Salary payment principles
Wages must be paid in full, on time, in cash or by transfer via the employee's personal account. The salary must not be lower than the regional minimum wage prescribed by the Government for each region (regions I, II, III, IV), and businesses must have a clear salary scale and salary table, publicly announced at the workplace.
Salary is the basis for insurance payment
Monthly salary for compulsory social insurance includes job-based salary, salary allowances and other additional payments that can be determined at a specific level and paid regularly in each pay period - excluding bonuses, mid-shift meals, gasoline, telephone, housing, and child care allowances if these amounts are not tied to productivity and work efficiency. This is where many businesses "circumvent" regulations by separating salaries into many non-insurable allowances, posing a potential risk of arrears during inspection.
Current insurance premium rate
The rate of social insurance - health insurance - unemployment insurance contributions calculated on the current insured monthly salary is as follows:
| Closing amount | Business closed | Workers pay |
|---|---|---|
| Social insurance (retirement, sickness, maternity, work accidents) | 17,5% | 8% |
| Health insurance | 3% | 1,5% |
| Unemployment insurance | 1% | 1% |
| Total | 21,5% | 10,5% |
The above rate applies generally to Vietnamese businesses; Some amounts in the portion paid by businesses (such as the labor accident and occupational disease fund) may change according to policies from time to time. Businesses should compare with the local social insurance agency or outsourced payroll service unit to update accurately at the time of application.
Are foreign workers required to participate in insurance?
Foreign workers working in Vietnam under labor contracts of 1 year or more are required to participate in compulsory social insurance (except unemployment insurance) and compulsory health insurance, with the same contribution rate as Vietnamese workers, except for some special amounts.
Why should you use an outsourced payroll service?
Because the insurance contribution rate, the way to determine the insurance base salary and the regional minimum wage can be adjusted in each period, many businesses - especially new FDI enterprises entering the market - choose Nhân Kiệt's outsourced salary calculation service to ensure correct calculation, full payment, and avoid arrears and late payment fines.
How are enterprises handled late in paying social insurance? Enterprises that are slow in paying social insurance must pay the late payment amount and pay late payment interest according to regulations. In addition, they may be administratively sanctioned if the violation persists or there are signs of evasion of payment.
Does the regional minimum wage apply to foreign workers? No. The regional minimum wage is only the floor applicable to Vietnamese workers; Foreign workers often have a separately agreed salary according to the contract, but must still comply with the mandatory insurance obligations mentioned above.