Vietnam: How much is the voluntary social insurance premium upon increasing the statutory pay rate?

How much is the voluntary social insurance premium upon increasing the statutory pay rate in Vietnam?

Article 87 of the Social Insurance Law 2014 specifies the levels and methods of payment by employees covered by voluntary social insurance in Vietnam as follows:

Levels and methods of payment by employees covered by voluntary social insurance

1. Employees defined in Clause 4, Article 2 of this Law shall monthly pay an amount equivalent to 22% of their monthly incomes as selected to the retirement and survivorship allowance fund; the monthly income on which social insurance premiums are based must at least equal the poverty threshold in rural areas and must not exceed 20 times the statutory pay rate.

The socio-economic development conditions and state budget capacity in each period shall be based on to determine the levels of support for payment of social insurance premiums for employees covered by voluntary social insurance, support beneficiaries, and the time for implementing the support policy.

2. Employees may select one of the following payment methods:

a/ Every month;

b/ Every 3 months;

c/ Every 6 months;

d/ Every 12 months;

d/ Lump-sum payment for many subsequent years at a level lower than the monthly payment or lump-sum payment for the insufficient years at a level higher than the monthly payment as specified in this Article.

3. The Government shall detail this Article.

Article 3 of Decree 73/2024/ND-CP stipulates the statutory pay rate as follows:

Statutory pay rate

1. The statutory pay rate shall be used as the basis for:

a) Calculating salaries in payrolls, allowances and other benefits as per the law with regard to individuals defined in Article 2 of this Decree;

b) Calculating operation funding and subsistence allowances as per the law;

c) Calculating deductions and benefits according to the statutory pay rate.

2. From July 01, 2024, the statutory pay rate is VND 2,340,000 per month.

Thus, the voluntary social insurance premium is 22% of the monthly income as selected by employees to the retirement and survivorship allowance fund;

The lowest voluntary social insurance premium shall not be lower than the rural poverty threshold;

The highest voluntary social insurance premium shall not exceed 20 times the statutory pay rate, equivalent to 46,800,000 VND (from July 1, 2024).

How much is the voluntary social insurance premium upon increasing the statutory pay rate in Vietnam? (Image from Internet)

In Vietnam, how many methods of voluntary social insurance premium payment are there in 2024?

According to Article 9, Decree 134/2015/ND-CP, there are 6 methods for voluntary social insurance premium payment in 2024, which include:

1) Payment every month;

2) Payment every 03 months;

3) Payment every 06 months;

4) Payment every 12 months;

5) Lump-sum payment for up to 5 years;

6) Paying a lump sum premium for the remaining years: A person who has reach the statutory retirement age and has paid social insurance premiums for at least 10 years may pay a lump sum premium for the remaining years to be entitled to retirement pension.

In the event a social insurance participant who has reached the statutory retirement age and has paid social insurance premiums for less than 10 years may continue to pay periodic voluntary social insurance according to one of the methods described in 05 methods specified above until the requirements of the method (6) are met and then pay a lump sum premium for the remaining years to be entitled to retirement pension.

When is it considered a suspension of paying voluntary social insurance premiums in Vietnam?

According to Clause 3, Article 12 of Decree 134/2015/ND-CP:

Time of premium payment

1. The time of payment of social insurance premiums according to the methods described in Points a, b, c and d, Clause 1, Article 9 of this Decree is specified as follows:

a) Within a month, for the method of payment every month;

b) Within 03 months, for the method of payment every 03 months;

c) Within the first 04 months, for the method of payment every 06 months;

d) Within the first 07 months, for the method of payment every 12 months;

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3. Past the time of social insurance premium payment prescribed in Clause 1 of this Article, if a voluntary social insurance participant fails to pay social insurance premiums, he/she shall be considered having suspended paying voluntary social insurance premiums. The person who suspends the payment of voluntary social insurance premiums and then wishes to continue the payment, he/she shall re-register with social insurance agencies the payment method and monthly income on which social insurance premiums are based. In the event he/she wishes to make payment for the months he/she suspends the payment, the amount of payment equals the total premiums of the months they suspend the payment, plus an interest at the social insurance fund’s average monthly investment interest rate announced by the Vietnam Social Security in the year preceding the year of payment.

Thus, if a voluntary social insurance participant fails to pay social insurance premiums on time, he/she shall be considered having suspended paying voluntary social insurance premiums:

- In the month for monthly payments.

- Within 3 months for 3-month payments.

- Within the first 4 months for 6-month payments.

- Within the first 7 months for 12-month payments.