Ho Chi Minh City, 14 July 2026
The new regulations on compulsory social insurance have significant practical implications for human resources management activities and legal compliance of enterprises. In addition to employees working under labor contracts, certain individuals who were previously outside the scope of compulsory social insurance, are now subject to mandatory participation under the new regulations. This Weekly Debrief summarizes several key changes and practical considerations to help enterprises proactively assess the impact and prepare for compliance with the new requirements.
Change in Base Salary from 1 July 2026
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Under Decree 161/2026/ND-CP, from 1 July 2026, the base salary will increase from VND 2,340,000 per month to VND 2,530,000 per month. Although the LOSI 2024 replaces the defination of base salary with a reference level, during the transition period when the base salary has not yet been abolished, the statutory reference level continuoes to be determined by reference to the prevailing base salary. Accordingly, this adjustment will directly impact the calculation of compulsory social insurance and health insurance contributions.
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Specifically, under the LOSI 2024 and the amended Law on Health Insurance, the monthly salary used as the basis for compulsory social insurance contributions and the maximum monthly salary used to calculate health insurance contributions must not exceed 20 times the statutory reference level applicable at the time of contribution. Accordingly, from 1 July 2026, the cap monthly salary used as basis for compulsory social insurance and health insurance contributions will increase to VND 50,600,000 per month. In addition, the increase in the base salary (corresponding to the reference level during the transition period) will also lead in higher social insurance benefits that are calculated based on the statutory reference base salary. These include, among others, the lump-sum childbirth allowance, convalescence and health rehabilitation allowance after sickness, maternity leave or similar periods.
Expansion of individuals subject to participate in Compulsory Social Insurance
LOSI 2024 expands the categories of individuals subject to compulsory social insurance. Some notable groups that enterprises need to pay attention to are as follows:
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Employees working under indefinite-term labour contracts or definite-term labour contracts with a term of at least one month, including cases where the parties use a different title for the agreement, but its contents reflect the labor relationship such as paid employment, wages, and the management, administration, and supervision of one party over the other. This approach is consistent with the Labour Code, which determines the exsitence of an employment relationship based on its substance, rather than the title of the agreement.
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Employees who work on a part-time basis: If their monthly salary is equal to or higher than the minimum salary used as the basis for compulsory SI contributions; and
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Enterprise managers and certain unpaid managerial positions, including supervisors, representatives of enterprises’ capital as prescribed by law, members of the Board of Directors, General Directors, Directors, members of the Supervisory Board or supervisors who do not receive a salary.
Clarifying Social Insurance Contribution Levels for Enterprise Managers
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A notable change is that non-salaried enterprise managers are now also subject to compulsory social insurance participation. These individuals may choose the monthly salary used as the basis for social insurance contributions, provided that it is not lower than the statutory reference level and does not exceed 20 times the statutory reference level at the time of contribution.
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In addition, to avoid duplicate compulsory social insurance, LOSI 2024 also clarifies the principles for determining the business responsible for making compulsory social insurance contributions where an individual simultaneously holds multiple positions or has both managerial and employment relationships. Specifically:
– Non-salaried managers who are also employees under a labor contract must participate through the enterprise where the labour contract exists;
– Non-salaried managers who are also salaried managers must participate through the enterprise where they receive a salary;
– Non-salaried managers working at multiple enterprises must participate through the first enterprise at which they assumed the managerial positon;
– Salaried managers working at multiple enterprises must participate through the first enterprise at which they assume the managerial position.
The expansion of the scope of compulsory social insurance participation requires enterprises to review their existing contracts and internal management structures to ensure that all eligible participants are properly defined and covered, thereby mitigating compliance risks and the potential for administrative penalties.
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For advice on compulsory social insurance, employment compliance, and HR-related legal matters in Vietnam, please visit Labour & Employment practice or contact our team:
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