Social insurance is a mandatory cost for every employer in Vietnam, and for FDI companies the total contribution burden — including health insurance and unemployment insurance — can represent more than 20% of the payroll base. Getting your payroll compliance right from day one protects your employees, avoids penalties, and ensures you can sponsor work permits and visas without issues.
The Three Components of Social Contributions in Vietnam
Vietnam’s social contribution system comprises three separate funds, each with its own contribution rates and caps:
1. Social Insurance (Bảo Hiểm Xã Hội — BHXH)
Social insurance covers retirement pensions, sickness, maternity, occupational accidents, and survivors’ benefits.
- Employee contribution: 8% of contributory salary
- Employer contribution: 17% of contributory salary (broken down as: 14% retirement/survivors, 3% sickness/maternity)
Note: The occupational accident and disease fund (0.5% in prior law) was suspended from January 2022 under Resolution 68/NQ-CP to reduce costs for employers post-pandemic.
2. Health Insurance (Bảo Hiểm Y Tế — BHYT)
Health insurance covers medical examination and treatment at public healthcare facilities.
- Employee contribution: 1.5% of contributory salary
- Employer contribution: 3% of contributory salary
3. Unemployment Insurance (Bảo Hiểm Thất Nghiệp — BHTN)
Unemployment insurance provides benefits when an employee is made redundant.
- Employee contribution: 1% of contributory salary
- Employer contribution: 1% of contributory salary
Summary of Total Contribution Rates
| Fund | Employee | Employer | Total |
|---|---|---|---|
| Social Insurance (BHXH) | 8% | 17% | 25% |
| Health Insurance (BHYT) | 1.5% | 3% | 4.5% |
| Unemployment Insurance (BHTN) | 1% | 1% | 2% |
| Total | 10.5% | 21% | 31.5% |
The Contributory Salary Cap
Contributions are not calculated on the full salary for higher-paid employees. The contributory salary base is capped at:
- Social Insurance and Health Insurance: 20 times the statutory basic salary (currently VND 2,340,000/month as of July 2024), giving a cap of VND 46,800,000 per month. Note: The basic salary may be updated by the Government in 2026; employers should verify the current cap at the time of calculation.
- Unemployment Insurance: 20 times the regional minimum wage applicable to the company’s location (ranging from VND 4,680,000 to VND 5,588,000 per month depending on region).
For employees earning above these caps, contributions are calculated only on the capped amount — not the full salary.
Who Must Be Enrolled
Mandatory social insurance enrolment applies to all employees working under labour contracts of one month or longer. This includes:
- Vietnamese employees (all contract types ≥ 1 month)
- Foreign employees with work permits, practising certificates, or licences, who have indefinite-term or fixed-term contracts of one year or more in Vietnam (mandatory since December 2018)
Foreign employees are not required to contribute to unemployment insurance.
Payment Deadlines and Process
Employers must pay social contributions to the Vietnam Social Insurance (VSI) agency by the last business day of each month. Contributions are calculated based on the payroll register for that month. A monthly contribution report is submitted simultaneously.
For companies with 10 or fewer employees, quarterly payment is permitted. Late payment incurs an interest charge of 0.03% per day on the outstanding amount.
Social Insurance Books and Cards
Each employee enrolled in social insurance must have a social insurance book (sổ bảo hiểm xã hội) and a health insurance card (thẻ BHYT). FDI companies are responsible for registering new employees with the VSI agency within 30 days of the contract start date and for maintaining accurate employee records.
Common Compliance Issues for FDI Employers
- Under-declaring the contributory salary: Some employers declare only the base salary and exclude allowances that legally form part of the contributory salary. This is a frequent audit finding.
- Late enrolment: Delays in registering new employees can create gaps in their social insurance coverage and expose the company to penalties.
- Incorrect handling of foreign employee contributions: Foreign employees with qualifying contracts must be enrolled; failure to do so can affect their ability to obtain or renew work permits.
Related reading: For a full breakdown of work permit requirements for your foreign staff, see our Vietnam Work Permit Guide 2026.
How TrustlineAX Can Help
TrustlineAX’s payroll and HR compliance team handles monthly payroll processing, social insurance registration, contribution calculations, and VSI reporting for FDI companies. We ensure every employee — Vietnamese and foreign — is correctly enrolled and that your payroll records will stand up to scrutiny during a labour or tax inspection.