Starting to pay social insurance premiums from 2022 in Vietnam, what will average monthly salary on which social insurance premiums are based?

Starting to pay social insurance premiums from 2022 in Vietnam, what will average monthly salary on which social insurance premiums are based?

Article 62 of the Law on Social Insurance 2014 stipulates average monthly salary on which social insurance premiums are based for calculation of pension and lump-sum allowance as follows:

1. For employees subject to the State-prescribed salary benefits and having the entire period of social insurance premium payment under this salary benefits, the average monthly salary for the number of years of social insurance premium payment before retirement must be:

a/ The average monthly salary on which social insurance premiums are based in the last 5 years prior to retirement, for employees paying social insurance premiums before January 1, 1995;

b/ The average monthly salary on which social insurance premiums are based in the last 6 years prior to retirement, for employees paying social insurance premiums between January 1, 1995, and December 31, 2000;

c/ The average monthly salary on which social insurance premiums are based in the last 8 years prior to retirement, for employees paying social insurance premiums between January 1, 2001, and December 31, 2006;

d/ The average monthly salary on which social insurance premiums are based in the last 10 years prior to retirement, for employees paying social insurance premiums between January 1, 2007, and December 31, 2015;

dd/ The average monthly salary on which social insurance premiums are based in the last 15 years prior to retirement, for employees paying social insurance premiums between January 1, 2016, and December 31, 2019;

e/ The average monthly salary on which social insurance premiums are based in the last 20 years prior to retirement, for employees paying social insurance premiums between January 1, 2020, and December 31, 2024;

g/ The average monthly salary on which social insurance premiums are based in the entire period of social insurance premium payment, for employees paying social insurance premiums since January 1, 2025.

2. For employees who have the entire period of social insurance premium payment under the employer-decided salary benefits, the average monthly salary on which social insurance premiums are based in the entire period of payment shall be used.

3. For employees who have both a period of social insurance premium payment under the State-prescribed salary benefits and a period of social insurance premium payment under the employer-decided salary benefits, the average monthly salary on which social insurance premiums are based in these periods shall be used, in which for the period of social insurance premium payment under the State-prescribed salary benefits, the average monthly salary on which social insurance premiums are based as specified in Clause 1 of this Article shall be used.

4. The Government shall detail this Article.

According to current regulations in Vietnam, in case of participating in social insurance from January 1, 2020 to December 31, 2024, the average monthly salary on which social insurance premiums are based of the last 20 years before retirement. 

Therefore, if you start paying social insurance premiums from 2022, the average monthly salary on which social insurance premiums are based will be calculated for the last 20 years before retirement in Vietnam.

How many years do male employees pay social insurance premiums to receive the minimum monthly pension in Vietnam?

Article 56 of the Law on Social Insurance 2014 provides for the monthly pension as follows:

1. From the effective date of this Law to January 1, 2018, the monthly pension of employees who fully satisfy the conditions specified in Article 54 of this Law must equal 45% of the average monthly salary on which social insurance premiums are based as prescribed in Article 62 of this Law, corresponding to 15 years of social insurance premium payment, which shall be added with 2%, for men, or 3%, for women, for each additional year of social insurance premium payment, but must not exceed 75%.

2. Since January 1, 2018, the monthly pension of employees who fully satisfy the conditions specified in Article 54 of this Law will equal 45% of the average monthly salary on which social insurance premiums are based as prescribed in Article 62 of this Law, and correspond to the following period of social insurance premium payment:

a/ For male employees who retire in 2018, 2019, 2020 and 2021 and since 2022, it is 16 years, 17 years, 18 years, 19 years and 20 years, respectively;

b/ For female employees who retire since 2018, it is 15 years;

For employees defined at Points a and b of this Clause, the pension rate shall be added with 2% for each additional year of social insurance premium payment, but must not exceed 75%.

3. The monthly pension of employees who fully satisfy the conditions specified in Article 55 of this Law shall be calculated as stipulated in Clauses 1 and 2 of this Article, and reduced by 2% for each year of early retirement.

In case an employee’s age is short of up to 6 months compared to the retirement age, his/her pension shall be reduced by 1%; if his/her age is short of under 6 months, his/her pension shall not be reduced due to early retirement.

4. The monthly pension of female employees who fully satisfy the conditions for pension enjoyment specified in Clause 3 of Article 54 shall be calculated based on the period of social insurance premium payment and average monthly salary on which social insurance premiums are based, specifically as follows: for a period of full 15 years, the monthly pension must equal 45% of the average monthly salary on which social insurance premiums are based as specified in Article 62 of this Law; for a period of between full 16 years to under 20 years, the monthly pension shall be added with 2% for each additional year of payment.

5. The lowest monthly pension of employees covered by compulsory social insurance who fully satisfy the conditions for pension enjoyment specified in Article 54 or 55 of this Law must equal the statutory pay rate, except the cases specified at Point i, Clause 1, Article 2, and Clause 3, Article 54, of this Law.

6. The Government shall detail this Article.

Thus, male employees who have paid social insurance premiums for at least 20 years will be entitled to a minimum monthly pension in Vietnam.

When employees pay social insurance premiums, what are regulations on lump-sum allowance upon retirement in Vietnam?

Article 58 of the Law on Social Insurance 2014 provides for lump-sum allowance upon retirement as follows:

1. Employees who have paid social insurance premiums for a period exceeding the number of years corresponding to the 75% pension rate are entitled to not only pension but also a lump-sum allowance upon retirement.

2. The lump-sum allowance level shall be calculated based on the number of years of social insurance premium payment in excess of the number of years corresponding to the 75% pension rate, with half of the average monthly salary on which social insurance premiums are based for each of these years.

According to this Article, the lump-sum allowance for employees paying social insurance premiums will be implemented in accordance with the above regulations in Vietnam.

Best Regards!