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Increase in Social Insurance Rates for Foreign Employees in Vietnam
Since January 1, 2022, Vietnam has increased the social insurance rates for foreign employees. Foreign employees will have to pay an eight percent rate, while employers contribute 17.5 percent to the social insurance fund.
This will be in line with the same rates as Vietnamese employees.
As with Vietnamese employees, the mandatory social insurance scheme for foreign employees covers sickness, maternity, occupational diseases, accidents, retirement, and death.
The salary subject to social insurance contribution is what is defined as per the labor contract, but this is capped at 20 times the minimum salary for social insurance contributions set by the government. At present, the maximum salary cap for the social insurance contribution is US$1,295 (VND 29 million).
Social insurance was made mandatory for all working foreigners as of December 1, 2018, under Decree 143/2019/ND-CP.
As per the Ministry of Labor, Invalids and Social Affairs (MoLISA), foreign workers are subject to mandatory social insurance when they meet all the following conditions:
Once a foreign worker’s employment in Vietnam expires, the foreign worker can claim a one-off payment on the contributed amount from the social insurance agency in the following circumstances:
Foreign employees should make the allowance request within 30 days before their contract or work permit expires. The insurance authority is required to settle and pay the allowance to the employee within 10 days from the date of receipt.
This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected].
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