How to calculate late payment interest on Social Insurance, Health Insurance, Unemployment Insurance in Vietnam?

Formula for calculating late payment interest in Vietnam:

Lcđi = Pcdi x k (VND)           (1)

In which:

- Lcđi: late payment interest for compulsory social insurance, health insurance, unemployment insurance calculated in month i (VND).

- Pcdi: the amount of compulsory social insurance, health insurance, unemployment insurance overdue for payment that needs to be calculated for interest in month i (VND), determined as follows:

Pcdi = Plki - Spsi (VND)         (2)

In which:

- Plki: the total accumulated amount of compulsory social insurance, health insurance, unemployment insurance payable up to the end of the month preceding the month i for the interest calculation (excluding late payment interest, back payment interest from previous periods if any).

- Spsi: the amount of compulsory social insurance, health insurance, unemployment insurance that is newly incurred and not yet overdue, determined as follows:

- In case the unit pays monthly: The amount of compulsory social insurance, health insurance, unemployment insurance incurred is equal to the amount arising in the month preceding the month for interest calculation;

- In case the unit pays every 3 months, 6 months: The amount of compulsory social insurance, health insurance, unemployment insurance incurred is equal to the total amount incurred in the months preceding the month for interest calculation that are not yet due.

- k: interest rate for late payment at the time of interest calculation (%), determined as follows:

For compulsory social insurance, unemployment insurance, k is calculated at 2 times the average annual investment rate of the social insurance fund of the preceding year, announced monthly by Vietnam Social Security.

For health insurance, k is calculated at 2 times the average annual interbank market interest rate for a 9-month term as announced monthly by the State Bank of Vietnam on its official portal in the preceding year. In case the interbank interest rate of the preceding year does not have a 9-month term, the interest rate for the term immediately preceding the 9-month term applies.

Refer to the example in Official Dispatch 1379/BHXH-BT issued on April 20, 2016.

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