Methods to Minimize Social Insurance Contributions for Employees from January 01, 2018

Catching up with the actual situation through various queries from readers sent to THU KY LUAT, now THU KY LUAT would like to present to our readers an article on how to reduce social insurance payment for both employees and employers starting from January 01, 2018.

First, it must be emphasized that this is a legitimate desire of employees as it is not prohibited by law. The guidance in this article is also based on current legal regulations on social insurance.

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According to Clause 2, Article 30 of Circular 59/2015/TT-BLDTBXH, from January 01, 2018:

Thus, to minimize social insurance contributions as per regulations, enterprises, units, and employers... will declare the Social insurance salary (including basic salary, salary allowance, and other additional amounts) of employees at the lowest possible level and ensure conformity with the regional minimum wage.

The remaining amount in the employees' monthly income can be declared by the unit and employer into non-social insurance calculated amounts specified in Article 30 of Circular 59/2015/TT-BLDTBXH such as bonuses, innovation rewards, meal allowances, fuel support, phone bills, travel allowances...

By declaring such income items, along with the current social insurance contribution rates for employees and employers as stipulated in Decision 595/QD-BHXH, the social insurance contributions of both employees and employers will be reduced to the minimum level as desired.

It should be noted that implementing this declaration to reduce social insurance contributions is not against regulations and is not a "loophole exploitation." Instead, it is an option available to employees through an agreement between both parties and is entirely permitted by law.

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