Subjects adjusted for salaries and monthly income contributed to social insurance in Vietnam under Circular 01/2025

Subjects adjusted for salaries and monthly income contributed to social insurance in Vietnam under Circular 01/2025​ (Image from the internet)

On January 10, 2025, the Minister of Labor, War Invalids and Social Affairs of Vietnam issued Circular 01/2025/TT-BLDTBXH prescribing the adjustment of wages and monthly income for social insurance contributions, effective from February 28, 2025.

Subjects adjusted for salaries and monthly income contributed to social insurance in Vietnam under Circular 01/2025​

According to Article 1 of Circular 01/2025/TT-BLDTBXH, the subjects are defined as follows:

- Subjects for wage adjustments for social insurance contributions according to Clause 1 and Clause 2, Article 10 of Decree 115/2015/ND-CP, include:

+ Employees subject to state-prescribed wage policies who began participating in social insurance from January 1, 2016, onwards and entitled to pension, lump-sum allowance upon retirement, one-time social insurance, or deceased with kin entitled to one-time survivorship allowances from January 1, 2025, to December 31, 2025.

+ Employees contributing to social insurance under wage policies determined by employers, entitled to pension, lump-sum allowance upon retirement, one-time social insurance, or deceased with kin entitled to one-time survivorship allowances during the period from January 1, 2025, to December 31, 2025.

- Subjects for monthly income adjustment who have voluntarily participated in social insurance according to Clause 2, Article 4 of Decree 134/2015/ND-CP and are entitled to pension, lump-sum allowance upon retirement, one-time social insurance, or deceased with kin entitled to one-time survivorship allowances during the period from January 1, 2025, to December 31, 2025.

Average monthly wage for social insurance contributions to calculate pensions and lump-sum allowances in Vietnam

According to Article 9 of Decree 115/2015/ND-CP, the average monthly wage for social insurance contributions to calculate pensions and lump-sum allowances as prescribed in Article 62 of the Law on Social Insurance 2014 is regulated as follows:

- Employees subject to state-prescribed wage policies who have entirely contributed to social insurance under these policies calculate the average monthly wage of the years contributed to social insurance before retirement as follows:

+ Participation in social insurance before January 1, 1995: calculate the average of the last 5 years of monthly wages contributed before retirement;

+ Participation in social insurance from January 1, 1995, to December 31, 2000: calculate the average of the last 6 years of monthly wages contributed before retirement;

+ Participation in social insurance from January 1, 2001, to December 31, 2006: calculate the average of the last 8 years of monthly wages contributed before retirement;

+ Participation in social insurance from January 1, 2007, to December 31, 2015: calculate the average of the last 10 years of monthly wages contributed before retirement;

+ Participation in social insurance from January 1, 2016, to December 31, 2019: calculate the average of the last 15 years of monthly wages contributed before retirement;

+ Participation in social insurance from January 1, 2020, to December 31, 2024: calculate the average of the last 20 years of monthly wages contributed before retirement;

+ Participation in social insurance from January 1, 2025, onwards: calculate the average of the entire period of monthly wages contributed.

- Employees who have entirely contributed to social insurance under employer-determined wage policies calculate the average of the entire period of monthly wages contributed to social insurance.

- Employees with periods contributing to social insurance under both state-prescribed wage policies and employer-determined wage policies calculate the overall average monthly wage for social insurance contributions. The period under state-prescribed policies is averaged according to Clause 1, Article 9 of Decree 115/2015/ND-CP, based on the starting point of mandatory social insurance participation. If fewer years are contributed than prescribed in Clause 1, Article 9 of the same decree, then an average of the months contributed to social insurance is calculated.

- Employees who have contributed to social insurance for 15 years or more under the wage levels in the following jobs and then transfer to another lower-paid job will, upon retirement, receive the highest wage applicable to the job mentioned in Point a, Clause 4, Article 9 of Decree 115/2015/ND-CP below, or the wage before the transition, corresponding to the years prescribed in Clause 1, Article 9 of the same decree for calculating the average wage as a basis for pension calculation:

+ Special heavy, toxic, dangerous, and heavy, toxic, dangerous jobs in the wage scale as regulated by the State;

+ Officers, professional soldiers in the People's Army, trade professionals, technical officers in the People's Police, personnel working in cipher organizations enjoying salaries equivalent to soldiers, and police who transition to work at state-regulated wage tables in agencies, organizations, units, and enterprises.

- Employees who have contributed to social insurance before October 1, 2004, under state-prescribed wage policies and receive social insurance from January 1, 2016, onwards will have their monthly wages for social insurance contributions calculated based on the wage policies regulated at the time of retirement as a basis for enjoying social insurance.

- Employees under state-prescribed wage policies who have contributed to social insurance, including seniority allowances, and then shifted to jobs without seniority allowances where basic monthly social insurance wages do not include seniority allowances will have their average monthly wages for social insurance contributions at retirement calculated, with an added seniority allowance (if applicable), calculated based on the time contributed to social insurance including seniority allowances, converted according to the wage policies regulated at the time of retirement as a basis for pension calculation.

In the case where employees shift to jobs with seniority allowances and the monthly social insurance wage basis already includes seniority allowances, the average monthly wage for social insurance contributions to calculate pensions shall follow the regulations in Clause 1, Article 9 of Decree 115/2015/ND-CP.

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