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:

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.

Disclaimer

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