Vietnam expands social insurance to cover household business owners

The minimum monthly contribution stands at $22.42.

Vietnam’s 2024 Social Insurance Law will come into effect on 1 July, expanding the scope of mandatory social insurance to include household business owners—previously excluded under the 2014 legislation.

Under Clause 1, Article 2 of the updated law, individuals who operate household businesses must participate in the compulsory social insurance scheme, subject to government regulations. 

The previous framework states that enrolling was on a voluntary basis only.

According to Article 33 of the new law, household business owners must contribute 3% of their declared salary to the sickness and maternity fund and 22% to the pension and survivorship fund, totalling a 25% monthly contribution.

The contribution base, as outlined in Article 31, allows business owners to set their own salary level for social insurance purposes, ranging from one to twenty times a reference level. 

Currently, that reference level is the statutory base salary of $90 (VND2.34m) per month. As such, the minimum monthly contribution stands at $22.42 (VND585,000).

The law also offers flexible payment options, allowing contributors to remit premiums monthly, quarterly, or biannually. 

The reference level for contributions will remain tied to the statutory base salary until such time as that pay rate is annulled, at which point a new floor will be established, not lower than the previous rate.

($1.00 = VND26,093.99)