Vietnam’s social security system is a mandatory, state-managed framework that provides financial protection against key life risks — including illness, maternity, unemployment, and retirement. Overseen by Vietnam Social Security (VSS), it encompasses three core components: social insurance, health insurance, and unemployment insurance.
For both local and foreign employees, participating in this system is a legal requirement under most labour contracts. Employers are obligated to register their staff and make regular contributions, with non-compliance subject to penalties. For foreign companies operating in Vietnam, understanding how social insurance works — and how recent reforms affect contribution rates and eligibility — is essential to remaining compliant and supporting workforce wellbeing.
This guide explains the structure of Vietnam’s social security system, outlines current contribution rates for local and foreign workers, and breaks down key legal updates taking effect from July 2025.
Components of Social Security
To provide a clearer overview of Vietnam’s social security framework, the following table outlines the three core types of insurance under the system. Each serves a distinct purpose and involves specific participants and funding arrangements. Understanding these categories can help foreign firms and individuals navigate their obligations and entitlements more effectively.
Summary of Social Security Components in Vietnam
| Insurance Type | Main Benefits | Participants | Funding Source |
|---|---|---|---|
| Social Insurance | Retirement, sickness, maternity, accidents | Employees, employers | Employer & employee contributions |
| Health Insurance | Outpatient & inpatient treatment, medications | Entire population (compulsory or voluntary) | Employer, employee & government (for some groups) |
| Unemployment Insurance | Job loss benefits, vocational training | Employees with labour contracts | Employer & employee contributions |
Social Insurance
Vietnam’s social insurance system is divided into two types: compulsory and voluntary.
Compulsory social insurance is required for employees under standard labour contracts, while voluntary social insurance allows individuals not under formal employment contracts—such as freelancers or informal workers—to participate and contribute toward retirement and survivorship benefits.
- Coverage: Provides benefits for retirement pensions, sickness, maternity, and occupational hazards, ensuring financial support during various life stages and circumstances.
- Contribution Structure: Funded by contributions from both employers and employees. Employers typically contribute a larger percentage, while employees contribute a smaller portion of their monthly salary.
- Benefits and Eligibility Criteria: Eligibility depends on meeting specific contribution periods and conditions. Benefits include monthly pensions, medical leave compensation, and financial support for workplace accidents or occupational diseases.
Health Insurance
- Purpose: Aims to ensure equitable access to essential healthcare services at reduced costs, contributing to improved public health and well-being.
- Scope of Coverage: Includes outpatient and inpatient care, chronic disease management, maternity services, and preventive healthcare measures like vaccinations and regular check-ups.
- Contribution and Subsidy Structure: Contributions are shared between employers and employees, with government subsidies provided for vulnerable groups such as children, the elderly, and low-income households to ensure broader coverage.
Unemployment Insurance
- Support for Unemployed Individuals: Provides financial assistance to workers who have lost their jobs, helping them maintain a basic standard of living during their transition to new employment.
- Eligibility and Duration of Benefits: Benefits are available to those who meet specific contribution requirements and have registered with employment services. The duration of benefits varies based on the length of prior contributions.
- Role in Workforce Stability: Helps stabilise the workforce by providing income support and job-seeking assistance, contributing to economic resilience and social stability.
Legal Framework and Regulations
Key Laws Governing Social Security: The main legal documents include the Law on Social Insurance, the Law on Health Insurance, and various decrees that provide detailed guidelines on implementation and management.
Contribution Rates, Benefit Calculations, and Administrative Processes: The laws outline the specific contribution rates for different types of insurance, methods for calculating benefits, and procedures for claims and fund management. These regulations ensure transparency and consistency in the administration of social security.
Recent Amendments and Reforms: Updates to the legal framework aim to expand coverage, improve benefit adequacy, and enhance the efficiency of service delivery. Recent changes include adjustments to retirement ages, benefit levels, and expanded coverage for informal sector workers and rural populations.
Social security for workers in Vietnam
The law outlines a number of key obligations of employers and employees regarding contributions and the rights of workers to access benefits. In particular, employers are required to register their employees for social insurance and make regular contributions on behalf of their workforce. Failure to comply with these obligations can result in penalties and legal consequences.
It’s worth noting that foreign employees with a labour contract of more than one year are subject to compulsory social insurance contributions, excluding unemployment insurance. This requirement was introduced under Decree 143/2018/ND-CP and applies to foreign nationals working in Vietnam under work permits, practising certificates, or practising licences.
Employers that fail to register their employees or delay social insurance contributions may face fines, back payments, and late payment interest under Decree 12/2022/ND-CP. In severe cases, criminal charges may apply for intentionally evading social insurance responsibilities.
Compulsory social security contributions
| Local Employee | Foreign Employee | |||
| Type | Employer | Employee | Employer | Employee |
| Retirement | 14.00% | 8.00% | 14.00% | 8.00% |
| Sick/Maternity | 3.00% | 0.00% | 3.00% | 0.00% |
| Occupational | 0.50% | 0.00% | 0.50% | 0.00% |
| Health Insurance | 3.00% | 1.50% | 3.00% | 1.50% |
| Unemployment Insurance | 1.00% | 1.00% | 0.00% | 0.00% |
| Total | 21.50% | 10.50% | 20.50% | 9.50% |
Recent Reforms and Initiatives
Recent reforms in Vietnam’s social security system include significant updates outlined in the Law on Social Insurance 2024, effective from July 1, 2025. One of the key changes is the reduction of the minimum contribution period required for voluntary social insurance participants to qualify for a retirement pension, lowered from 20 years to 15 years. This amendment aims to make retirement benefits more accessible to a broader segment of the population, particularly those in informal employment or with irregular work histories.
Additionally, there have been adjustments to the social insurance contribution rates following an increase in the base salary to 1,800,000 VND per month, effective from July 1, 2023.
The base salary, also referred to as the statutory salary or minimum salary for contribution purposes, is used to calculate contributions to the social insurance, health insurance, and other funds. It is periodically adjusted by the government and forms the basis for both benefit levels and contribution caps.
The new rates apply to both employers and employees, affecting the retirement and survivorship allowance funds, as well as the occupational accident and disease fund. These changes are part of broader efforts to ensure the financial stability of social security funds while expanding coverage and benefits.
Despite reforms, coverage in the informal sector remains a challenge. Many informal workers are unaware of or unable to afford voluntary contributions. Expanding participation in voluntary social insurance remains a government priority, supported by awareness campaigns and proposed subsidies.
FAQ
1. Is social insurance mandatory for foreign employees in Vietnam?
Yes. Foreign employees with a labour contract of 12 months or more are required to contribute to Vietnam’s social insurance system, except for unemployment insurance.
2. What types of insurance are included in Vietnam’s social security system?
The system includes social insurance (retirement, sickness, maternity), health insurance (medical care), and unemployment insurance (for local workers only).
3. Who is responsible for making social insurance contributions?
Both employers and employees contribute. Employers generally cover a larger share, with rates varying by insurance type and employee nationality.
4. What are the penalties for failing to register employees?
Fines, late payment interest, and retroactive contributions may apply under Decree 12/2022. In serious cases, criminal charges may be pursued.
5. Are voluntary social insurance options available for informal workers?
Yes. Individuals not covered under compulsory schemes can join voluntary social insurance to access retirement and survivorship benefits, with reduced contribution periods under the 2024 reform.
What’s next?
Social security in Vietnam is a comprehensive system designed to provide financial support and protection to individuals and families against life’s uncertainties, such as illness, unemployment, and old age.
There is, however, still room to improve and strengthen the current social security apparatus in Vietnam and updates are incrementally being made. With this in mind, foreign firms doing business in Vietnam should make sure to keep up with the latest developments by subscribing to the-shiv.
First published September 27, 2024. Last updated March 31, 2025.