Social Insurance in Vietnam (2025): A Comprehensive Guide for Employers & Investors

Understanding social insurance in Vietnam is essential for ensuring labor compliance and avoiding legal risks for both local businesses and foreign investors. As Vietnam continues to attract international investment, employers are required to participate in the country’s mandatory social insurance system, which plays a vital role in workforce management and regulatory compliance.

In this comprehensive 2025 guide, we’ll break down everything employers and foreign investors need to know about social insurance in Vietnam — including who must enroll, how contributions are calculated, the reporting process, key legal obligations, and common compliance pitfalls to avoid.

What is Social Insurance in Vietnam?

Social insurance in Vietnam is a mandatory social security system established by the government to protect employees’ income and health throughout their working life and beyond. Applicable to both local and foreign-invested enterprises, social insurance aims to provide financial support during key life events and reduce the burden on employers and the state.

Under Vietnam’s Law on Social Insurance (No. 58/2014/QH13) and regulations issued by the Vietnam Social Security (VSS), employers are legally required to register and contribute to the social insurance fund on behalf of eligible employees.

The Vietnamese social insurance system offers coverage in the following key areas:

• Sickness and maternity benefits – financial support for employees during temporary illness, pregnancy, or childbirth.

• Work-related accidents and occupational diseases – compensation and healthcare for employees injured or made ill due to job-related causes.

• Retirement (pension) – monthly pension payments for employees who reach retirement age and meet contribution requirements.

• Survivor (death) benefits – financial assistance provided to family members of deceased employees.

Social insurance is one of three core pillars of Vietnam’s social security framework, alongside health insurance and unemployment insurance, and is a key requirement for full labor law compliance in Vietnam.

Who is Required to Participate?

Starting from July 1, 2025, under the amended Social Insurance Law 2024, the scope of compulsory social insurance has been expanded to include:

• Household business owners with business registration.

• Part-time employees under contracts ≥1 month.

• Unpaid managers of enterprises or cooperatives.

• Workers without labor contracts, but under employer control and receiving wages.

This change aims to ensure broader social protection and labor equality across Vietnam’s workforce.

Mandatory Social Insurance Coverage Includes:

• Vietnamese employees who are working under labor contracts with a duration of at least one month, including both definite and indefinite term contracts.

• Foreign employees working in Vietnam under labor contracts of 12 months or more, who also possess a valid work permit, practice certificate, or license as required by law.

Exemptions for Foreign Employees:

Foreign nationals may be exempt from participating in certain social insurance components—specifically the retirement and survivorship schemes—if their home country has signed a bilateral social insurance agreement with Vietnam. These agreements are designed to prevent double contributions and ensure continued benefit coverage across borders.

Employers should consult the latest list of bilateral agreements and assess the employment status of each foreign worker to determine whether exemptions apply.

As of 2025, Vietnam has only signed limited bilateral social insurance agreements (e.g., with South Korea). In most cases, foreign workers are still subject to mandatory social insurance unless exempted.

Social Insurance Contribution Rates (2025)

As of 2025, the total compulsory insurance contribution in Vietnam is:

• For Vietnamese employees:

  • Employer: 21.5% total

    • 14% (retirement and survivorship)

    • 3% (sickness and maternity)

    • 0.5% (occupational accidents/diseases)

    • 1% (unemployment insurance)

    • 3% (health insurance)

  • Employee: 10.5% total

    • 8% (retirement and survivorship)

    • 1% (unemployment insurance)

    • 1.5% (health insurance)

• For foreign employees:

  • Employer: 20.5%

  • Employee: 9.5%
    (Note: foreign workers are not required to contribute to unemployment insurance.)

Contribution Rules & Salary Cap:

• Salary base for contribution is capped at 20 times the basic salary set by the government.

  As of July 1, 2025, the government’s basic salary is set at VND 2.34 million/month.
  Therefore, the salary cap for social insurance contributions is 20 times this base = VND 46.8 million/month.

• Foreign employees are not required to contribute to unemployment insurance, but must still participate in social and health insurance, provided they meet eligibility criteria (e.g. valid work permit and contract ≥12 months).

Employers must calculate contributions based on the employee’s actual monthly salary (within the legal cap), and submit payments monthly to the Vietnam Social Security (VSS).

Monthly Filing and Payment Procedures

To ensure full compliance with Vietnam’s social insurance regulations, employers must follow a standardized monthly process for registering employees, declaring contributions, and making timely payments to the Vietnam Social Security (VSS).

Step 1: Register New Employees with VSS

• Employers are required to register all new employees for social insurance within 30 days of their official start date.

• Registration must be submitted through the Vietnam Social Security system (VSS), either via the eBHXH portal or approved third-party software.

Step 2: Declare Monthly Contributions

Each month, employers must declare social insurance contributions by:

• Submitting Form D02-TS (employee participation list)

• Declaring each employee’s monthly salary base

• Calculating contributions for social insurance, health insurance, and unemployment insurance

• Generating a payment slip via the eBHXH system or authorized software

Note: Accurate salary declaration is crucial, as it directly affects benefit entitlements and contribution amounts.

Step 3: Make Monthly Payments

• Social insurance payments must be made no later than the last day of each month.

• Payments are transferred to the designated VSS account corresponding to the employer’s location.

⚠️ Penalties for Late Payment

• Late payments are subject to financial penalties of up to 0.05% per day on the unpaid amount.

• Repeated non-compliance can lead to audits, fines, and possible suspension of certain business activities.

Annual Reporting and Inspection

In addition to monthly filings, employers in Vietnam are required to complete annual social insurance reporting to ensure transparency and compliance with the Vietnam Social Security (VSS) regulations.

Annual Social Insurance Report

• At the end of each calendar year, employers must prepare and submit a summary report detailing all social insurance contributions made on behalf of their employees.

• The report includes data on contribution amounts, employee participation status, salary bases, and payment timelines.

• This report helps verify that employers have fulfilled their legal obligations under Vietnam’s social insurance law.

VSS Compliance Inspections and Audits

• The Vietnam Social Security authority (VSS) may conduct random or scheduled inspections (audits) to review an employer’s compliance.

• These audits typically assess:

  • Employee registration records

  • Contribution accuracy

  • Payment history and deadlines

  • Any discrepancies between reported and actual salary

• Non-compliance may result in fines, interest charges, or required back payments for underreported contributions.

Staying prepared for VSS inspections and maintaining accurate records throughout the year is essential for avoiding penalties and ensuring full social insurance compliance in Vietnam.

Common Compliance Issues

Many employers in Vietnam—especially newly established or foreign-invested companies—face challenges in staying fully compliant with social insurance regulations. Below are the most frequent social insurance violations that can lead to penalties, back payments, or legal risks:

1. Under-Declaration of Salary

• One of the most common issues is declaring a lower salary base than what employees actually receive.

• This practice may reduce immediate contribution costs, but if discovered during a VSS audit, it can result in:

  • Back payments for the full difference

  • Interest charges

  • Administrative penalties

VSS cross-references salary declarations with labor contracts, tax filings, and bank payroll records.

2. Delayed Employee Registration

• Employers are legally required to register new employees with Vietnam Social Security (VSS) within 30 days of their start date.

• Late registration can trigger:

  • Fines for each violation

  • Retroactive contribution requirements

  • Potential legal exposure for labor law non-compliance

3. Incorrect or Incomplete Reporting

• Errors in monthly or annual filings—such as wrong contract duration, incorrect employee details, or misapplied contribution rates—can:

  • Distort employees’ benefit entitlements

  • Delay claim processing

  • Lead to compliance investigations by VSS

Using certified payroll software and performing regular internal audits can help minimize reporting mistakes.

Solution:

To avoid penalties and ensure full compliance with Vietnam’s social insurance laws, businesses—especially foreign investors and SMEs—should implement the following best practices:

1. Partner with a Licensed HR and Payroll Service Provider

• Engaging a professional HR or payroll outsourcing company in Vietnam can help ensure:

  • Accurate employee registration with Vietnam Social Security (VSS)

  • Timely monthly declarations and payments

  • Compliance with the latest labor and insurance laws

Outsourcing reduces administrative burden and minimizes the risk of costly mistakes.

2. Maintain Complete and Organized Employee Records

• Always keep essential documentation in order, including:

  • Labor contracts (clearly stating wages and duration)

  • Payslips and payroll records

  • Attendance logs and leave records

These documents are crucial during VSS audits or inspections.

3. Conduct Regular Internal Compliance Audits

• Schedule internal audits every 6 to 12 months to verify:

  • Accurate salary declarations

  • Correct application of contribution rates

  • Timely and complete registration of employees

Proactive auditing helps identify and correct issues before they escalate into legal problems.

Can Social Insurance Be Refunded for Foreign Workers?

Yes — foreign employees in Vietnam may be eligible for a one-time lump-sum refund of their social insurance contributions upon termination of employment or permanent departure from Vietnam.

According to current regulations under Vietnam’s Social Insurance Law, foreign workers who have participated in the mandatory social insurance scheme may request a refund from the Vietnam Social Security (VSS) under specific conditions.

Conditions for Social Insurance Refund (2025):

Under Decree No. 143/2018/NĐ-CP, foreign employees participating in Vietnam’s mandatory social insurance system are entitled to a one-time lump-sum refund of their contributions if they meet any one of the following conditions:

• Their employment contract has ended and they do not renew or continue working in Vietnam
• Their work permit or practice certificate has expired and is not renewed
• They reach retirement age but have not contributed for the minimum 20 years required to receive a pension
• They are diagnosed with a serious or life-threatening illness
• They permanently leave Vietnam and do not plan to return for employment

Refund Scope:

• The refund applies only to the social insurance portion of contributions.

• It does not include health insurance or unemployment insurance.

• The refund is calculated based on:

  • The employee’s share of contributions

  • Plus any applicable interest or adjustment rate determined by the Vietnam Social Security (VSS).

How to Apply:

Foreign workers must submit an official application to VSS along with:

• Proof of work permit or contract termination

• Passport

• Exit documents or confirmation of departure (if applicable)

As of 2025, Vietnam has not signed bilateral social insurance agreements with most countries. Employers should check VSS updates for the latest list of applicable agreements.

Penalties for Non-Compliance

Failure to comply with Vietnam’s social insurance obligations can lead to significant administrative fines, interest on late payments, and even criminal liability in severe cases. Below is an overview of the most common violations and corresponding penalties as stipulated by Vietnamese law.

Violation	Penalty
Late registration or delayed contribution	Fine ranging from VND 500,000 to VND 150 million, depending on the number of employees affected and length of delay
Failure to pay social insurance contributions	Employer is subject to back payment of full arrears, plus interest charges and administrative fines
Providing false or misleading information to VSS	Fine of up to VND 50 million; in serious cases, may result in criminal prosecution under Vietnamese Penal Code

Legal basis: Decree No. 12/2022/NĐ-CP on administrative sanctions in labor, social insurance, and sending Vietnamese workers abroad under contracts.

Note: The Vietnam Social Security (VSS) authority conducts periodic inspections and audits. Violations discovered during these audits may lead to retroactive enforcement and legal consequences.

Why Social Insurance Compliance Matters

Complying with social insurance regulations in Vietnam is not just a legal requirement—it also offers long-term benefits for business sustainability, employee trust, and foreign investment readiness.

1. Legal Protection and Risk Mitigation

• Ensuring full compliance with Vietnam’s social insurance laws helps businesses:

  • Avoid government fines, penalties, and interest charges

  • Prevent legal disputes with employees over unpaid benefits or registrations

  • Maintain a clean compliance record with Vietnam Social Security (VSS)

2. Strengthen Employee Trust and Retention

• Timely and accurate social insurance contributions improve employee satisfaction by:

  • Guaranteeing access to benefits like healthcare, maternity, retirement, and sick leave

  • Demonstrating the company’s commitment to lawful and ethical employment practices

  • Enhancing talent retention in competitive labor markets

3. Support Foreign Investment and Corporate Governance

• A compliant HR and payroll system is crucial for:

  • Passing due diligence during M&A or investment processes

  • Meeting standards required for foreign-owned enterprises (FOEs) in Vietnam

  • Building positive relationships with local authorities and regulators

In today’s regulatory environment, labor law and social insurance compliance is a strategic asset—not just an administrative task.

Need Help with Social Insurance in Vietnam?

At Green NRJ, we specialize in helping local and foreign businesses navigate HR, payroll, and compliance obligations in Vietnam. Our services include:

• Monthly registration and declarations
• Payroll processing and contribution calculation
• Labor contract and PIT advisory
• Representation during VSS audits

Contact Green NRJ today to simplify your workforce compliance in Vietnam.