Article by Ms. Ho Nguyen Anh Thu - Junior Associate and reviewed by Ms. Le Thi Khanh Hoan - Partner | Head of Employment, Regulatory & Compliance, Indochine Counsel
Latest Changes in Vietnam's Social Insurance Laws 2024
Starting 1 July 2025, Vietnam’s Social Insurance Law (LSI 2024) will come into force, bringing significant updates for both employees and enterprises. LSI 2024 expands employees’ rights and benefits, while also clarifying the responsibilities of enterprises in making contributions and managing compliance. To support this transition, the Government has issued Decree 158/2025/ND-CP, which provides practical instructions for implementation and is expected to help enterprises adapt smoothly while effectively protecting employee rights.
1. Clarify Social Insurance Obligations for Non-Salaried Managers
Managers who do not receive a salary, including directors, CEOs, board members, and cooperative managers, are now required to participate in compulsory social insurance. They may choose their own monthly contribution base, provided that it is not lower than the statutory reference level and does not exceed 20 times that level. During the period before the base salary is abolished, the statutory reference level remains tied to the current base salary of 2.34 million VND per month. Accordingly, the minimum contribution is set at 2.34 million VND per month, while the maximum contribution is capped at 46.8 million VND per month.
To avoid duplication of contributions, LSI 2024 also sets priority rules for managers who work at multiple enterprises or also receive a salary elsewhere:
- Non-salaried managers who are also employees under a labor contract contribute to the enterprise where the contract exists.
- Non-salaried managers who are also salaried managers contribute to the enterprise where they receive a salary.
- Non-salaried managers working at multiple enterprises contribute to the first enterprise they manage.
- Salaried managers working at multiple enterprises contribute to the first enterprise they manage.
2. Employees Excluded from Compulsory Social Insurance
Decree 158/2025/ND-CP clarifies certain groups exempt from compulsory social insurance participation, including:
- Part-time employees earning wages below the statutory minimum contribution base.
- Employees working under probationary contracts in accordance with labor laws.
- Individuals are already receiving social insurance allowances or monthly benefits under the LSI 2024.
These clarifications are expected to help enterprises and employees better understand their rights and obligations, ensuring smoother compliance with Vietnam’s evolving social insurance regime.
3. Salary Basis for Contributions
Under the LSI 2024, for employees whose pay is determined by the employer, the monthly salary used as the basis for compulsory social insurance contributions includes the salary for the job or position, salary allowances, and other regularly and consistently paid additional amounts.
One-off benefits or other allowances listed separately in the labor contract, as specified in Clause 5, Article 3 of Circular 10/2020 by the Minister of Labor, Invalids and Social Affairs (now under the Ministry of Home Affairs), such as performance bonuses, meal allowances, transportation or fuel support, phone allowances, or housing support, are not considered part of the salary for calculating compulsory social insurance contributions.
4. New “Reference Level” Replaces Base Salary
A major change under the LSI 2024 is the replacement of the fixed “base salary” with a more flexible “reference level”. The reference level determined annually by the Government will reflect economic conditions, including the consumer price index, GDP growth, and the financial capacity of the state budget and the social insurance fund. This change aims to create a more sustainable and responsive contribution system.
5. Employer Obligations and Enforcement
LSI 2024 also strengthens compliance measures, drawing a sharper line between late payments and intentional evasion of social insurance contributions. Employers who fail to make a timely contribution must pay both the outstanding amount and a daily penalty of 0.03% of the outstanding amount. Those found evading payments may face more severe consequences, ranging from administrative penalties and criminal liability to exclusion from government commendations. Importantly, the employers may also be held financially responsible for compensating employees for any damage resulting from non-compliance. Enterprises are encouraged to review payroll processes, ensure timely contributions, and maintain accurate records to minimize risks under the stricter enforcement regime.
6. Practical Considerations for Enterprises
The updates under LSI 2024 provide a clearer and more comprehensive framework for social insurance in Vietnam, but compliance will require careful planning from employers. To implement the LSI 2024 effectively, enterprises should:
- Identify all eligible participants, including both employees and managers who must be covered under compulsory social insurance.
- Verify salary bases and contribution rates for each participant to ensure calculations are accurate and consistent with statutory requirements.
- Monitor participation across multiple enterprises, particularly for managers or employees holding more than one position, to avoid duplication of contributions.
- Keep updated with official guidance issued by social insurance authorities to respond promptly to new regulations or clarifications.
By adopting these measures, enterprises not only strengthen compliance but also safeguard employee benefits and build organizational trust. Proactive implementation further minimizes the risk of penalties, supports workforce stability, and contributes to long-term operational efficiency.
For more information, visit Indochine Counsel at https://indochinecounsel.com/vi/