Compulsory social insurance contribution rates for foreign workers in Vietnam 2023

Compulsory social insurance contribution rates for foreign workers in Vietnam 2023 (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Conditions for participation in compulsory social insurance for foreign workers in Vietnam

Conditions for participation in compulsory social insurance (SI) for foreign workers according to Clause 1, Article 2 of Decree 143/2018/ND-CP are as follows:

Employees who are foreign nationals working in Vietnam shall be required to participate in the compulsory SI program if they obtain work permits, practicing certificates, practicing licenses issued in Vietnam, indefinite-term employment contracts or employment contracts valid for at least one year with employers in Vietnam.

2. SI contribution rates and methods at the employee side in Vietnam

SI contribution rates and methods at the employee side according to Article 12 of Decree 143/2018/ND-CP are as follows:

- From January 1, 2022, the employee prescribed in clause 1 Article 2 hereof shall, on a monthly basis, make a SI contribution accounting for 8% of his/her monthly pay to the retirement and death benefit fund.

- The employee who neither works nor receives salaries or wages for a period of at least 14 working days in each month shall not be bound to pay the SI contribution in that month.  This month shall not be taken into account to determine entitlement to SI benefits, except for parental leaves.

3. SI contribution rates and methods at the employer side in Vietnam

SI contribution rates and methods at the employer side according to Article 13 of Decree 143/2018/ND-CP (amended in Decree 58/2020/ND-CP) are as follows:

- The employer specified in clause 3 Article 2 of Decree 143/2018/ND-CP shall, on a monthly basis, make a SI contribution in proportion to the employee’s payroll in the SI payment month as follows:

+ 3% of the abovementioned payroll paid into the sickness and parental insurance benefit fund;

+ 14% of the abovementioned payroll paid into the retirement and death insurance benefit fund, in effect from January 1, 2022.

- The employer shall not be required to pay SI contributions for their employees as provided in clause 2 Article 12 of Decree 143/2018/ND-CP.

- Based on the capability of state budget balances for the occupational accident and disease insurance benefit fund, the Government shall consider adjusting the contribution rate as provided in point b clause 1 of Article 13 of Decree 143/2018/ND-CP from January 1, 2020.

- The employee who enters into multiple employment contracts with more than one employer and is required to participate in the compulsory SI program, both the employee and the employer shall only have to pay SI contributions as agreed upon in the first employment contract. 

If wishing to participate in the occupational accident and disease insurance fund, the employee shall be required to pay SI contributions per each employment contract.

4.SI participation and SI benefit handling processes and procedures

SI participation and SI benefit handling processes and procedures according to Article 15 of Decree 143/2018/ND-CP are as follows:

- SI participation and SI benefit handling processes and procedures prescribed in clause 1 Article 2 hereof shall be the same as those applied to Vietnamese employees and shall be subject to provisions laid down in Chapter VII of the Law on Social Insurance;

Article 57, 58, 59, 60, 61 and 62 of the Law on Occupational Safety and Hygiene; Article 5 of the Decree 115/2015/ND-CP; Article 9, 10, 13, 14, 17, 18, 21, 22, 25 and Article 26 of the Decree 37/2016/ND-CP, except provisions laid down in clause 3 of Article 15 and Article 16 of Decree 143/2018/ND-CP.

- If documents submitted to apply for SI participation and SI benefit handling by employees as defined in clause 1 of Article 15 of Decree 143/2018/ND-CP are issued by agencies in these employees' home countries, they must be translated into Vietnamese and certified under Vietnamese laws.

- Processes for handling of the one-off SI benefit payment

Within the duration of 10 days before the employment contract is terminated or the labor permit, practicing certificate or practicing license expires (whichever comes first), if the employee does not continue to work under an employment contract or does not apply for renewal of his/her permit, certificate or license, and he/she wishes to receive the one-off SI benefit payment, he/she shall be required to submit necessary application documents to the social insurance agency.  

Within the duration of 05 working days from the date of receipt of all required documents, the social insurance agency shall be responsible for processing employees’ applications and paying SI benefits to employees. In case of refusal, the written response clearly stating reasons must be given.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE