Legal grounds

Compulsory Social Insurance

Voluntary Social Insurance

Definition

Clause 2 Article 3 of Law on Social Insurance 2014

Compulsory social insurance means a form of social insurance organized by the State in which employees and employers are required to participate.

Voluntary social insurance means a form of social insurance organized by the State in which a participant may select a premium rate and a method of premium payment suitable to his/her income and the State supports his/her payment of social insurance premiums for him/her to enjoy retirement and survivorship allowance regimes.

Article 4 of Law on Social Insurance 2014

Compulsory social insurance covers the following regimes:

a/ Sickness;

b/ Maternity;

c/ Labor accident and occupational disease;

d/ Retirement;

dd/ Survivorship allowance.

Voluntary social insurance covers the following regimes:

a/ Retirement;

b/ Survivorship allowance.

Subjects of application

- Article 2 of Law on Social Insurance 2014

- Clause 1 Article 2 Decree 134/2015/ND-CP

- Clause 1 Article 2 Circular 01/2016/TT-BLDTBXH

1. Employees being Vietnamese citizens shall be covered by compulsory social insurance, including:

a/ Persons working under indefinite-term labor contracts, definite-term labor contracts, seasonal labor contracts or contracts for given jobs with a term of between full 3 months and under 12 months, including also labor contracts signed between employers and at-law representatives of persons aged under 15 years in accordance with the labor law;

b/ Persons working under labor contracts with a term of between full 1 month and under 3 months;

c/ Cadres, civil servants and public employees;

d/ Defense workers, public security workers and persons doing other jobs in cipher organizations;

dd/ Officers and professional army men of the people's army; officers and professional non-commissioned officers and officers and technical non- commissioned officers of the people's public security; and persons engaged in cipher work and enjoying salaries like army men;

e/ Non-commissioned officers and soldiers of the people’s army; non- commissioned officers and soldiers on definite-term service in the people’s public security; army, public security and cipher cadets who are entitled to cost- of-living allowance;

g/ Vietnamese guest workers defined in the Law on Vietnamese Guest Workers;

h/ Salaried managers of enterprises and cooperatives;

i/ Part-time staffs in communes, wards and townships.

2. Employees who are foreign citizens working in Vietnam with work permits or practice certificates or practice licences granted by competent Vietnamese agencies shall be covered by compulsory social insurance under the Government’s regulations.

3. Employers covered by compulsory social insurance include state agencies, non-business units and people's armed forces units; political organizations, socio-political organizations, socio-politico-professional organizations, socio-professional organizations and other social organizations; foreign agencies and organizations, and international organizations operating in the Vietnamese territory; enterprises, cooperatives, individual business households, cooperative groups, and other organizations and individuals that hire or employ employees under labor contracts.

The persons participating in voluntary social insurance specified in Clause 1, Article 2 of Decree No. 134/2015/ND-CP are the Vietnamese citizens from full 15 years of age or older and are not the persons participating in voluntary social insurance in accordance with regulations of law on social insurance, including:

a) The employees working under labor contract with duration of less than 03 months before 01/01/2018; the employees working under labor contract with duration of less than 01 month from 01/01/2018 onwards;

b) The persons working part-time at hamlets, villages, residential groups, areas and quarters;

c) Domestic workers;

d) The persons participating in production, business and services without salary

dd) Cooperative members not entitled to salary or remuneration working in cooperatives and unions of cooperatives;

e) Farmers and employees creating jobs for themselves including the persons organizing the working activities to have income for themselves and their families.

g) Employees meeting the conditions of age but not the time of payment to enjoy their pension in accordance with regulations of law on social insurance;

h) Other participants.

The persons stipulated above are generally called the participants of voluntary social insurance.

Social insurance premium rate

- Article 5, 85, 86 of the Law Social Insurance 2014

- Clause 1 Article 87 of the Law Social Insurance 2014; Article 10 of Decree No. 134/2015/ND-CP

- Article 13 of Decree No. 143/2016/ND-CP; Article 4 of Decree No. 58/2020/ND-CP

The compulsory social insurance premium rate shall be calculated based on an employee’s monthly salary. The voluntary social insurance premium rate shall be calculated based on the monthly income selected by employees.

1. For employees

- Employees defined at Points (1), (2), (3), (4), (5) and (8) shall monthly pay 8% of their monthly salary to the retirement and survivorship allowance fund.

- Employees defined at Point (9) shall monthly pay an amount equal to 8% of the basic salary to the retirement and survivorship allowance fund.

- For employees defined at Point (7). 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 basic salary, 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.

2. For employers

- Employers shall make monthly payments calculated based on the salary funds on which social insurance premiums are based for employees defined at Points (1), (2), (3), (4), (5) and (8) as follows:

a/ 3% to the sickness and maternity fund;

b/ 0,5% to the labor accident and occupational disease fund (in some case, if approved, the payment rate is 0.3%)

c/ 14% to the retirement and survivorship allowance fund.

- Employers shall make monthly payments calculated based on the basic salary for each employee defined at Point (6) as follows:

a/ 0,5% to the labor accident and occupational disease fund;

b/ 22% to the retirement and survivorship allowance fund.

- Employers shall monthly pay an amount equal to 14% of the basic salary to the retirement and survivorship allowance fund for employees defined at Point (9).

- Employers shall make monthly payments calculated based on the salary funds on which social insurance premiums are based for employees defined at Point (7):

a/ 3% to the sickness and maternity fund;

b/ 0,5% to the labor accident and occupational disease fund (in some case, if approved, the payment rate is 0.3%)

The monthly premium equals 22% of the monthly income decided by the voluntary social insurance participant.

The monthly income decided by a voluntary social insurance participant must at least equal the poverty line in rural areas as prescribed by the Prime Minister and must not exceed 20 times the statutory pay rate at the time of payment.