Social insurance in Vietnam serves as a critical safety net, protecting workers and their families in times of need. This government-mandated system ensures financial support during life’s uncertainties, such as illness, work-related injuries, maternity, and retirement. In 2024, Vietnam’s social insurance framework continues to evolve, emphasizing broader coverage and enhanced benefits to adapt to the workforce’s changing needs.
For businesses and workers alike, understanding this system is essential—not only for compliance but also for maximizing its value. This guide delves into Vietnam’s social insurance system, its benefits, and how both compulsory and voluntary participants can navigate the framework effectively.
What is Social Insurance in Vietnam?
Social insurance (Bảo hiểm xã hội – BHXH) is a state-managed system where both employers and employees contribute a portion of the worker’s income to a collective fund. Employers bear the larger financial responsibility, but both parties share the cost.
Social insurance contributions are mandatory for employees under contracts lasting at least one month. For individuals outside formal employment, such as freelancers or farmers, Vietnam offers a voluntary social insurance system. This enables broader access to benefits, particularly for those planning for retirement.
Types of Social Insurance in Vietnam
Social insurance falls into two primary categories:
Compulsory social insurance is mandatory for workers employed under contracts of at least one month. It provides comprehensive coverage, including benefits for sickness, maternity, work accidents, occupational diseases, retirement, and survivor support. Employers must register their employees for this program and contribute on their behalf, while workers contribute a smaller percentage of their salary.
Voluntary social insurance is designed for self-employed individuals or those without formal employment contracts. This optional system mainly focuses on retirement and survivor benefits. Although it offers fewer benefits compared to compulsory insurance (e.g., no maternity or sickness coverage), it provides flexibility in contribution levels and payment schedules.
Social Insurance Benefits in Vietnam
The social insurance system in Vietnam covers five core benefits for participants:
Sickness benefits ensure employees unable to work due to illness are entitled to sick leave and financial support, typically 75% of their average monthly salary. The duration of leave varies based on the illness type and severity.
Maternity benefits provide pregnant workers with six months of fully paid leave, with additional time for multiple births. Support extends to prenatal care, childbirth, and related complications. Male employees may also receive leave to support their spouses during childbirth.
Work-related accident and disease benefits assist workers injured or ill due to their job, covering compensation, paid leave, and medical care. In severe cases, long-term support or lump-sum payments are provided. Dependents receive compensation in the event of the worker’s death.
Retirement benefits ensure monthly pensions for workers meeting contribution and age requirements (62 years for men, 60 for women). Early retirement options exist for hazardous job environments or health-related reasons.
Survivor benefits offer financial support for the family of a deceased worker, covering funeral expenses and providing either monthly or lump-sum allowances based on contributions.
Voluntary Social Insurance: A Flexible Option
While voluntary insurance participants lack access to sickness or maternity benefits, they can secure retirement and survivor benefits. Participants enjoy flexibility in contribution amounts and payment schedules, tailored to their income levels.
How to Register for Social Insurance in Vietnam
For employees, employers handle the registration process by collecting necessary documents, submitting forms to the Vietnam Social Security (VSS) office, and deducting contributions from salaries.
For voluntary participants, self-employed individuals can register at local VSS offices or authorized agents by submitting a social insurance declaration and ID documents and choosing a contribution level and payment plan.
Contribution Rates for 2024
For compulsory social insurance, contributions are split between employers and employees. Employers contribute 17.5% for social insurance, 3% for health insurance, and 1% for unemployment insurance. Employees contribute 8% for social insurance, 1.5% for health insurance, and 1% for unemployment insurance.
For voluntary social insurance, contributions are flexible but must meet minimum thresholds based on the regional minimum wage.
Why Social Insurance Matters
Vietnam’s social insurance system provides a financial cushion for workers while fostering social security. For employers, compliance with social insurance regulations demonstrates commitment to employee well-being. For employees, contributing ensures access to vital benefits, safeguarding their future and that of their families.
The above information is provided by Mys Law. For any questions regarding the content of this article, please contact 0969.361.319 or email: [email protected] for further clarification. Best regards!
Compiler: Nguyen Anh Quan
