What is the schedule for the payment of pensions and social insurance benefits in Vietnam for December 2024? How to determine the pension payable in Vietnam for December 2024?

Schedule for the payment of pensions and social insurance benefits in Vietnam for December 2024

Based on Clause 4, Article 7 of the Procedure for resolving entitlements to social insurance policies and payment of social insurance and unemployment insurance policies issued with Decision 166/QD-BHXH in 2019 governing resolution and payment:

Resolution and Payment

...

4. Monthly payment of social insurance policies

...

4.1.4. Organize monthly payment of pensions and social insurance benefits to beneficiaries through the postal system according to the signed contract.

a) Payment at payment points: From the 2nd to the 10th of the month, organize payment for at least 6 hours/day at all payment points; the payment concludes before the 10th for points that have completed payment based on the list provided by the Social Insurance Agency.

b) Payment at district post office transaction points: From the 11th of the month, continue to make payments at transaction points of the post office until the end of the 25th of the month.

4.1.5. Prepare List C75-HD, record in the detailed monitoring book for each individual reclaimed by the provincial Social Insurance and summarize the list of reclamations for the entire province in accordance with regulations.

...

According to the above regulations, the payment schedule of pensions and social insurance benefits for December 2024 is as follows:

- Payment at payment points: From December 2, 2024, to December 10, 2024, at all payment points.

- Payment at district post office transaction points: From December 11, 2024, continue to pay at postal transaction points until the end of December 25, 2024.

However, from December 2024, in certain provinces and cities, there will be adjustments to the pension receiving schedule. Specifically:

(1) Ho Chi Minh City

According to Official Dispatch 8126/BHXH-KHTC in 2024, the Ho Chi Minh City Social Insurance announces the payment schedule for pensions and social insurance benefits from December 2024 onwards as follows:

- Payment via ATM account: The city Social Insurance directly transfers money into the beneficiary's account from the 1st of each month.

- Cash payment form: Ho Chi Minh City Post Office organizes payment at payment points from the 4th to the 10th of each month; continuous payment at Central/Post Office of District from the 11th until the end of the 25th.

Note: If the payment date falls on a Saturday, Sunday, or public holiday, the payment day will be the next working day.

(2) Hanoi

Implementing the directives of Vietnam Social Security, Hanoi Social Insurance informs that the social insurance agencies of localities directly transfer money to pay pensions, monthly social insurance benefits through personal accounts for beneficiaries starting from November 2024, commencing from the 1st, 2nd, 3rd of each month.

Therefore, starting from December 2024, Hanoi Social Insurance will pay pensions, social insurance benefits via personal accounts on the 2nd day of each month.

In cases where the 2nd day falls on a holiday, the workers will receive their pension for December 2024 after a delay (the payment schedule will commence from the first working day following the holiday).

Schedule for the payment of pensions and social insurance benefits in Vietnam for December 2024 (Image from the Internet)

How to determine the pension payable in Vietnam for December 2024?

Pursuant to Article 56 of The Social Insurance Law 2014 (document effective until July 1, 2025) and Article 7 of Decree 115/2015/ND-CP, the monthly pension entitlement is outlined as follows:

Whereby:

- Employees retiring from January 1, 2016, to before January 1, 2018, have a monthly pension rate calculated as 45% corresponding to 15 years of social insurance contribution, then it is added 2% for each additional year of contributions for men and 3% for women; with a maximum limit of 75%.

- Female employees retiring from January 1, 2018, onwards, have a monthly pension rate of 45% corresponding to 15 years of social insurance contribution, then 2% is added for each additional year of contributions; with a maximum limit of 75%.

- Male employees retiring from January 1, 2018, onwards, have a monthly pension rate of 45% corresponding to the number of years of social insurance contribution as follows: 16 years in 2018, 17 years in 2019, 18 years in 2020, 19 years in 2021, and from 2022 onwards, 20 years, then it is incremented by 2% for each additional year of contribution; with a maximum limit of 75%.

Note:

- The pension entitlement for employees receiving pension due to a reduction in working capacity in 2024 will be calculated as above, but each year of early retirement reduces the entitlement rate by 2%. If the retirement age includes a period of up to 6 months over, a reduction of 1% is applied, over 6 months, no reduction is applied for early retirement.

- The pension entitlement for female social officials who meet retirement conditions is calculated as follows: 15 years of social insurance contribution are equivalent to 45% of the average monthly salary during contributions. From enough 16 years to under 20 years of social insurance contributions, each year of contribution is calculated with an additional 2%.

- Excluding female social officials or non-specialized local officials, the lowest monthly pension of employees who participate in compulsory social insurance entitled to pension must fit the statutory pay rate.

Therefore, depending on the pension rate and the average salary for social insurance contributions, the pension payable in the payment period of December 2024 will vary.

Is social insurance contribution deductible 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) regulating deductions when calculating PIT. Specifically:

Deductions

Deductions directed in this article are subtracted from taxable income of individuals before determining taxable income from wages, salaries, business income. Specifically as follows:

...

2. Deductions for insurance payments, voluntary retirement fund

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

b) Contributions to voluntary retirement fund, purchase of voluntary retirement insurance

Contributions to the voluntary retirement fund, purchase of voluntary retirement insurance are deducted from taxable income according to actual occurrence but not more than one (01) million VND/month for employees participating in voluntary retirement products following guidance from the Ministry of Finance, including amounts paid by the employer and the employee's own contributions (if any), even if participating in several funds. The basis for determining the deductible income is a photocopy of the payment receipt (or payment fee) issued by the voluntary retirement fund, insurer.

c) Foreign individuals residing in Vietnam, Vietnamese residing but working abroad with income from business, wages, salaries abroad participating in compulsory insurance payments according to the law of the country of residency or working similar to Vietnam's law as social insurance, health insurance, unemployment insurance, compulsory professional liability insurance and other compulsory insurances (if any) are deducted when calculating taxable income from business, wages, salaries when calculating PIT.

Foreign individuals and Vietnamese who participate in the aforementioned insurance programs abroad are allowed a provisional deduction from income for withholding tax during the year (if proof is available) and calculated based on the final amount if the individual makes tax finalization according to regulations. In absence of evidence for provisional deductions during the year, it will be deducted once during tax finalization.

...

Thus, social insurance contributions (or similar insurance contributions for foreign individuals residing in Vietnam, or Vietnamese residents working abroad with income from business, wages, salaries) will be deductible when calculating PIT.