For Japanese companies operating in Vietnam, misunderstanding these changes could lead to payroll errors, compliance violations, and unexpected cost increases. This article breaks down every major change and provides concrete action items so your HR and payroll teams can prepare well in advance.<\/p>\n\n\n\n
Overview of Key Changes: Old Law vs. New Law<\/h2>\n\n\n\n
The table below summarizes the most impactful changes at a glance.<\/p>\n\n\n\n Misconception alert:<\/strong> Many media outlets reported that the new law expands the contribution base from “base salary only” to “base salary + allowances.” This is incorrect.<\/span> The old 2014 law already included base salary, allowances, and other additional payments in the contribution base.<\/p>\n<\/div><\/div>\n\n\n\n What the new law actually does is narrow the definition<\/strong><\/mark> of “other additional payments.” Under Article 31 of the new law, only payments that are “agreed to be paid regularly and stably in each salary payment period”<\/strong> are included in the SI contribution base.<\/p>\n\n\n\n This means the following types of payments are excluded<\/strong> from the contribution base under the new law:<\/p>\n\n\n\n Conversely, the following remain included<\/strong>:<\/p>\n\n\n\n Contribution ceiling:<\/strong> The maximum monthly SI contribution base remains capped at 20 times the reference level<\/strong>. With the current reference level of VND 2,340,000, the ceiling is VND 46,800,000\/month<\/strong><\/mark>.<\/p>\n<\/div><\/div>\n\n\n\n For many Japanese companies in Vietnam that already included allowances in their SI contribution base, the practical impact may be neutral or even slightly favorable<\/strong>. If your company has been paying SI contributions on variable bonuses, you may now have a legal basis to exclude those from the base. However, you must review each payment item in your salary structure carefully against the new definition.<\/p>\n\n\n\n The new law brings several previously uncovered worker categories into the mandatory social insurance<\/strong><\/mark> system.<\/p>\n\n\n\n If your company employs part-time workers<\/strong> — for example, part-time interpreters, cleaning staff, or Saturday-only workers — you must now register them for social insurance and pay contributions on their behalf, regardless of working hours.<\/p>\n\n\n\n For companies with foreign employees who were previously exempt<\/strong> from SI (e.g., those married to Vietnamese nationals), this exemption is removed. These employees must now be enrolled in the mandatory SI system from July 1, 2025.<\/p>\n\n\n\n The new law makes it easier for workers to qualify for a monthly pension:<\/p>\n\n\n\n This change is particularly relevant for Vietnamese employees who joined your company later in their career<\/strong> and may not have accumulated 20 years of contributions by retirement age. Under the new law, they can qualify for a pension with just 15 years, making retirement planning significantly more accessible.<\/p>\n\n\n\n Employee communication tip:<\/strong> This is positive news for your Vietnamese staff. Consider informing them about this change, as it may encourage longer-term retention — employees who previously thought they could never accumulate enough years for a pension now have a realistic path to monthly retirement benefits.<\/p>\n<\/div><\/div>\n\n\n\n This is one of the most impactful changes and likely the most sensitive topic for your Vietnamese employees.<\/p>\n\n\n\n The option to voluntarily withdraw SI contributions as a lump sum after 12 months of non-participation is completely abolished<\/strong><\/mark>. Lump-sum withdrawal is only permitted under the following four conditions<\/strong>:<\/p>\n\n\n\n Workers who were already enrolled in SI before July 1, 2025 benefit from a transitional provision<\/strong>: they may still apply for lump-sum withdrawal after 12 months of non-participation, provided they have fewer than 20 years<\/strong> of total contributions. This grandfathering clause is expected to phase out over time as more workers accumulate sufficient contribution years.<\/p>\n\n\n\n HR alert:<\/strong> Expect a surge in lump-sum withdrawal applications from employees before July 1, 2025. Some employees may even resign specifically to preserve their withdrawal rights under the old rules. Prepare your HR team for increased inquiries and ensure you communicate the grandfathering provisions clearly to reduce unnecessary panic.<\/p>\n<\/div><\/div>\n\n\n\n The overall contribution rates remain unchanged. The total combined rate for employer and employee is 32%<\/strong> of the contribution base.<\/p>\n\n\n\n The new law significantly strengthens enforcement mechanisms:<\/p>\n\n\n\n This is a clear signal from the Vietnamese government that SI compliance will be enforced more rigorously. Companies that have been underreporting contribution bases or delaying payments should take immediate corrective action.<\/p>\n\n\n\n The new law accelerates the digital transformation of Vietnam’s social insurance system:<\/p>\n\n\n\n Employers should ensure their HR and payroll systems are compatible with the electronic SI book system and prepare for the transition well before the January 2026 deadline.<\/p>\n\n\n\n Compliance checklist — complete before July 1, 2025:<\/strong><\/p>\n\n\n\n The Amended Social Insurance Law (Law 41\/2024\/QH15) represents the most significant overhaul of Vietnam’s social insurance framework in over a decade. While the contribution rates remain unchanged, the expanded coverage<\/strong>, refined contribution base definition<\/strong>, and restricted lump-sum withdrawals<\/strong> will affect virtually every employer operating in Vietnam.<\/p>\n\n\n\n Japanese companies should pay particular attention to the contribution base clarification — contrary to widespread reporting, the change may actually narrow<\/strong> rather than expand your contribution obligations, provided your salary structure is properly documented. However, the expanded coverage for part-time workers and certain foreign employees will likely increase costs for some employers.<\/p>\n\n\n\n The key to smooth compliance is preparation. Complete the action items above before July 1, 2025, and consult with a local HR and payroll specialist if you have complex compensation structures.<\/p>\n\n\n\nItem<\/th> Old Law (Law 58\/2014)<\/th> New Law (Law 41\/2024)<\/th><\/tr><\/thead> Contribution base<\/td> Base salary + allowances + other additional payments<\/td> Base salary + allowances + additional payments that are regular and stable<\/strong> (variable bonuses excluded)<\/td><\/tr> Part-time workers<\/td> Not covered<\/td> Covered<\/strong><\/td><\/tr> Registered individual business households<\/td> Not covered<\/td> Covered<\/strong><\/td><\/tr> Foreigners (Vietnamese spouse \/ work permit exempt)<\/td> Exempt from SI<\/td> Mandatory<\/strong><\/td><\/tr> Minimum pension contribution period<\/td> 20 years<\/td> 15 years<\/strong><\/td><\/tr> Lump-sum withdrawal (new enrollees after July 2025)<\/td> Allowed after 12 months of non-participation<\/td> Abolished<\/strong> (only 4 conditions remain)<\/td><\/tr> Late payment penalty<\/td> General provisions<\/td> 0.03%\/day<\/strong> (~10.95%\/year) + criminal liability<\/td><\/tr> Electronic SI book<\/td> Not mandatory<\/td> Mandatory from Jan 1, 2026<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n Contribution Base Clarification (Article 31) — Correcting a Common Misconception<\/h2>\n\n\n\n
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Practical Impact for Employers<\/h3>\n\n\n\n
Expanded Coverage Scope (Article 2)<\/h2>\n\n\n\n
Worker Category<\/th> Old Law<\/th> New Law<\/th><\/tr><\/thead> Part-time workers (with labor contract)<\/td> Not covered<\/td> Mandatory<\/td><\/tr> Registered individual business households<\/td> Not covered<\/td> Mandatory<\/td><\/tr> Non-salaried enterprise managers<\/td> Not covered<\/td> Mandatory<\/td><\/tr> Foreigners with Vietnamese spouse or work permit exemption<\/td> Exempt<\/td> Mandatory<\/td><\/tr> Workers on probation<\/td> Exempt<\/td> Still exempt (confirmed by Decree 158\/2025)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n What This Means for Japanese Companies<\/h3>\n\n\n\n
Pension Eligibility Relaxation (Articles 64-65)<\/h2>\n\n\n\n
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Lump-Sum Withdrawal Restrictions (Articles 70, 102)<\/h2>\n\n\n\n
For New Enrollees (First SI Participation After July 1, 2025)<\/h3>\n\n\n\n
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Grandfathering Rule for Existing Enrollees<\/h3>\n\n\n\n
Contribution Rates — No Change<\/h2>\n\n\n\n
Insurance Type<\/th> Employer<\/th> Employee<\/th> Total<\/th><\/tr><\/thead> Retirement & Survivorship<\/td> 14%<\/td> 8%<\/td> 22%<\/td><\/tr> Sickness & Maternity<\/td> 3%<\/td> 0%<\/td> 3%<\/td><\/tr> Occupational Accident & Disease<\/td> 0.5%<\/td> 0%<\/td> 0.5%<\/td><\/tr> SI Subtotal<\/strong><\/td> 17.5%<\/strong><\/td> 8%<\/strong><\/td> 25.5%<\/strong><\/td><\/tr> Health Insurance (HI)<\/td> 3%<\/td> 1.5%<\/td> 4.5%<\/td><\/tr> Unemployment Insurance (UI)<\/td> 1%<\/td> 1%<\/td> 2%<\/td><\/tr> Grand Total<\/strong><\/mark><\/td> 21.5%<\/strong><\/mark><\/td> 10.5%<\/strong><\/mark><\/td> 32%<\/strong><\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n Enhanced Penalties and Enforcement (Articles 40-41)<\/h2>\n\n\n\n
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Digitalization of Social Insurance<\/h2>\n\n\n\n
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Action Items for Employers<\/h2>\n\n\n\n
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Conclusion<\/h2>\n\n\n\n
Related Articles<\/h3>\n\n\n\n
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