1. In which case must foreign workers participate in social insurance?
According to the provisions of Article 2 of Decree 143/ 2018/ ND-CP detailing the Law on Social Insurance and the Law on Occupational Safety and Health regarding compulsory social insurance for employees being foreign citizens working in Vietnam:
- Employees being foreign citizens working in Vietnam are subject to compulsory social insurance when:
+ They possess a work permit or practice certificate or practice license granted by a competent Vietnamese agency;
+ They sign an indefinite-term contract or a contract with a term of at least 1 year with an employer in Vietnam.
- The employees defined in Clause 1 of this Article are not subject to compulsory social insurance prescribed in this Decree if they fall into one of the following cases:
+ They are transferred within an enterprise under Clause 1, Article 3 of the Government’s Decree No. 11/2016/ND-CP of February 3, 2016, detailing a number of articles of the Labor Code regarding foreign workers in Vietnam;
+ They reach the retirement age prescribed in Clause 1, Article 187 of the Labor Code.
2. Social insurance premium
The social insurance premiums of foreign workers are calculated as follows:
Levels and payment methods of social insurance premiums for employees: From January 1, 2022, the employees defined in Clause 1, Article 2 of this Decree shall monthly pay an amount equal to 8% of their monthly salary to the retirement and survivorship allowance fund.
An employee who has neither worked nor received a salary for 14 working days or more in a month is not required to pay social insurance premiums for that month. This period shall not be included in the period eligible for social insurance allowance, except in the case of maternity leave.
Levels and payment methods of social insurance premiums for employers: The employers defined in Clause 3, Article 2 of this Decree shall monthly make payments based on employees’ monthly salary on which social insurance premiums are based, specifically as follows:
+ 3% to the sickness and maternity allowance fund;
+ 14% to the retirement and survivorship allowance fund, from January 1, 2022.
NOTE: In case an employee signs labor contracts with different employers and is subject to compulsory social insurance, the employee and employer shall pay social insurance premiums only for the labor contract signed first. However, the employers shall make payments to the occupational accident or disease insurance fund for every contract signed.
3. Frequently asked questions
1. Can foreign workers who have paid insurance in foreign countries according to the regulations of that country deduct this part of insurance when finalizing tax in Vietnam?
Foreign employees working in Vietnam will be deducted the insurance premiums paid abroad when finalizing personal income tax (“PIT”) on wages and salaries if the following conditions are met:
i. The paid compulsory insurance must be similar to the provisions of Vietnamese law such as social insurance, health insurance, unemployment insurance, compulsory professional liability insurance, and other compulsory insurances (if any);
ii. Proof of participation in the above-mentioned insurance premiums is required.
2. Will foreign workers who voluntarily contribute to the retirement pension fund of Social Insurance for 20 years be entitled to a pension when they reach retirement age according to regulations?
In fact, in case a foreigner voluntarily contributes to the retirement pension fund, the social insurance agency will refuse to collect this amount because the foreign worker is not eligible to participate in voluntary social insurance. Moreover, before January 1, 2022, foreign workers are also not eligible to contribute to the retirement and survivorship fund, but from January 1, 2022, onwards, foreign workers are the subjects to contribute to the retirement and survivorship fund. If the foreign employee fully contributes to the retirement fund for death or survivorship for at least 20 years from January 1, 2022, he/she will be entitled to a pension in accordance with the law.
Please contact us for further assistance:
EZ TOURISM AND INVESTMENT CONSULTING COMPANY LIMITED
Address: No. 42, 26 Nguyen Hong, Lang Ha Ward, Dong Da District, Hanoi City, Vietnam
Phone: 0869 907 519 | 0867 439 725
Email: support@eztour.vn
Website: www.ez-consulting.com.vn/
