Recently, the National Assembly officially approved not to increase the statutory pay rate for 2021 and to continue applying the current salary level of 1.49 million VND/month. With the statutory pay rate for 2021 not increasing, employees still enjoy certain benefits.
Article table of contents
Vietnam: What are benefits for employees when the statutory pay rate remains unchanged? (Illustration photo)
To be specific, due to the impact of the Covid-19 pandemic, the statutory pay rate 2021 will not increase and will remain the same at 1,490,000 VND/month as stipulated in Decree 38/2019/ND-CP regarding the statutory pay rate for officials, public employees, and armed forces (this is an important content agreed upon in Resolution 128/2020/QH14 on the state budget estimates for 2021). Salaries of officials and public employees, as well as certain allowances for officials, public employees, and workers calculated based on the statutory pay rate will remain unchanged, contrary to prior expectations. Nevertheless, from another perspective, when the statutory pay rate 2021 does not increase, workers will also enjoy certain benefits as follows:
First: Social insurance and health insurance contributions will not increase.
According to the provisions of Point e, Clause 1, Article 7 of Decree 146/2018/ND-CP, the health insurance contribution rates for family participation in health insurance are calculated based on the statutory pay rate as follows:
- The first member contributes 4.5% of the statutory pay rate
- The second member contributes 70% of the first member's contribution;
- The third member contributes 60% of the first member's contribution;- The fourth member contributes 50% of the first member's contribution;
- The fifth and subsequent members contribute 40% of the first member's contribution.
In addition, Articles 5 and Clause 3, Article 6 of Decision 595/QD-BHXH stipulate the social insurance contribution rates for workers as follows:
- Part-time workers at commune-level, wards, and commune-level towns monthly contribute 8% of the statutory pay rate to the retirement and survivor fund;
- Workers working abroad under contracts for sending labor abroad; contracts for training internships; individual contracts contribute monthly 22% of the monthly salary that is used as the basis for social insurance contributions before going abroad, for those who have previously participated in compulsory social insurance; contribute 22% of two times the statutory pay rate for those who have not participated in compulsory social insurance or have participated but have received a lump-sum social insurance payment;
- Workers receiving policies as spouses of representatives of Vietnam abroad contribute monthly 22% of the monthly salary that is used as the basis for social insurance contributions before, for those who have previously participated in compulsory social insurance; contribute 22% of two times the statutory pay rate for those who have not participated in compulsory social insurance or have participated but received a lump-sum social insurance payment.
Thus, based on the above regulations, the statutory pay rate serves as a basis for calculating certain types of social insurance and health insurance contributions. Therefore, when the statutory pay rate for 2021 does not increase, it also implies that these contribution rates do not increase, which is considered a benefit for workers when the statutory pay rate 2021 remains unchanged.
Second: Contributions to grassroots trade unions will not increase.
According to the provisions of Article 23 of Decision 1908/QD-TLD, the monthly union fee contributions are stipulated as follows:
- Union members at grassroots trade unions in state agencies, political organizations, political-social organizations, political-social-professional organizations, social organizations, social-professional organizations; units of the armed forces: Monthly union fee contributions are 1% of the salary used as a basis for social insurance contributions.
- Union members at grassroots trade unions in state-owned enterprises (including those in joint-stock companies where the state holds controlling shares): Monthly union fee contributions are 1% of actual earnings (deducted by social insurance, health insurance, unemployment insurance contributions, and personal income tax), but the maximum monthly contribution is 10% of the statutory pay rate.
- Union members at grassroots trade unions in non-state enterprises; non-public service units with salaries not based on state salary scales and coefficients; cooperative unions; foreign organizations, international organizations operating in Vietnam; foreign party offices in business cooperation contracts in Vietnam; union members working abroad: Monthly union fee contributions are 1% of the salary used as a basis for social insurance contributions, but the maximum monthly contribution is 10% of the statutory pay rate.
- Union members in associations, grassroots trade unions in enterprises; union members not subject to social insurance contributions: Union fee contributions are based on set amounts, but the lowest contribution is 1% of the statutory pay rate.
Thus, according to the above regulations, union fee contributions for grassroots trade union members are minimal at 1% of the statutory pay rate and a maximum of 10% of the statutory pay rate. From 2021, the minimum union fee contribution remains at 14,900 VND/month and the maximum at 149,000 VND/month.
Ty Na
