Residents in Hưng Yên Province visit the local social security agency for administrative procedures. — VNA/VNS Photo Đinh Văn Nhiều

HÀ NỘI — Việt Nam Social Security (VSS) has proposed adjusting income categories not subjected to social insurance contributions.

This proposal is among the agency’s recommendations on the draft guideline detailing the implementation of the 2024 Law on Social Insurance. 

The VSS believed that detailing the incomes excluded from the calculation of social insurance contributions would help better implement the new law, as businesses currently have various types of employee allowances.

These additional payments include bonuses, allowances for meals, transportation, phone, travel and accommodation, alongside childcare support, financial assistance in the event of family funeral, marriage, or birthday celebrations and support for employees in difficult circumstances due to occupational diseases or accidents. 

According to the 2024 Social Insurance Law, effective on July 1 this year, the mandatory social insurance contribution rate is 30 per cent for foreign workers and 32 per cent for Vietnamese workers. 

For foreign workers, the contribution is divided as 9.5 per cent from the employee and 20.5 per cent from their employer. These figures for Vietnamese workers are respectively 10.5 per cent and 21.5 per cent. 

Social insurance covers pension, sickness and maternity schemes, labour accident and occupational disease schemes, as well as unemployment insurance and health insurance. 

According to regulations, the salary used to determine mandatory social insurance contributions must not be lower than the regional minimum wage at the time of calculation, as applied to workers performing basic tasks or roles under normal working conditions.

The regional minimum wages for social insurance contributions in 2025 will be determined according to the Government’s Decree 74/2024/NĐ-CP.

When the revised Social Insurance Law comes into force on July 1, the highest salary level applicable to mandatory social insurance contributions is VNĐ46.8 million (US$1,830), which is calculated by multiplying the basic reference salary (VNĐ2.34 million or $92) by 20. 

The VSS explains that this contribution cap aims to ensure equality, as managerial positions in FDI (foreign direct investment) companies can earn from VNĐ200-300 million ($7,830-11,750) per month.

Therefore, without a regulation on the contribution cap, they would receive very high pensions upon retirement, resulting in a significant gap between pensioners.

Labour expert Phạm Minh Huân stated that this regulation aims to create a balance with little difference between pensioners. A person can still receive a high pension if they participate in the social insurance scheme at the maximum level for a long time.

For a higher pension, they can choose to participate in the supplementary voluntary pension insurance. — VNS