Incomes that are not subject to compulsory social insurance in Vietnam

Incomes that are not subject to compulsory social insurance in Vietnam (Internet image)

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

1. Incomes that are not subject to compulsory social insurance in Vietnam

Specifically, Clause 3, Article 30 of Circular 59/2015/TT-BLDTBXH (amended in Circular 06/2021/TT-BLDTBXH) stipulates that  Monthly salary serving as the basis for compulsory social insurance contribution does not include other benefits and policies such as

- Awards according to Article 104 of the Labor Code, invention awards; mid-shift meal;

- Travel, communication, accommodation, childcare allowances;

- Allowances when relatives of workers decease, relatives of workers get married, birthday of workers, allowances for workers facing difficulty as a result of occupational diseases and accidents,

- Other allowances and benefits specified separately under employment contracts according to Sub-point c2 Point c Clause 5 Article 3 of Circular 10/2020/TT-BLDTBXH.

2. Levels and methods of payment by employees covered by compulsory social insurance in Vietnam

Pursuant to Article 85 of the Law on Social Insurance 2014, the levels and methods of payment by employees covered by compulsory social insurance are as follows:

- Employees defined at Points a, b, c, d, dd and h, Clause 1, Article 2 of the Law on Social Insurance 2014 shall monthly pay 8% of their monthly salary to the retirement and survivorship allowance fund.

Employees defined at Point i, Clause 1, Article 2 of the Law on Social Insurance 2014 shall monthly pay an amount equal to 8% of the statutory pay rate to the retirement and survivorship allowance fund.

- For employees defined at Point g, Clause 1, Article 2 of the Law on Social Insurance 2014, the levels and methods of payment are specified as follows:

+ The monthly level of payment to the retirement and survivorship allowance fund must equal 22% of employees’ monthly salary on which social insurance premiums are based before they go abroad to work, for employees who have paid compulsory social insurance premiums in a certain period;

22% of 2 times the statutory pay rate, for employees who are not yet covered by compulsory social insurance or who have paid compulsory social insurance premiums and have already received a lump-sum social insurance allowance.

+ Payment shall be made once every 3 months, every 6 months or every 12 months or in a lump sum within the time limit stated in the contracts on sending of employees to work abroad.

Employees may make payment directly to social insurance agencies of localities where they reside before going abroad or via enterprises or non-business organizations that have sent them to work abroad.

In case the payment is made via enterprises or non-business organizations that have sent employees to work abroad, these enterprises or organizations shall collect and pay social insurance premiums for employees and register the method of payment with social insurance agencies.

Employees who have their contracts extended or sign new contracts in the host countries shall pay social insurance premiums according to the method specified in Article 85 of the Law on Social Insurance 2014 or shall retrospectively pay social insurance premiums to social insurance agencies after they repatriate.

- Employees who neither work nor receive salary for 14 working days or more in a month are not required to pay social insurance premiums in that month. This period shall not be counted for enjoyment of social insurance benefits, except cases of maternity leave.

- An employee defined at Point a or b, Clause 1, Article 2 of the Law on Social Insurance 2014 who signs labor contracts with many employers shall only pay social insurance premiums under Clause 1 of Article 85 of the Law on Social Insurance 2014 for the first-signed labor contract.

- Employees who enjoy product-based or piecework-based salaries at enterprises, cooperatives, individual business households or cooperative groups engaged in the fields of agriculture, forestry, fishery or salt making shall pay monthly social insurance premiums at the levels specified in Clause 1 of Article 85 of the Law on Social Insurance 2014; payment may be made every month, every 3 months or every 6 months.

- The determination of the period of social insurance premium payment for enjoyment of pension and monthly survivorship allowance must adhere to the principle that one year has full 12 months;

An employee who satisfies the age requirement for pension enjoyment but whose period of social insurance premium payment is short of 6 months at most may pay a lump-sum amount for these months with the monthly premium equal to the total premiums paid by him/her and his/her employer to the retirement and survivorship allowance fund, based on the monthly salary on which social insurance premiums were based before he/she ceases working.

- The calculation of periods of social insurance premium payment with odd months for enjoyment of the retirement and survivorship allowance benefits must be as follows:

+ A period of between 1 month to 6 months shall be counted as half year;

+ A period of between 7 months to 12 months shall be counted as one year.

Ho Quoc Tuan

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