Social insurance is the guarantee to fully or partially offset a laborer’s income that is lost or reduced due to his/her sickness, maternity, labor accident, occupational disease, unemployment, retirement or death, on the basis of his/her contributions to the social insurance fund. The two types of social insurance are compulsory social insurance and voluntary social insurance.
- Voluntary social insurance
Voluntary social insurance is a form of social insurance organized by the State in which a participant may select a premium rate and a method of premium payment suitable to their income and the State supports his/her payment of social insurance premiums for them to enjoy retirement and survivor allowance regimes.
(Social Insurance Law 2014)
Voluntary social insurance is applied to freelance foreign employee; foreign employee performing intracompany transfer program; retired foreign employee.
Whether involving voluntary social insurance or not depends on the decision of the foreign employee.
- Compulsory social insurance
Compulsory social insurance is a form of social insurance organized by the State in which employees and employers are required to participate.
(Social Insurance Law 2014)
Employees being foreign citizens working in Vietnam must involve the compulsory social insurance if they meet these conditions:
- Possess a work permit or practice certificate or practice license issued by a competent Vietnamese agency.
- Sign an indefinite-term contract or a contract of a term of full 1 year or longer term with employers in Vietnam.
Comparison table between foreign workers and Vietnamese workers
| Comparison | Criteria | Foreign employees | Vietnamese employees |
| Similarities | Social insurance regimes and policies for foreign employees are also prescribed sufficiently as the Vietnamese employees,’ such as sickness, maternity, employer liability insurance, occupational disease, retirement, death. |
| Differences | 1. Types of social insurance that was paid | In 2021, foreign employees were settled only: sickness – maternity regimes, labor accident – occupational disease regimes as enterprises only paid for these 2 funds. Retired and death regimes will be applied from 2022. | Whereas, Vietnamese employees were settled in 3 funds: sickness – maternity regimes, labor accident – occupational disease regimes and retired – death regimes (except for normal employee, not including cadres, civil servants and public employees; person of people’s armed forces units; employees receiving salary from state budget that have not been paid by the employer for labor accident and occupational disease insurance. |
| 2. Regarding the payment rate | Recently, social insurance premium rate over the salary rate of foreign employees is lower than that of Vietnamese employee.
(For example: in 2021, foreign employee: total 3%; Vietnamese employees in proprietor: 25%) |
Recently, social insurance premium rate over the salary rate of Vietnamese employees is higher than that of foreign employee. | |
| 3. The policies to support social insurance impacted by Covid pandemic | For foreign employees: no policy | For Vietnamese employees: the payment of retired and death funds was temporarily put off in certain cases |