Detailed Calculation of Pension

Legal Basis: Article 62 of the Social Insurance Law 2014

The pension calculation method is specifically stipulated as follows:

Pension = Average monthly salary for social insurance contribution x Pension rate %.

In which, average monthly salary for social insurance contribution is calculated as follows:

- For individuals who have paid social insurance for their entire period based on the state's salary policies:

Average monthly salary for social insurance contribution = {(Total salary for the last (x) years before quitting) / {(x) * 12 months)}

(x) is specifically calculated as:

x = 5 (Participated in social insurance before January 1, 1995)

x = 6 (Participated in social insurance from January 1, 1995 to December 31, 2000)

x = 8 (Participated in social insurance from January 1, 2001 to December 31, 2006)

x = 10 (Participated in social insurance from January 1, 2007 to December 31, 2015)

x = 15 (Participated in social insurance from January 1, 2016 to December 31, 2019)

x = 20 (Participated in social insurance from January 1, 2020 to December 31, 2024)

Participation from January 1, 2025 => Calculated on the average of the entire period of social insurance contribution.

- For employees who have paid social insurance based on the salary decided by their employer:

Average monthly salary for social insurance contribution = Total salary for social insurance contribution / Total months of social insurance contribution.

- For employees who have a mixed period of contribution based on the employer's salary decision and the state's salary policies:

Average monthly salary for social insurance contribution = (Total salary under state policies + Total salary under employer's policies) / Total months of social insurance contribution.

Pension rate % is calculated as follows:

- Female employees retiring from 2018 onward, having paid social insurance for 15 years (calculation = 45% of the average monthly salary for social insurance contribution), an additional 2% for each additional year of contribution. Maximum is 75%.

Example: A female employee retires from 2018, having paid social insurance for 20 years (an additional 5 years adds 10%). Therefore, the pension rate % for this female employee is 55% of the average monthly salary for social insurance contribution.

- Male employees follow the table below, with an additional 2% for each additional year of contribution. Maximum is 75% (additional % similar to female employees).

Note: For each year of early retirement before the stipulated age, reduce by 2%. In cases where the retirement age has an odd period of up to 6 months, the reduction is 1%; above 6 months, no percentage reduction for early retirement is applied.

The above content stipulates the pension calculation method. To understand this matter more clearly, you should refer to the Social Insurance Law 2014.

Best regards!