Mandatory Insurance Contributions in Vietnam

Pursuant to the laws of Vietnam, an employee with an employment contract of one month or more is required to participate in the statutory social insurance scheme, and an employee with an employment contract of three months or more is subject to the statutory health and unemployment insurance. The employer must make its insurance premiums and deduct from the employee’s salary to pay the employee’s insurance premiums on his/her behalf to the insurance funds.

The insurance premium rate the employer is required to contribute to the social insurance fund is 17.5%. The employer is also required to make contributions to the health and unemployment insurance funds at the rates of 3% and 1%, respectively. The total contribution from the employer is 21.5%.

The employer is required to deduct and pay to the statutory insurance funds on behalf of the employees at the rates of 8% for the social insurance, 1.5% for the health insurance and 1% of the unemployment insurance (total: 10.5%).

For expatriate employees, from 1 July 2022, the employer is required to pay at the rates of 17.5 and 3% and deduct and pay on behalf of the employees 8% and 1.5% to social insurance and health insurance respectively.

We note that the salary used to calculate the rates to the social insurance is capped at 20 times the base salary which is announced by the Government from time to time and the salary used to calculate the rates to the social insurance is capped at 20 times the regional minimum wage (which is issued by the Government from time to time).