Social Insurance Obligations and Contribution Rates for Vietnamese and Foreign Employees in 2026

Compulsory Insurance Funds (SI, HI, UI) – What Do They Include?

Vietnam’s compulsory social insurance system consists of three main funds managed by the Social Insurance Authority, along with two additional mandatory contributions, as follows:

Main Compulsory Insurance Funds

1. Social Insurance (SI):
   Covers retirement, survivorship, sickness, and maternity benefits — the largest portion of the total contribution.
2. Health Insurance (HI):
   Ensures employees’ access to healthcare and medical treatment.
3. Unemployment Insurance (UI):
   Provides financial support to employees who lose their jobs.

Other Mandatory Contributions

Occupational Accident and Disease Insurance:

Usually included in the employer’s contribution rate (0.5%).

Trade Union Fee:

Employers must contribute 2% of the total salary fund used for social insurance contributions, regardless of whether a trade union is established.
Employees who are union members additionally contribute 1%.

Participants and 2025 Social Insurance Contribution Rates

The contribution rate is calculated based on the employee’s monthly salary used as the basis for social insurance.
Rates are divided between the employer (Company) and the employee (Worker) as follows:

Important Notes on Social Insurance for Foreign Workers

• Foreign employees must participate in compulsory Social Insurance (except Unemployment Insurance) if they:
  • Have a valid work permit, practicing certificate, or license;
  • Sign a labor contract of at least one year; and
  • Have not reached retirement age.
• Foreigners are not required to contribute to Unemployment Insurance (UI).

Salary Base and Contribution Caps

1. What is the Salary Base for Social Insurance?

The monthly salary used as the basis for contributions includes:

• The basic salary stated in the labor contract.
• Fixed allowances (e.g., position or regional allowances).
• Other monetary supplements that can be specifically determined along with the agreed salary.

2. Maximum Contribution Cap (Salary Ceiling):

This is particularly important for enterprises when estimating costs and avoiding back payments during inspections.

Reporting and Penalties for Non-Compliance

Monthly Employee Updates:

Employers must submit reports to add or remove employees in the social insurance system by the end of each month in which changes occur.
This is typically done via electronic platforms such as iBHXH, which help streamline the process.

Penalties for Late or Non-Payment:

• Late Payment Interest:
  Employers must pay interest equal to twice the average investment interest rate of the previous year applied by the Social Insurance Fund.
• Administrative Sanctions:
  Heavy fines under Decree No. 12/2022/NĐ-CP may apply.
• Criminal Liability:
  In serious or repeated violations involving large sums, employers may face criminal prosecution under the Penal Code.