Do foreigners working in Vietnam have to participate in social insurance?

Do foreigners working in Vietnam have to participate in social insurance? (Internet image)

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

1. Do foreigners working in Vietnam have to participate in social insurance?

According to Clauses 1 and 2, Article 2 of Decree 143/2018/ND-CP stipulates:

- 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.

- Employees referred to in clause 1 of Article 2 of Decree 143/2018/ND-CP shall be excluded from participation in the compulsory social insurance as provided herein if:

+ They are intra-company transferees as stipulated in clause 1 Article 3 of Decree 11/2016/ND-CP dated February 3, 2016, providing details of the implementation of certain articles of the Labor Code 2019 regarding foreign employees working in Vietnam.

+ They reach retirement age under clause 1 Article 187 of the Labor Code 2019.

Thus, foreign workers must participate in compulsory social insurance when they have a work permit or practice certificate or practice license issued by a competent Vietnamese agency and have an indefinite labor contract. term, fixed-term labor contract of 01 year or more with an employer in Vietnam.

2. Social insurance contribution rates for foreigners in working Vietnam

Regulations on social insurance (SI) contribution rates for foreigners are similar to those for Vietnamese workers, specifically:

-  SI contribution rates at the employee side:

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

+ The employee 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.

- 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), the employer 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.

Note: 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.

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.

Thus, the mandatory social insurance contribution rate for foreign employers is calculated monthly based on the employee's social insurance contribution fund. The contribution rate is 3% for the sickness and maternity fund and 14% for the retirement and survivorship fund.

Nguyen Ngoc Que Anh

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE