The Vietnam social insurance contribution rate for foreigners is 30% of monthly capped salary, split between the employer (20.5%) and the employee (9.5%). This headline number is straightforward. The reality of compliance is not.
With the Social Insurance Law 2024 taking effect on July 1, 2025 and Decree No. 219/2025/ND-CP reshaping work permit categories from August 7, 2025, a growing number of expatriates previously classified as intra-company transfers now fall under mandatory enrollment for the first time. For employers, this means higher payroll costs. For foreign nationals, this means new compliance obligations and the opportunity to recover a meaningful portion of contributions through the one-time Social insurance claim for foreigners upon final departure.
This guide answers the questions HR managers, CFOs, and expatriates in Vietnam are asking in 2026: who must enroll, what the contribution rates and salary cap look like in practice, how to claim a refund before leaving Vietnam, and what employers should plan for when structuring expatriate assignments. The framework applies to FDI companies of all sizes, from representative offices to large multinational subsidiaries.
| Question | Answer |
|---|---|
| Total contribution rate? | 30% of capped salary (20.5% employer + 9.5% employee) |
| Salary cap (2026)? | VND 46,800,000/month (20x civil servant basic wage) |
| Who must enroll? | Foreigners with valid work permit, 12+ month contract with Vietnamese entity, below retirement age |
| Who is exempt? | Genuine intra-company transferees whose entire salary is paid by the foreign parent company |
| Refund available? | Yes, one-time withdrawal ~2 months of capped salary per contribution year |
| Annual contribution at cap? | VND 168.48M total (VND 115.13M employer + VND 53.35M employee) |
Currency reference: VND 25,400 per USD as of Q1 2026. Verify with the State Bank of Vietnam before budgeting.
Who must enroll: conditions for mandatory SI for foreigners
The compulsory insurance Vietnam foreign employees framework rests on two recent laws and one decree that took effect across 2025. Understanding which expatriates fall inside the framework and which fall outside is the first step in cost planning and compliance design for any FDI employer in Vietnam.
Legal basis: SI Law 2024 and Health Insurance Law 2024
The current rules combine three instruments:
- Social Insurance Law 2024 (Law No. 41/2024/QH15), effective July 1, 2025, replaces the 2014 Social Insurance Law. It maintains the prior framework for foreign employee enrollment while clarifying contribution bases and refund mechanics.
- Amended Health Insurance Law 2024 (Law No. 51/2024/QH15) governs health insurance enrollment in parallel with social insurance for foreign workers.
Decree No. 219/2025/ND-CP on foreign workers, effective August 7, 2025, replaces Decree No. 152/2020/ND-CP and reshapes work permit categories. Most consequentially for payroll, it tightens the definition of intra-company transferees, making it significantly harder for FDI subsidiaries to retain that classification when the Vietnamese entity bears any portion of expatriate compensation. The Vietnam social insurance law 2024 foreigners framework therefore interlocks with work permit decisions in ways that previous regulations did not.
Three eligibility conditions for mandatory enrollment
A foreign national becomes subject to mandatory enrollment when all three of the following conditions are met simultaneously:
- The foreign national holds a valid Vietnamese work permit or work permit exemption certificate.
- The foreign national has an employment contract with a Vietnamese legal entity of 12 months or longer.
- The foreign national has not reached retirement age at the time of signing. As of 2026: 61 years 6 months for men, 57 years for women, rising in phases under the Labour Code 2019 through 2028.
When all three conditions are met, both social insurance and health insurance enrollment is required. Unemployment insurance does not apply to foreign workers in Vietnam.
Two common enrollment scenarios
Scenario 1: Locally hired foreign nationals. Foreign nationals directly hired by a Vietnamese entity under a local employment contract are enrolled on the same terms as Vietnamese employees, with no special exception.
Scenario 2: Expatriates no longer qualifying as intra-company transferees. Under Decree 219, the intra-company transfer work permit Vietnam insurance exemption requires that all salary and allowances be paid exclusively by the foreign parent company. Any salary paid by the Vietnamese entity triggers mandatory social insurance enrollment.
Self-assessment for Scenario 2 applicability
| Diagnostic Question | If YES |
|---|---|
| Does the Vietnamese entity bear part or all of the expatriate’s salary directly? | SI enrollment review required |
| Is there an employment contract between the expatriate and the Vietnamese entity? | SI enrollment review required |
| Is the current work permit category other than “intra-company transfer”? | SI enrollment review required |
Cost recharge arrangements: the grey zone
The answer depends on where the economic burden of labour costs effectively falls. If the Vietnamese entity is the ultimate bearer of compensation cost, the intra-company transfer classification may not survive scrutiny in a Ministry of Home Affairs or Social Insurance Authority review.
Practical recommendation: Document the cost flow carefully and seek written guidance from the relevant authority when the structure is material to overall expatriate cost. Companies caught operating an inconsistent structure during a routine audit face both work permit invalidation risk and back-contribution exposure.
Vietnam social insurance contribution rate for foreigners
This section breaks down the rates, the cap, and the actual cash outflow for employers in 2026. Understanding the Vietnam mandatory insurance expat employer cost at this level of detail is essential for assignment budgeting and tax-efficient expatriate package design.
Insurance types applicable to foreigners
| Insurance Type | Required for Foreigners? |
|---|---|
| Social Insurance (pension, sickness, occupational accident) | Yes |
| Health Insurance | Yes |
| Unemployment Insurance | No (Vietnamese nationals only) |
Contribution rate breakdown: employer vs employee
| Contributor | Social Insurance | Health Insurance | Total Monthly |
|---|---|---|---|
| Employer | 17.5% | 3.0% | 20.5% |
| Employee | 8.0% | 1.5% | 9.5% |
| Combined (Total) | 25.5% | 4.5% | 30.0% |
The 17.5% employer social insurance contribution breaks down into 14% for the retirement and survivorship fund (the pension sub-component) and 3.5% for the sickness, maternity, occupational accident and disease fund. This sub-allocation matters when calculating the refundable portion, since only the pension sub-component is refundable.
Contribution salary cap of VND 46,800,000 per month
Contributions are calculated on a contribution base capped at 20 times the civil servant basic wage. As of 2026, this cap stands at VND 46,800,000 per month (approximately USD 1,840). The cap was set during the basic wage reform in mid-2024 and has remained stable through 2025 and 2026.
| Item | Monthly (VND) | Annual (VND) | Annual (USD) |
|---|---|---|---|
| Employer contribution (20.5%) | 9,594,000 | 115,128,000 | ~4,535 |
| Employee contribution (9.5%) | 4,446,000 | 53,352,000 | ~2,100 |
| Total combined (30%) | 14,040,000 | 168,480,000 | ~6,635 |
For 5 expatriates at the cap: Gross annual employer contribution burden reaches approximately VND 575 million. The headline cost is significant. The net cost after the refund mechanism is materially lower.
Net employer cost after the one-time SI withdrawal
| Item | Annual as % of Monthly Cap | Annual Amount (VND) |
|---|---|---|
| Employer gross contribution | 246% | 115,128,000 |
| Less: refund from one-time SI withdrawal | 200% | 93,600,000 |
| Effective employer net cost | ~46% | ~21,528,000 |
Key takeaway for assignment design: Structuring expatriate packages with the refund mechanism factored in turns a headline 30% overhead into approximately 8 to 12% on a net basis, provided documentation and process are handled correctly.
One-time social insurance withdrawal for foreigners
The Vietnam social insurance refund foreigners mechanism is the single most important feature of the framework for both individual expatriates and FDI employers. It transforms what would otherwise be a sunk cost into a recoverable contribution.
What the one-time social insurance claim is?
The one-time social insurance social insurance claim is a lump-sum refund of accumulated pension-component contributions, paid to a foreign national who permanently leaves Vietnam after termination of the local employment contract.
Scope note: Only the pension sub-component (22% combined: 14% employer + 8% employee) is refundable. The 3.5% sickness/maternity and 4.5% health insurance contributions are not refundable. Contributions for foreign nationals began in 2022.
Eligibility conditions for the one-time withdrawal
The Vietnam Social Insurance one-time withdrawal eligibility rules apply when any one of the following conditions is satisfied:
| Condition | Most applicable to |
|---|---|
| Reached retirement age but fewer than 15 years of contribution history | Long-staying foreign workers near retirement age |
| Meets pension eligibility conditions but permanently departs Vietnam | Long-term residents |
| Employment contract terminated prior to retirement age | Most expatriates in FDI assignments (primary trigger) |
One-time rule: The withdrawal can only be claimed once per person across an entire career. For expatriates likely to return to Vietnam, deferring the application until final departure is the recommended approach.
How to calculate the refund amount
For contributions of one year or more, the formula is[5]:
REFUND = Calculation Base Salary × 2 months × Number of Years of Contribution
Worked example: An expatriate contributed at VND 46,800,000 cap for two years (2024 to 2026), then departs permanently: 46,800,000 × 2 × 2 = VND 187,200,000 (approximately USD 7,370)
Partial-year contribution rounding rules
Under Circular 59/2015/TT-BLDTBXH, Article 19, Paragraph 4:
| Partial Period | Rounded To | Example |
|---|---|---|
| 1 to 6 partial months | Half a year (0.5 years) | 2 years 4 months 2.5 years |
| 7 to 12 partial months | One full year | 3 years 9 months 4 years |
| 1 year + 1 month | 1.5 years | 1 year 1 month 1.5 years |
Note: Circular 12/2025/TT-BNV no longer explicitly contains this rounding provision. Confirm the current treatment with the competent provincial Social Insurance Authority before final calculation.
Key considerations for employers
The Vietnam mandatory insurance expat employer cost is the most material new line in 2026 FDI assignment budgets. Beyond the headline contribution rate, employers face three practical decisions that meaningfully affect total cost of ownership.
When the company covers both employer and employee shares
In Scenario 2 arrangements, employers commonly absorb both the 20.5% employer contribution and the 9.5% employee contribution to preserve the expatriate’s contractually agreed take-home pay. For a five-expatriate FDI subsidiary at the cap, this increases gross annual cost by approximately VND 267 million (USD 10,500).
Tax treatment of refunds returned to the company
| Principle | Why it matters |
|---|---|
| Capture in writing (employment contract or side agreement at start of assignment) | Verbal agreements are not enforceable; disputes arise at departure |
| Specify the return mechanism (Power of Attorney or personal transfer) | Prevents ambiguity on how refund flows back to the company |
| Treat returned amounts as corporate income for CIT purposes | Creates net-neutral tax effect over time; confirm with tax advisor |
Compliance benefits beyond cost
Mandatory enrollment also delivers compliance benefits that have material value during audits and inspections under Decree 12/2022/ND-CP:
- Reduced risk during tax and Social Insurance Authority audits
- Clearer legal framework for the employment relationship
- Alignment with Decree 219 work permit renewal requirements
Related reading: For a structured framework comparing in-house management versus outsourcing, see our parallel guides: Payroll outsourcing vs in-house cost Vietnam and when to outsource payroll Vietnam.
Streamline Your One-Time Social Insurance Claim in Vietnam with terra
If your company is offboarding foreign talent or you are an expat preparing to leave Vietnam, terra’s One-Time Social Insurance Claiming Service ensures a fast, secure, and hassle-free withdrawal process:
- 100% Remote Process: No need to return to Vietnam. Simply provide a legal authorization, and terra will handle all procedures end-to-end from abroad.
- Full Legal Compliance: Backed by over 21 years of FDI consulting experience, our experts meticulously audit your eligibility and documents according to Decree No. 143/2018/NĐ-CP.
- Multilingual Support: Eliminate language barriers with dedicated consultants fluent in English and Japanese.
- Transparent Fee Structure: Enjoy clear, upfront contracts with zero hidden costs, along with continuous tracking until your payout is successfully received.
For FDI subsidiaries that prefer to focus on commercial operations rather than building in-house Vietnamese payroll and compliance capability, terra operates a BPaaS payroll solution and HR platform built specifically for FDI in Vietnam. terra is operated by Vina Payroll Outsourcing (VPO), a member of the I-GLOCAL Japan group.
Conclusion
The Vietnam social insurance contribution rate for foreigners in 2026 sits at 30% of capped salary, with the employer carrying 20.5% and the employee carrying 9.5%. The Social Insurance Law 2024 effective July 2025 and Decree 219/2025/ND-CP effective August 2025 together expanded the population of expatriates subject to mandatory enrollment, particularly former intra-company transferees whose salary is partly borne by Vietnamese entities.
For employers, the headline cost is significant but not the full picture. The one-time withdrawal mechanism recovers a meaningful share of pension-component contributions when the assignment ends, dropping the effective net cost materially below the headline 30% figure. Realizing this benefit requires careful documentation at the start of the assignment, disciplined process management at the end, and clear written agreements about how the refund flows when the company has absorbed the employee’s contribution share.
The framework rewards proactive planning. FDI subsidiaries that built compliance into their expatriate package design before Decree 219 are operating smoothly in 2026. Those still operating on pre-2025 assumptions face a window of approximately 6 to 12 months to migrate before the next round of inspections catches the inconsistency.
