Vietnam’s State Social Insurance Fund
HANOI – The administration of social insurance can be a complicated and confusing process for employers with operations in multiple countries. In this article, we explore social insurance in Vietnam in order to help clarify the key components of compliance in this country.
Social insurance in Vietnam covers compensation for salary lost due to illness, maternity, working accidents, occupational disease, retirement and death. There are three types of mandatory social security in Vietnam: social insurance, medical insurance, and unemployment insurance.
Mandatory employer contribution to the State Social Insurance Fund is typically 18 percent of gross employee income, and mandatory employee contribution is typically 8 percent of gross income (applied from January, 2014). For employees working under an employment contract that is less than three months in duration, the social insurance contribution amount should be included in their salary, and employees are responsible for paying their own social insurance.
This article is an excerpt from the January and February 2014 issue of Asia Briefing Magazine, titled “Payroll Processing Across Asia.” In this issue of Asia Briefing Magazine, we provide a country-by-country introduction to how payroll and social insurance systems work in China, Hong Kong, Vietnam, India and Singapore. We also compare three distinct models companies use to manage their payroll across various countries with external vendors, and explain the differences among three main models: country-by-country, managed, and integrated models while highlighting some benefits and drawbacks of each.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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A Guide to Understanding Vietnam’s VAT
In this issue of Vietnam Briefing, we clarify the entire VAT process by taking you through an introduction as to what VAT is, who and what is liable, and how to pay it properly. We first take you through the basics of VAT in Vietnam before taking you deeper into the topic. Additionally, we provide updates on the new changes to the VAT process and explain how they will impact your business. The magazine is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore until the end of April.