New Updates for Foreign Workers in Vietnam
Businesses and foreign workers in Vietnam need to be aware of the updates to social insurance (SI) contributions in 2022.
From 1 January 2022, foreigners working in Vietnam will need to fully participate in the country’s Social Insurance Programme. This means that employers and foreign employees will see an increase in their contributions to SI.
The changes in the contribution rate will be in 2 phases:
|Timeline||SI Contribution from Employer||SI Contribution from Employee||Total SI Contribution||Salary Base for The Contribution|
|Contribution Rate||From 01 Jan 2022 to 30 June 2022||14%|
(3.5% before Jan 2022)
(No contribution before Jan 2022)
(3.5% before Jan 2022)
|The salary, allowances, and other additional amounts mentioned in the labour contract as prescribed in the labour law|
|From July 01, 2022||14%||3.5%||17.5%|
When is a Foreign Worker Subject to Mandatory Social Insurance Contribution?
When a foreign worker meets the following conditions, they are subject to SI contribution:
- Works in Vietnam with a work permit
- Employed under a Vietnamese labour contract with an indefinite or definite term of one year or more
- Below retirement age (*Note: Retirement age is being gradually raised in Vietnam)
- Not an intra-company transferee
When a foreign worker’s employment in Vietnam expires, they can claim a one-off payment on the contributed amount from the social insurance agency. The following criteria must be met:
- Reached retirement age but has not contributed social insurance for the full 20 years
- Suffering from a fatal disease
- Not living in Vietnam and satisfies the conditions for pension
- The employment contract has been terminated or work permit expires without renewal
Interested in Knowing How the Changes Will Affect Your Business?
For businesses that hire foreign employees in Vietnam, the updates to social insurance contributions will have a direct impact on your operations. If you would like to chat with an expert regarding the updates, please contact us now!
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