Social insurance and other insurance rates update in Vietnam from July 2021

Compulsory contribution of social insurance and other insurance types from July 2021

1. The contribution rate of compulsory social insurance, unemployment insurance and health insurance according to regulations:

The compulsory social insurance contribution rate is calculated on the basis of the employee's monthly salary. This includes contributions to the pension and death fund; sickness and maternity fund; labor accident and occupational disease fund (according to Article 85, Article 86 of the Social Insurance Law and Decree No. 58/2020/ND-CP).

Of which, the monthly salary on which social insurance is calculated is maximum 20 basic monthly salary (equivalent to 29.8 million VND).

(The basic salary in 2021 is currently 1.49 million VND/month)

a. Accident insurance contribution

The employee's accident insurance contribution rate is equal to 1% of the monthly salary, and employers’ contribution rate is at 1% of the monthly salary of the employees participating in accident insurance contribution (in Article 14 of Decision 595/QD-BHXH).

Of which, the maximum salary of employee:

- According to the salary regime prescribed by the State:

Maximum salary = 20 basic monthly salary = 29.8 million VND/month

- According to the salary regime decided by employer:

Maximum salary = 20 months of regional minimum salary

b. Health insurance contribution

According to Article 18 of Decision No. 595/QD-BHXH, the monthly contribution of health insurance rate is 4.5% of the monthly salary, of which the employers contribute 3% and the employees contribute 1.5%.

The monthly salary for health insurance is maximum 20 monthly basic salary = 29.8 million VND.

2. Adjustment of compulsory social insurance, health insurance and unemployment insurance contribution from July 1^st, 2021

Recently, the Government has issued Resolution No.68/NQ-CP dated July 1^st, 2021, regulating policies to support employees and employers facing difficulties during COVID-19 pandemic. Accordingly, the insurance contributions to the labor accident and occupational disease fund and the pension and death fund will be reduced or temporarily suspended. Specifically:

- Reduce the contribution of labor accidents and occupational diseases:

+ Contribute 0% of salary fund as the basis for social insurance contribution: From July 1^st, 2021 to June 30^th, 2022.

+ Not applicable to cadres, civil servants, public employees, armed forces, employees who receive salary from the State budget.

+ The entire amount of money reduced by the enterprise is used to support workers in the prevention and control of the Covid-19 pandemic.

- Suspend contribution to the pension and death fund:

+ Enterprises that have contributed full social insurance or are temporarily suspending contributions to the pension and death fund by the end of April 2021, affected by Covid-19, reducing by 15% or more of employees participating in social insurance compared to April 2021: can suspend for 06 months contribution from the time of application submission.

+ The suspension of contribution of the pension and death fund has been settled down previously due to Covid-19, if eligible, it will still be resolved again but the total period of suspension does not exceed 12 months.