social insurance contributions to the retirement and survival funds.

2. The voluntary social insurance contribution rate is 22% of the income used as the basis for social insurance contributions to the retirement and survival funds.

Based on Article 34 of the Law on Social Insurance 2024, the specified contribution rates for mandatory social insurance by the enterprise (employer) are as follows:

Contribution Rate, Method, and Deadline for Mandatory Social Insurance of Employers

1. The employer contributes monthly to mandatory social insurance based on the salary used as the basis for mandatory social insurance contributions for the individuals specified in points a, b, c, d, i, k, and l of Clause 1 and Clause 2, Article 2 of this Law as follows:

a) 3% to the sickness and maternity fund;

b) 14% to the retirement and survival funds.

2. The employer contributes monthly 22% of the salary used as the basis for mandatory social insurance contributions to the retirement and survival funds for the individuals specified in points đ and e of Clause 1, Article 2 of this Law.

3. Employers are not required to contribute to social insurance for individuals under the regulations in Clause 5, Article 33 of this Law, except where the employer agrees with the employee to contribute to social insurance for that month based on the nearest month's social insurance basis.

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Thus, according to the aforementioned regulations, the social insurance contribution rate for enterprises (employers) is 21.5% to the insurance funds:

- For pension: 14%

- For sickness and maternity policies: 3%

- For occupational accident and disease policies: 0.5%

- For unemployment insurance: 1%

- For health insurance: 3%

Note: The Law on Social Insurance 2024 takes effect from January 1, 2025.

What are social insurance payment ratios of employers in Vietnam in 2025? Is social insurance payment deductible when calculating personal income tax? (Image from the Internet)

Is social insurance payment deductible when calculating personal income tax in Vietnam?

According to Clause 2, Article 9 of Circular 111/2013/TT-BTC, as amended by Article 15 of Circular 92/2015/TT-BTC, specific deductions when calculating personal income tax are as follows:

Deductions

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2. Deductions for insurance contributions, Voluntary pension funds

a) Insurance contributions include: social insurance, health insurance, unemployment insurance, occupational liability insurance for certain professions that must participate in mandatory insurance.

b) Contributions to the voluntary pension fund, purchasing voluntary pension insurance

Contributions to the voluntary pension fund, purchasing voluntary pension insurance can be deducted from taxable income according to the actual amount incurred but not exceeding 1 million VND per month for employees participating in voluntary pension products as guided by the Ministry of Finance. This includes contributions made by both the employer and employee, even in cases of participation in multiple funds. The basis for determining deductible income is a copy of the payment receipt (or fee payment) issued by the voluntary pension fund or insurer.

c) Foreign individuals residing in Vietnam and Vietnamese individuals residing but working abroad with income from business, salaries, or wages abroad who have participated in mandatory insurance schemes according to the regulations of the country where they reside or work, similarly to Vietnamese law, such as social insurance, health insurance, unemployment insurance, mandatory occupational liability insurance, and other mandatory insurances (if any), can deduct these insurance fees from taxable income from business or salaries and wages when calculating personal income tax.

Foreign individuals and Vietnamese individuals who have paid the above-mentioned insurances abroad will temporarily be deducted immediately from income to deduct tax within the year (if there is documentation) and calculated according to the official amount when finalizing the tax according to regulations. If there is no documentation for temporary deduction within the year, it will be deducted once when finalizing the tax.

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Thus, under the aforementioned regulations, social insurance contributions are deductible when calculating personal income tax.

What are regulations on personal income tax calculation period in Vietnam?

According to Article 7 of the Law on Personal Income Tax 2007, as amended by Clause 3, Article 1 of the Amended Law on Personal Income Tax 2012, the tax calculation period is regulated as follows:

- The tax calculation period for resident individuals is regulated as follows:

+ Annual tax period applies to income from business; income from salaries and wages;

+ Tax period on each income occurrence applies to income from capital investment; income from capital transfer, excluding securities transfer income; income from real estate transfer; income from winnings; income from royalties; income from franchising; income from inheritances; income from gifts;

+ Tax period on each transfer or annually for income from securities transfer.

- The tax calculation period for non-resident individuals is calculated based on each income occurrence applicable to all taxable income.