Vietnam: What is the minimum salary as the basis for payment of compulsory social insurance by employees during 2024? In 2024, what is the compulsory social insurance premium payment rate?

Main Content

• What is the minimum salary as the basis for payment of compulsory social insurance by employees in Vietnam during 2024?
• In 2024, what is the compulsory social insurance premium payment rate in Vietnam?
• What are the incomes excluded in the monthly salary as the basis for payment of compulsory social insurance in Vietnam?

What is the minimum salary as the basis for payment of compulsory social insurance by employees in Vietnam during 2024?

Under the provisions of Point 2.6, Clause 2, Article 6 of the Process enclosed with Decision 595/QD-BHXH in 2017 as follows:

Monthly salaries as the basis for payment of compulsory social insurance according to Article 89 of the Law on Social Insurance and its instructional documents

...

2. Salaries paid by non-state employers

...

2.6. The monthly salary as the basis for payment of compulsory social insurance specified in this Clause must not fall below the region-based minimum wage of the person holding the simplest position under normal working conditions.

Thus, according to the above-mentioned regulations, the monthly salary as the basis for payment of compulsory social insurance by employees in Vietnam must not fall below the region-based minimum wage of the person holding the simplest position under normal working conditions.

Regarding the region-based minimum wage, on December 20, 2023, the National Wage Council agreed and finalized the proposal to increase the region-based minimum wage from July 1, 2024 at 6% to submit to the Government of Vietnam for consideration of the decision.

Therefore, in 2024, it is expected that the region-based minimum wage will be divided into 02 levels as follows:

Thus, the minimum salary as the basis for payment of compulsory social insurance by employees in Vietnam during 2024 is determined based on the above-mentioned region-based minimum wage.

In 2024, what is the compulsory social insurance premium payment rate in Vietnam?

Under the provisions of Clause 1, Article 5 of the promulgation process attached to Decision 595/QD-BHXH 2017, Clause 1, Article 57 of the Employment Law 2013, Clause 1, Article 7 of Decree 146/2018/ND-CP, the compulsory social insurance premium payment rate in Vietnam for employees is determined as follows:

- Social insurance: 8%;

- Unemployment insurance: 1%;

- Health insurance: 1.5%.

Thus, the compulsory social insurance premium payment level in Vietnam is 10.5%.

Currently, the formula for calculating employees' social insurance contributions is determined as follows:

Insurance premium = 10.5% x monthly salary as the basis for payment of compulsory social insurance

In particular, the monthly salary as the basis for payment of compulsory social insurance is salaries, salary-based allowances and other additional amounts by the labor law stated in the employment contract.

=> The formula for calculating the employee's insurance premium in 2024 is as follows:

Insurance premium = 10.5% x monthly salary as the basis for payment of compulsory social insurance

Note: The above provision applies to Vietnamese employees

What are the incomes excluded in the monthly salary as the basis for payment of compulsory social insurance in Vietnam?

Under the provisions of Clause 26 Article 1 of Circular 06/2021/TT-BLDTBXH mentioning incomes excluding social insurance contributions as follows:

Amendment to Circular No. 59/2015/TT-BLDTBXH dated December 29, 2015 of Minister of Labor - War Invalids and Social Affairs elaborating to Law On Social Insurance on compulsory social insurance

...

26. Amend Clause 2 and Clause 3 Article 30 as follows:

“2. From January 1, 2018 to December 31, 2020, monthly salary as the basis for payment of compulsory social insurance shall be salaries and salary-based allowances according to Clause 1 of this Article and other amounts according to Point a Clause 3 Article 4 of Circular No. 47/2015/TT-BLDTBXH .

From January 1, 2021, monthly salary as the basis for payment of compulsory social insurance shall be salaries, salary-based allowances and other payments under Point a, Sub-point b1 Point b and Sub-point c1 Point c Clause 5 Article 3 of Circular No. 10/2020/TT-BLDTBXH dated November 12, 2020 of Ministry of Labor – War Invalids and Social Affairs.

3. Monthly salary as the basis for payment of compulsory social insurance does not include other benefits and policies such as bonuses according to Article 104 of the Labor Code, initiative bonuses; mid-shift meal; travel, communication, accommodation, childcare allowances; allowances when relatives of workers decease, relatives of workers get married, birthday of workers, allowances for workers facing difficulty as a result of occupational diseases and accidents, and other allowances and benefits specified separately under employment contracts according to Sub-point c2 Point c Clause 5 Article 3 of Circular No. 10/2020/TT-BLDTBXH.

Thus, according to the above regulations, currently, incomes excluded in the monthly salary as the basis for payment of compulsory social insurance in Vietnam include: