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Compulsory social insurance payment in 2020

2020 is coming and enterprises using Vietnamese and foreign labors shall have much attention in the compulsory social insurance payment.

In accordance with the Decision No. 595/QD-BHXH, insurance contributions in percentage (%) shall be defined in the formula as:

Contribution percentage x the monthly salary for paying social insurance


1. Contribution percentage

- For Vietnamese employees

Contribution on the basis of monthly wage

Percentage of labor’s basis of monthly wage

Percentage of labor’s expenses and costs

Social insurance

8%

17%

Health insurance

1,5%

3%

Unemployment insurance

1%

1%

Occupational accident and occupational disease insurance

-

0,5%

Percentage

10,5%

21,5%

- For foreign labors

Contribution on the basis of monthly wage

Percentage of labor’s basis of monthly wage

Percentage of labor’s expenses and costs

Social insurance

-

3%

Health insurance

1,5%

3%

Unemployment insurance

-

-

Occupational accident and occupational disease insurance

-

0,5%

Percentage

1,5%

6,5%


2. Monthly payment for insurance in 2020:

The monthly payment is agreed by the employers and employees but cannot less than the minimum and higher than maximum level in accordance with the regulations as follows:

- Minimum region-based wages:

Not lower than the minimum region-based wages of a person having a similar job or position under normal working conditions; higher by at least 7% than that of a person having works by vocational training or learning.

From January 01, 2020, the minimum region-based wage in 2020 has increased compared with 2019, therefor the contribution percentage for minimum compulsory insurance payment shall be imposed as follows:

Region

Minimum region-base wage 2020

Monthly wage of social insurance for normal working conditions

Monthly wage of social insurance for person having works by vocational training or learning

Region I

4.420.000

4.420.000

4.729.400

Region II

3.920.000

3.920.000

4.194.400

Region III

3.430.000

3.430.000

3.670.100

Region IV

3.070.000

3.070.000

3.284.900

Note: The salary of a person working under strenuous, toxic or dangerous conditions must be higher by at least 5% than that of a person having a similar job or position under normal working conditions; The salary of a person working under extremely strenuous, toxic or dangerous conditions must be higher by at least 7% than that of a person having a similar job or position under normal working conditions.

- Maximum monthly for insurance

+ For social insurance and health insurance

The maximum salary for social insurance and health insurance is 20 months of basic wages (from July 01, 2020 and the basic wage shall be increased from VND 1,49 million to VND 1,6 million per month).

  • From January 01, 2020: The maximum salary for social insurance = 20 x 1.49 = VND 29.8 million per month.
  • From July 01, 2020: The maximum salary for social insurance = 20 x 1.6 = VND 32 million per month.

+ For unemployment employment

The maximum unemployment insurance shall equal to 20 minimum regional wages.

3. Conclusion

In 2020, the contribution percentage of insurance for employees and employers shall have no changes.

However, when the minimum region-based wage (from January 01, 2020) and the monthly pension increase (from July 01, 2020), the minimum and maximum insurance premium of employees shall accordingly increase.

The employers and employee should note this information to adjust the contribution percentage of insurance payment in accordance with legal regulations.

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