As of January 1, 2018, Employees who are foreign citizens working in Vietnam (hereinafter referred to as foreign workers) have a work permit or a practice certificate; or a practicing license issued by a competent authority. Vietnamese competent authorities has right to participate in the compulsory social insurance prescribed by the Government. So, how much is the social insurance premium that foreign workers have to pay ? LSX Law Firm would like to guide how to calculate the compulsory Social insurance premiums of foreign workers in Viet Nam as follows.
Decision No. 595/QD-BHXH
Compulsory social insurance schemes for foreign workers
Accordingly Decree 143/2018/ND-CP, foreign workers working in Vietnam when participating in compulsory social insurance has right to the following regimes:
- Occupational accident and occupational disease insurance
- Pension regime
- Death mode
For foreign workers
Accordingly the provisions of Article 11 of the draft decree detailing; and guiding the implementation of the law on compulsory social insurance for foreign employees working in Vietnam, then:
First, the employees specified in Clause 1, Article 2 of this Decree shall pay 8% of their monthly salary to the retirement; and survivorship fund every month.
Second, employees who do not work and do not receive wages for 14 working days or more in a month shall not pay social insurance premiums for that month. This time is not counted to enjoy social insurance; except in case of taking maternity leave.
Thus, the foreign worker must pay 8% of the monthly salary to the retirement; and survivorship fund.
For the employer
Pursuant to Article 12 of the draft decree detailing; and guiding the implementation of the law on compulsory social insurance for foreign national employees working in Vietnam:
Employer’s payment rate; and payment method The employer specified in Clause 2, Article 2 of this Decree; shall make monthly contributions to the employee’s monthly salary on which social insurance premiums are based as follows:
Firstly, 3% to the sickness and maternity fund;
Secondly, a maximum of 1% to the labor accident and occupational disease fund; the specific level; prescribed by the Government;
Lastly, 14% to the retirement and survivorship fund. Employers don’t have to pay social insurance premiums for employees
Accordingly, the employer must pay up to 17.5% of the employee’s monthly salary fund on which social insurance premiums are based, including: 3% to the maternity sickness fund; 14% to the retirement and survivorship fund; 0.5% to the fund for occupational accidents and diseases; accordingly Clause 1, Article 22 of Decision No. 595/QD-BHXH.
Thus, the total compulsory social insurance contribution rate of foreign workers is 25.5%; including the following regimes: Sickness and maternity regime; retirement and survivorship regimes; accident and occupational disease regime.
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If only one or some employees are not allowed to pay the enterprise; will be fined 12-15% total amount to be paid. Besides, If all employees are not paid; the enterprise will have to pay a fine of 18 – 20% of the total amount. But the maximum is not more than 75 million for both cases.
The responsibility to pay insurance premiums for employees does not depend on the number of employees; which depends on the nature of the employment contract. Accordingly, if certain conditions are met; enterprises are obliged to pay insurance for employees; and will be penalized if there is an act of evasion; or delay in paying insurance premiums for employees.
Pursuant to Clause 2, Article 1 of the Law on Consolidated Health Insurance; the scope of application of the Law include individuals; and organizations in Vietnam; regardless of Vietnamese or foreign nationals.
Thus, Vietnamese and foreigners participate in the same health insurance.