What are the fines for businesses on late payment of insurance premiums?

When is the deadline to pay Social Insurance in Vietnam?

Lawyer Le Ngoc Khanh, TGS Law Firm, Lawyers Association in Hanoi, Vietnam stated that according to Article 85 of the 2014 Law on Social Insurance, every month, employees and employers must deduct part of their salary and salary fund to pay compulsory insurance. The entire premium will be paid to the district social insurance agency where the enterprise is located.

Depending on the method of choosing to pay social insurance, the time limit for paying the insurance premium will be determined according to Article 7, Decision 595/QD-BHXH, amended by Clause 13, Article 1, Decision 505/QD-BHXH as follows:

In case of monthly payment:

Deadline for payment of social insurance premiums: No later than the last day of the month.

At this time, the enterprise must transfer the social insurance contributions of both the enterprise and the employees at the same time to the collection account of the social insurance agency opened at the bank or the State Treasury.

In case of payment every 3 months or every 6 months:

Deadline for payment of social insurance premiums: No later than the last day of the payment method.

Enterprises must transfer all the payment to the social insurance fund.

How long can the business owe the insurance premium in Vietnam?

According to Clause 2, Article 17 of the Law on Social Insurance 2014, late payment of social insurance and unemployment insurance premiums is strictly prohibited by law.

Regarding the handling of violations of late payment of insurance, Clause 3, Article 122, of the Law on Social Insurance 2014 clearly stipulates: "Employers that violate Clause 1, 2 or 3, Article 17 of this Law for 30 days or more shall not only fully pay the amount not yet paid or paid late and be handled in accordance with law but also pay an interest equaling 2 times the average interest rate of investment from the social insurance fund in the preceding year, calculated based on the late paid amount and late payment period. If they fail to do so, at the request of competent persons, related banks, credit institutions or state treasuries shall deduct money from the employers’ deposit accounts in order to pay the amount not yet paid or paid late and the interest thereon to the accounts of social insurance agencies".

According to the regulations in Vietnam, enterprises can delay payment of social insurance but only for 29 days from the deadlines. In case of late payment of social insurance of 30 days or more, enterprises will not only be handled for violations but also be charged extra interest.

The interest rate is equal to 02 times the average investment interest rate of the social insurance fund of the preceding year, based on the amount and time of late payment.

Pursuant to Notice 89/TB-BHXH dated January 13, 2022 of Vietnam Social Insurance, the interest rate for late payment of insurance premium applied for 2022 will be calculated as follows:

What are the fines for businesses on late payment of insurance premiums?

As pointed out in Section 2, employers delaying the payment of social insurance premiums for 30 days or more will be handled for violations of the law. Pursuant to Point a, Clause 5, Article 39, Decree 12/2022/ND-CP, the employer will be fined as follows:

Combined with the regulations in Clause 1, Article 6, Decree 12/2022/ND-CP, the employer being an individual who owes the insurance money beyond the prescribed time limit will be fined 12% - 15% of the total amount of compusory insurance premiums but not exceeding 75 million.

Meanwhile, if the employer is organization, the fine will be doubled from 24% - 30% of the total amount of compusory insurance premiums, but not exceeding 150 million VND.

Source: Lsvn.vn

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