Vietnam Social, Health and Unemployment Insurance in 2019

                                                                                      Source: ketoantienluong.vn

Summary of the insurance contribution

Each month, the Employer deducts 10.5% from the Employee’s gross monthly salary and an additional 21.5% of the Employee’s gross monthly salary to pay for social insurance, health insurance and unemployment insurance funds.

Specifically, social insurance is allocated as the following:

  • Social insurance paid by enterprises: 17,5% ( sick accident and maternity (3%), labor accident fund (0.5%), retirement and death benefit (14%).
  • Social insurance paid by employees: 8% for retirement and death benefit.

( Following Article 6 of Decision 595/QD-BHXH 14/4/2017 )

Here is a simple example:

Ms. Chi works as an accountant in ABC company. Her monthly gross wage is 5,000,000 VND ( ≈214.59 USD).

Employee’s side:

Social insurance: 5,000,000 x 8% = 400,000 VND

Health insurance: 5,000,000 x 1.5% = 75,000 VND

Unemployment insurance: 5,000,000 x 1% = 50,000 VND

Employer’s side:

Social insurance: 5,000,000 x 17.5% = 875,000 VND

Health insurance: 5,000,000 x 3% = 150,000 VND

Unemployment insurance: 5,000,000 x 1% = 50,000 VND

Ms Chi’s gross wage to net wage

Gross Wage5,000,000
Social Insurance-400,000
Health Insurance-75,000
Unemployment Insurance-50,000
Net Wage4,475,000

ABC company’s expenditure

Gross Wage5,000,000
Social Insurance875,000
Health Insurance150,000
Unemployment Insurance50,000
Total6,075,000

Payment terms

  • From 1st January 2019 onwards, monthly wage that is deducted to pay for social insurance must include wage level, salary allowance and the other extra terms.
  • The lowest monthly wage amount that is paid for social insurance and health insurance is the region minimum wage at the paying time; and the highest monthly wage extent is 20 times more than the base salary.
  • The lowest monthly wage amount that is paid for unemployment insurance is the region minimum wage at the paying time; and the highest monthly wage extent is 20 times more than the region minimum wage.
  • From 1st July 2019 onward, the base salary will increase from 1,390,000 VND to 1,490,000 VND ( about 59.9 USD to 64.23 USD ).

The comparison of region minimum wage between 2018 and 2019

Source: ketoantienluong.vn

Insurance cap

For social insurance and health insurance

Lowest monthly salary = region minimum wage

Highest monthly wage = 20 x Base salary ( applied until 30th June 2019 ) = 20 x 1,390,000 = 27,800,000 VND

Highest monthly wage = 20 x Base salary ( applied from 1st July 2019 ) = 20 x 1,490,000 = 29,800,000 VND

For unemployment insurance

Lowest monthly salary = region minimum wage

Highest monthly wage = 20 x 4,180,000 ( Ho Chi Minh city is in region I ) = 83,600,000 VND

Insurance Application Procedure

Every Month, and specifically, no later than the last day of each month, the company deducts a percentage from the Employee’s gross monthly salary fees and an additional from the Social Insurance Fund of the company to transfer simultaneously and directly to the Social Insurance Office account registered at the Vietnam State Treasury.

For those companies that register for Social Insurance for the first time, after filling in the Social Insurance Registration form, a call from the Social Insurance Office via hotline will be made to send the Unit Code to the company within 2 days.

When the company receives the Unit Code, it must immediately transfer the fees to the Social Insurance Office account at the bank.

( Following the Decision 595/QD-BHXH )

Finding all these steps and processes complicated? Email us at hello@9cv9offshoring.tech to let us help you take care of all your Vietnamese Payroll and Social Insurance matters.

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