Many FDI enterprises keep experienced experts and technicians working after retirement age — and in 2026 the retirement age under the roadmap in Article 169 of the Labour Code 45/2019/QH14 is 61 years and 6 months for men and 57 years for women. The relationship with elderly workers has three differences to handle correctly from the contract onward: the employment contract form under Article 149 of the Labour Code, the social insurance contribution mechanism for a person already receiving a pension, and personal income tax on the new income (while the pension itself is exempt). This article sets out the current 2026 framework for all three issues, with notes on health and working time.
2026 retirement ages and contract forms for elderly workers
Under the retirement age increase roadmap in Article 169 of the Labour Code 45/2019/QH14, the 2026 retirement age is 61 years and 6 months for male employees and 57 years for female employees in normal working conditions. An employee reaching retirement age and qualifying for a pension may continue working if both parties agree. Article 149 of the Labour Code regulates this relationship specifically: when employing an elderly worker (a person continuing to work after retirement age), the parties may agree to conclude employment contracts multiple times — an exception to the usual limit on successive fixed-term contracts — and should record work suited to the employee’s health.
An employee receiving a pension who signs a new employment contract is entitled, in addition to the pension, to full salary and benefits under the new contract like an ordinary employee. The enterprise must distinguish two structuring options: an employment contract (applying where there is management, direction and time-based pay — carrying insurance and labour regime obligations) and a service contract with a genuinely independent individual (not an employment relationship). Labelling a substantive employment relationship as services risks reclassification as a disguised employment contract under Article 3 of the Labour Code.
Social insurance for pensioners: what is paid, what is not
An employee receiving a pension who works under a new employment contract remains within compulsory social insurance coverage, but the contribution mechanism is adjusted to the fact that they already enjoy retirement benefits: the enterprise and employee contribute the portions for the sickness and maternity fund, the occupational accident and disease fund, health insurance and unemployment insurance as prescribed; the portion for the retirement and survivorship fund is handled by an equivalent amount paid directly to the employee with the salary, because a pensioner does not accumulate further retirement entitlements from that portion in the ordinary way.
The common enterprise error is one of two extremes: contributing nothing on the reasoning that the person ‘has retired’ — leading to reassessment and loss of the employee’s health and occupational accident entitlements when an incident occurs; or contributing everything like a young employee including the retirement and survivorship fund in the ordinary way. Correct handling is to declare the headcount increase normally on the social insurance system, apply the pensioner contribution mechanism, and keep the employee’s pension decision as the basis for applying it.
PIT: pension exempt, new income taxed normally
A pension paid by Vietnam’s Social Insurance Fund is personal income tax exempt — no withholding applies to the pension of the elderly worker. Conversely, salary and wages from the new employment contract are ordinary taxable income: the enterprise withholds under the progressive table of the Personal Income Tax Law 109/2025/QH15, and the worker receives the personal relief of VND 15.5 million per month (and dependant relief if registered) like any other resident employee; the new income and the pension are not aggregated for tax because the pension sits outside taxable income.
Where the elderly worker has a pension from a foreign source remitted to Vietnam or additional consulting income from third parties, the enterprise handles only the income it pays; other sources fall under the individual’s self-declaration at annual finalisation. The enterprise should explain these two income layers clearly when signing the new contract, to avoid the common misconception that ‘after retirement all income is tax-free’.
Health and working time: mandatory limits when employing elderly workers
The law sets specific protective conditions for elderly workers: Article 152 of the Labour Code 45/2019/QH14 requires a health check at least every six months for elderly workers (versus once a year for ordinary employees), and the enterprise must not employ elderly workers in heavy, hazardous or dangerous occupations, or especially heavy, hazardous or dangerous work adversely affecting their health, except where safe working conditions are ensured as prescribed. The periodic health check conclusion is the legal basis for assigning and maintaining work for this group.
For working time, the enterprise should agree reduced or flexible hours suited to health in the contract, limit overtime and avoid regular night shifts for elderly workers, and assign work avoiding danger factors, work at height or high-risk equipment operation where the health conclusion does not permit. For FDI enterprises using elderly experts, the effective model is usually a part-time contract or an adviser role under a clear employment contract, with six-monthly health checks and a job description reviewed against each medical conclusion.
Frequently Asked Questions
In what form does the enterprise contract with an employee who has retired?
Under Article 149 of the Labour Code 45/2019/QH14, the parties may agree to conclude employment contracts multiple times with an elderly worker; a pensioner signing a new contract receives full salary and benefits under the new contract in addition to the pension. The 2026 retirement ages are 61 years 6 months (men) and 57 years (women). A service contract is only appropriate where the relationship is genuinely independent, without management and direction.
Must an elderly worker receiving a pension still pay compulsory social insurance?
Yes, under a specific mechanism: working under a new employment contract keeps them in compulsory coverage — contributing the sickness and maternity, occupational accident and disease funds, health insurance and unemployment insurance; the retirement and survivorship portion is paid as an equivalent amount directly to the employee with salary because they already receive a pension. Contributing nothing is wrong and is reassessed.
How is the income of a worker after retirement age taxed for PIT?
A pension paid by Vietnam’s Social Insurance Fund is PIT exempt. Salary from the new employment contract is ordinary taxable income: withheld under the progressive table of Law 109/2025/QH15, with personal relief of VND 15.5 million per month like other resident employees; the two sources are not aggregated because the pension is outside taxable income.
What health and working time points must be observed when employing elderly workers?
Health checks at least every six months under Article 152 of the Labour Code; no assignment to heavy, hazardous or dangerous work adversely affecting health except where safe conditions are ensured as prescribed; agree reduced hours, limit overtime and night shifts, and assign work according to the periodic health check conclusion.
FLAT Law Firm advises on employing elderly workers compliantly
FLAT supports FDI enterprises in designing employment relationships with elderly experts after retirement age: contracts under Article 149 of the Labour Code, the SI mechanism for pensioners and tax handling of new income.
This article has been quality-reviewed by the FLAW AI Legal Council