Which foreign employees must pay mandatory social insurance?
Under the 2024 Law on Social Insurance (effective 01/07/2025) and its implementing Decree 158/2025/ND-CP, employees who are foreign nationals working in Vietnam are subject to mandatory social insurance when they hold a work permit (or a practice certificate or license issued by a competent Vietnamese authority) and work under a labor contract meeting the conditions in current regulations — currently guided as a contract with a term of at least 12 months.
Some cases are excluded, such as people past the statutory retirement age and employees transferred within the company. Foreign employees are not subject to unemployment insurance. Because specific conditions may be further guided, companies should check current regulations or ask the social insurance agency before applying them to each case.
Penalties for non-payment and late payment
If social insurance is not paid, underpaid or paid late, a company may face:
- Back-payment of the unpaid amount.
- Late-payment interest under the 2024 Social Insurance Law: 0.03%/day on the late amount, counted from the day of delay — there is no longer a "grace period" of under 30 days as before.
- Administrative fines under Decree 12/2022/ND-CP: for late payment, payment at the wrong level or for fewer people than required, fines range from 12% to 15% of the total amount payable at the time the record is drawn up, up to VND 75 million for individuals; fines for organizations are double (up to VND 150 million). Evasion is punished more heavily under the same decree.
Decree 274/2025/ND-CP provides guidance on distinguishing late payment from evasion and on cases with justifiable reasons.
When is it treated as evasion and criminal prosecution?
Under the 2024 Social Insurance Law, failing to pay or underpaying the registered amount 60 days after the latest due date, after being notified by a competent authority, may be treated as evasion. If the evaded amount reaches the threshold in Article 216 of the Criminal Code (VND 50 million or more), the responsible person may face criminal prosecution; commercial legal entities may also be subject to higher fines.
Other risks beyond fines
- Foreign employees do not receive social insurance benefits as provided, which easily leads to complaints.
- Late-payment information is made public, affecting reputation with partners and customers.
What should companies do to avoid risk?
- Review the list of foreign employees: work permits, contract type and term, age.
- Determine the correct salary used as the basis for contributions (contract salary including job-based salary, salary allowances and additional payments with determinable amounts).
- Register and pay on time every month, and track the payment calendar so that no late-payment interest arises.
- Keep supporting records and documents to explain when inspected.
- Consider using an EOR or outsourced payroll service so a dedicated provider handles social insurance records and correct accounting.
This article is for reference and compiled from the legal documents in force at the time of publication; the specific penalty depends on the violation and the decision of the competent authority. Companies should check the original documents or contact the social insurance agency or a legal expert before applying.
Do foreign employees have to pay unemployment insurance? No. Foreign employees are not covered by unemployment insurance; they fall under mandatory social insurance when eligible and take part in health insurance as regulated.
Is interest charged if social insurance is paid 1–2 days late? Yes. From 01/07/2025, late payments accrue interest of 0.03%/day from the day of delay; the former 30-day threshold no longer applies.
Are small businesses penalized less? Fines do not depend on company size but on the violation and the amount payable; for organizations, the fine is double that applied to individuals.