The landscape of social insurance in Vietnam is evolving. A key change arrives with the 2024 Social Insurance Law. This new legislation introduces a significant concept: the reference level. Understanding this change is vital for both employers and employees.

What is the Social Insurance Reference Level?

The reference level (“mức tham chiếu”) is a new monetary standard. It’s designed to determine social insurance contributions. It also affects how benefits are calculated.

Historically, the “base salary” (mức lương cơ sở) was used. But from July 1, 2025, this changes. The government will now use the reference level. This shift aims for greater consistency. It aligns with broader salary reforms.

This transition isn’t random. It’s part of a comprehensive salary reform plan. A major part of this plan is getting rid of the base salary.

New salary tables will emerge instead. These will be based on specific job positions. This means fixed monetary amounts. Relying on the old base salary would be outdated. It ensures fairer calculations for everyone.

How Much Is the Reference Level?

The 2024 Social Insurance Law also defines the reference level’s value. It will be adjusted periodically. These adjustments consider several factors. They include consumer price index increases. Economic growth is also a factor. The state budget and Social Insurance Fund suitability play a role.

If the base salary still exists, the reference level equals it. If the base salary is removed, the reference level won’t be lower. This ensures a minimum standard.

The base salary might remain until after 2026. This depends on new job position frameworks. So, the reference level will likely match the base salary during this time.

As of July 1, 2024, the base salary is 2.34 million VND/month. If this remains unchanged by July 1, 2025, the reference level will initially be 2.34 million VND. This is a temporary calculation.

Impact on Social Insurance Contributions

The reference level will impact various social insurance schemes. Let’s look at the specifics.

For Compulsory Social Insurance:

• Contribution Basis:
  • The minimum contribution equals the reference level.
  • The maximum contribution is 20 times the reference level.
• Specific Employee Groups: Certain Vietnamese citizens can choose their contribution salary. This choice is still linked to the reference level. It must be at least the reference level. It cannot exceed 20 times the reference level.
  • This includes overseas contract workers.
  • It covers spouses of officials abroad.
  • Business household owners are included.
  • Non-salaried enterprise managers are also affected. This includes board members, directors, and supervisors. Also, elected cooperative managers are included.
• Important Note: Once a contribution basis is chosen, it must be maintained for at least 12 months. Only then can it be changed.

For Voluntary Social Insurance:

• Income for Contribution:
  • The minimum income for contribution is the rural poverty line.
  • The maximum income is 20 times the reference level.
• Calculation Point: The contribution level is always calculated at the time of payment.

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