Update on Vietnam Social Security Scheme for expatriate employees PwC Vietnam NewsBrief

22 January 2016
PwC Vietnam NewsBrief
Update on Vietnam Social Security
Scheme for expatriate employees
Vietnam has three elements to its social security system - social
insurance (“SI”), unemployment insurance (“UI”) and health
insurance (“HI”).
Currently, SI and UI contributions are applicable to Vietnamese
individuals only. HI contributions are required for Vietnamese and
for foreign individuals that are employed under Vietnam labour
contracts (but not those continuing to be employed under their
overseas employment contracts and seconded to Vietnam).
Therefore, if an expatriate employee is employed by an overseas
company and there is no local contract concluded between him/her
and the Vietnam entity, he/she is not subject to compulsory HI
contribution in Vietnam.
The Vietnam Ministry of Labour, Invalids and Social Affairs issued
Circular 59/2015/ TT-BLDTBXH on 29 December 2015 providing
guidance on the implementation of the compulsory SI scheme in the SI
Law and Decree 115/2015/ND-CP.
One of the key changes is that effective 1 January 2018, foreigners
working in Vietnam under a work permit, practicing licence, or
practicing certificate issued by a competent body of Vietnam will be
allowed to participate in the SI scheme.
The use of the word “allowed” is unusual. This would imply that
effective 1 January 2018, expatriate employees can elect to contribute
to Vietnam SI.
The current SI/HI/UI contribution rates are as follows:
PwC
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information
contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness
of the information contained in the publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty or care for any
consequences of you or anyone else acting or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
To get in touch please
contact:
Brittany Chong
Partner
Vietnam Global Mobility Leader
Tel. +84 8 3823 0796
Email:
[email protected]
The salary subject to SI/HI/UI contributions is the salary and
allowances stated in the labour contract, but this is capped at 20
times the minimum salary for SI/HI contributions and 20 times the
minimum regional salary for UI contributions.
At present, the minimum salary cap is VND23,000,000 per month
(approximately USD1,050 per month) and the minimum regional
salary cap varies from VND48,000,000 to VND70,000,000 per
month, depending on each region (approximately USD2,200 –
USD3,200 per month). These minimum salaries are subject to
change during a year.
Currently, statutory employer contributions do not constitute a
taxable benefit to the employee. The employee contributions are
deductible for personal income tax purposes.
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PwC