The Ministry of Labor, War Invalids and Social Affairs proposes to regulate the salary as the basis for compulsory social insurance contributions for employees subject to the salary regime decided by the employer. Based on the salary regulations of the labor law (monthly salary), to determine the amounts (salary, salary allowances, other supplements) subject to compulsory social insurance contributions.

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If the social insurance contribution rate is based on actual income, the pension of workers when they retire will also increase accordingly. Illustration: Le Anh Dung.

In which, the salary according to the job or position is calculated according to the time (by month) of the job, or the position according to the salary scale, salary table built by the employer, according to the provisions of Article 93 of the Labor Code agreed upon in the labor contract.

Salary allowances to compensate for factors related to working conditions, complexity of work, living conditions, and labor attraction that are not taken into account or not fully taken into account in the salary level, are agreed upon in the labor contract; not including salary allowances that depend on or fluctuate according to labor productivity, work process, and quality of work performance of the employee.

Other additional amounts are determined by a specific amount of money together with the salary, agreed upon in the labor contract and paid regularly and stably in each pay period; do not include other additional amounts that depend on or fluctuate according to the employee's labor productivity, work process and quality of work performance.

Non-professional workers at commune level including social insurance contribution allowance

Regarding the salary used as the basis for compulsory social insurance contributions for part-time workers at the commune, village, and residential group levels, the draft stipulates that it is the monthly allowance they receive.

In case the monthly allowance of a part-time worker at the commune, village or residential group level is lower than the lowest salary used as the basis for compulsory social insurance payment, the salary used as the basis for compulsory social insurance payment shall be equal to the lowest salary used as the basis for compulsory social insurance payment.

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Commune-level officials are included in allowances for social insurance contributions. Illustrative photo.

According to current regulations, the salary used as the basis for social insurance contributions for part-time workers at the commune level is the basic salary.

However, currently, part-time workers at the commune, village and residential group levels are entitled to an allowance allocated by the central state budget to localities, at a level equal to 1.5 - 2 times the basic salary.

Therefore, in the draft Decree, the Ministry of Labor, Invalids and Social Affairs proposes to stipulate that the salary used as the basis for compulsory social insurance contributions for part-time workers at the commune, village and residential group levels is the monthly allowance.

Increase social insurance contribution for old age pension enough to live on

An expert in the field of labor and wages said that increasing the social insurance contribution rate of employees when calculating the salary based on job or position, salary allowances and other supplements will increase the salary used as the basis for social insurance contribution.

The 2024 Social Insurance Law is aiming for the salary used to pay social insurance to be calculated over the entire process, so when the salary used as the basis for social insurance payment is high, the employee will receive a higher pension when they are old. This is an important condition for employees to stabilize their lives when they retire, contributing to ensuring social security.

“Vietnam is considered to have one of the highest pension rates in the world, with 75% of the salary used as the basis for social insurance contributions. However, because the salary used as the basis for social insurance contributions is too low, the benefits are not high. Increasing the social insurance contribution based on actual income will significantly improve the benefits for workers when they retire,” said the labor and salary expert.

However, he also noted that increasing the contribution level needs to be calculated specifically so as not to become a burden for businesses. Because the majority of domestic businesses are small and medium-sized enterprises, if the contribution level is too high, businesses will not have the savings to expand production scale, increase the application of science and technology to increase labor productivity...

Regulations on social insurance contributions for employees paid in foreign currency

In addition, the draft Decree stipulates that salary is the basis for compulsory social insurance contributions in cases where salary is stated in the labor contract and salary is paid to employees in foreign currency, on the basis of inheriting current regulations.

Specifically, in case the salary stated in the labor contract and the salary paid to the employee are in foreign currency, the salary used as the basis for compulsory social insurance contributions is calculated in Vietnamese Dong, on the basis of the salary in foreign currency converted into Vietnamese Dong at the average exchange rate on the interbank foreign exchange market, announced by the State Bank of Vietnam on January 2 for the first 6 months of the year, and on July 1 for the last 6 months of the year.

In case it falls on a holiday, the exchange rate of the next day announced by the State Bank of Vietnam will be used.