Understanding Vietnam’s Social Insurance System

Vietnam’s social insurance system offers a crucial safety net for employees, providing financial support in various circumstances. It’s a mandatory scheme, and employers hold the responsibility of ensuring compliance for their workforce.
Understanding Vietnam's Social Insurance System

Key Components

The system consists of three primary components:

  • Social Insurance:

    • Covers risks associated with:
      • Sickness and Maternity Fund: Provides financial support during illness and maternity leave.
      • Labor Accident and Occupational Disease Fund: Offers compensation for work-related injuries and illnesses.
      • Pension and Survivorship Fund: Provides retirement income and support for surviving dependents of deceased employees.
    • Applies to employees under definite term contracts (over one month) or indefinite term contracts.
  • Health Insurance:

    • Provides coverage for employees’ medical expenses.
    • Applies to employees with labor contracts exceeding a three-month duration (definite term) or indefinite term contracts.
  • Unemployment Insurance:

    • Offers financial assistance to employees who experience job loss.
    • Applies to employees who have labor contracts exceeding three months (definite term) or indefinite term contracts.

Social Insurance Benefits

  • Pension: Employees who reach retirement age as stipulated by the Labor Code 2019 and have paid Social Insurance for 20 years or more will be entitled to a state pension. The amount of the monthly pension depends on the number of years the employee participated in the Social Insurance fund, but not exceeding 75% of the legal average monthly salary.
  • Sick payment support
  • Maternity allowance
  • Work-related injury allowance and occupational disease allowance
  • Funeral payment

Health Insurance Benefits

  • Covers costs of medical examinations, treatment, and prescribed medications at designated healthcare facilities.

Unemployment Insurance Benefits

  • Provides temporary financial support to eligible employees who have lost their jobs.

Contribution Rates

Employers and employees share in making contributions based on a percentage of the employee’s monthly salary. The current rates are:

Insurance Type Employee Contribution Employer Contribution Note
Social Insurance 8% 17.5% Capped at a maximum of 20 times the basic wage
Health Insurance 1.5% 3% Capped at a maximum of 20 times the basic wage
Unemployment Insurance 1% 1% Capped at a maximum of 20 times the basic wage


Responsibilities of Employers

  • Registration: Employers must register their eligible employees for the social insurance system.
  • Contributions: Employers are responsible for calculating, deducting (for employee contributions), and remitting the required social, health, and unemployment insurance payments.
  • Record Keeping: Maintain accurate records of contributions made.

Understanding and adhering to Vietnam’s social insurance laws is a fundamental aspect of operating a business in the country. Compliance demonstrates responsible business practices and contributes to the well-being of employees.


Social insurance regulations can change. Please consult with legal and HR professionals in Vietnam for the most up-to-date guidance.

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