From 1 January 2018, the employees being foreign citizens working in Vietnam will be subject to the compulsory social insurance (“SI”).
Accordingly, pursuant to the Draft Decree expanding the regulations on compulsory SI applicable to the foreign employees to be promulgated by the Government (the “Draft”), the compulsory SI contribution rates imposed on the employer and the foreign employees are set forth as follows:
- Contribution rates imposed on the foreign employees: the employee will pay eight percent (8%) of the monthly salary into the retirement and the survivorship allowance.
- Contribution rates imposed on the employer: The employer will pay eighteen percent (18%) from the monthly salary fund for the employee’s SI contribution as follows: (i) three percent (3%) for the illness and maternity fund; (ii) maximum of one percent (1%) into the labor accidents and the occupational diseases – the specific rates will be regulated by the Government; and (iii) fourteen percent (14%) for the retirement and survivorship allowance.
The foreign employees and the employer will no longer be required to pay the SI in the month when the foreign employees do not work and are not paid the salary of fourteen (14) working days or more. Such period will not be included to enjoy the SI, except for the case where the employees are off to enjoy the maternity regime.