Incomes not subject to social insurance contributions in Vietnam

While working at businesses, there are many incomes that the employee will receive. However, does all of these incomes subjected to social insurance contributions in Vietnam? What are the incomes not subject to social insurance contributions in Vietnam that the employees should be aware of?

The monthly salary used as the basis for payment of compulsory social insurance is also the monthly salary used as the basis for payment of health insurance and unemployment insurance premiums of employees.

Incomes subjected to social insurance contributions in Vietnam

The incomes subjected to social insurance contributions in Vietnam are the salary, salary allowance, and other additional amounts. These types of payments are specified clearly in Clause 5 Article 3 of Circular 10/2020/TT-BLDTBXH.

Salary by job or title

The salary by job or title of the labor contract of the employee is the type of payment subject to social insurance contributions in Vietnam. The time-based salary of the job or title is stated according to the salary scale and salary table developed by the employer in accordance with the provisions of Article 93 of the Labor Code. However, it should be noted that nowadays, most businesses don’t take the actual salary as the basis for social insurance contributions but instead, use the minimum regional salary as the basis.

Salary allowance as agreed by both parties

In some special working environments, the employees might get some salary allowance to compensate for factors on working conditions, job complexity, living conditions, level of labor attraction, etc. These types of payments are also subjected to social insurance contributions in Vietnam as it is a big payment and normally isn’t included or specified in the labor contract.

Other additional amounts as agreed by the two parties

The additional amounts that determine a specific amount along with the salary agreed in the labor contract are also subjected to social insurance contributions in Vietnam, provided that this type of payment is paid regularly in each paying term.

Incomes not subject to social insurance contributions in Vietnam

Based on Article 89 of the 2014 Law on Social Insurance, Article 17 of Decree 115/2015, Article 30 of Circular 59/2015 and Clause 2, Article 6 of Decision 595, the employee’s incomes that are not included in the payment of compulsory social insurance, health insurance, unemployment insurance including: – Bonus as prescribed in Article 104 of the Labor Code; – Initiative bonus; – Mid-shift meal; – Support such as: + Gasoline car; + Telephone; + Commuting; + Housing fee; + Child care money; + Raising children’s fees. – Support when employees: + Having a dead relative; + Having a married relative; + Employee’s birthday. – Allowance for employees in difficult circumstances when experiencing occupational accidents and diseases; – Other allowances and supports are recorded in a separate section in the labor contract according to the provisions of Circular 10/2020/TT-BLDTBXH. ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.