Health insurance (“HI”) contributions are required for Vietnamese and foreign individuals that are employed under Vietnam labour contracts.
Unemployment insurance contributions are applicable to Vietnamese individuals only.
Social Insurance (“SI”) – prior to 1 December 2018 -contributions were applicable to Vietnamese individuals only. Generally, effective from 1 December 2018, SI contributions are payable by foreign individuals working in Vietnam under employment contracts with an indefinite term or a definite term of 1 year or more.
Certain foreign employees internally transferred within a group and employees who have reached the statutory retirement age (60 years for males, 55 years for females) are not subject to compulsory SI contributions.
From 1 January 2018, the income subject to SI/ HI/ UI contributions includes salary, certain allowances and other regular payments, but this is capped at 20 times the minimum salary for SI/ HI contributions and 20 times the minimum regional salary for UI contribution effective from 1 July 2018, the minimum salary is VND1,390,000/month. Effective from 1 January 2019, the minimum regional salary varies from VND2,920,000 to VND4,180,000/month – these minimum salaries are subject to change each year.
Statutory employer contributions do not constitute a taxable benefit to the employee. The employee contributions are deductible for PIT
Employees and employers are also encouraged to participate in voluntary pension schemes. Tax deductions for contributions there are allowed for both employees (for PIT purposes) and employers (for CIT purposes), subject to a cap.