Social, Health and Unemployment Insurance for Foreign Employees in Vietnam: A Complete Guide

Social, Health and Unemployment Insurance for Foreign Employees in Vietnam: A Complete Guide for Employers

Do foreign employees — the executives, technical experts and skilled workers that FDI enterprises bring into Vietnam — have to join social insurance, health insurance and unemployment insurance on the same terms as Vietnamese employees? The answer is not a simple yes or no, but three schemes with three different answers: compulsory social insurance subject to conditions, compulsory health insurance under the same threshold since 1 July 2025, and no unemployment insurance at all.

From 1 July 2025, the 2024 Social Insurance Law (No. 41/2024/QH15) and the 2024 amended Health Insurance Law (No. 51/2024/QH15) took effect together, substantially reshaping the legal framework for foreign employees' insurance. This guide systematizes the current rules so that HR departments and management can apply them correctly from day one — avoiding retroactive collection, administrative fines and unnecessary labor disputes.

1. Why FDI employers must pay close attention to insurance for foreign staff

Three reasons make this hotter than ever for foreign-invested enterprises.

First, the legal framework has fundamentally changed. Decree 143/2018/ND-CP — the instrument that once detailed compulsory social insurance for foreign employees — has been replaced by the 2024 Social Insurance Law. The new Law narrows and clarifies coverage (removing indefinite-term contracts from the compulsory scope), while the amended 2024 Health Insurance Law for the first time contains a dedicated provision on foreign employees (Article 12(1)(c)). Employers relying on "old experience" risk covering the wrong people or applying the wrong rates.

Second, the cost is material. For a foreign expert earning VND 100 million per month, total insurance costs borne by the employer and employee together amount to roughly 30% of the insurable payroll — with the employer bearing 20.5%. Miscalculating the contribution base (for example, omitting allowances) or missing covered employees leads to large retroactive assessments.

Third, the legal risk is interconnected. Insurance obligations are tightly linked to work permits and labor contracts. One error here can trigger violations elsewhere when authorities conduct joint inspections.

2. The legal framework: three schemes, three different answers

Before the details, the overall picture:

The key takeaway: since 1 July 2025, social and health insurance share a single threshold — a definite-term labor contract of 12 months or more — and the same three exclusions. This considerably simplifies HR administration compared with the previous patchwork of separate rules.

3. Which foreign employees are subject to compulsory social insurance

3.1. General conditions

Under Article 2(2) of the 2024 Social Insurance Law, a foreign citizen working in Vietnam is subject to compulsory social insurance when working under a definite-term labor contract with a term of 12 months or more with an employer in Vietnam.

In other words, two cumulative elements: (1) being a foreign citizen working in Vietnam, and (2) a definite-term labor contract of 12 months or more. Contracts of under 12 months — for example 6-month or seasonal contracts — fall outside compulsory coverage.

3.2. The three exclusions

Even when the 12-month contract condition is met, a foreign employee is not subject to compulsory social insurance if falling into one of three cases:

1. Intra-corporate transfer under the regulations on foreign workers in Vietnam (point (a)). This covers experts and managers seconded by an overseas parent company to a branch or subsidiary in Vietnam — the familiar "intra-corporate transferee" group in multinational groups.
2. Having reached retirement age at the time the labor contract is concluded, per Article 169(2) of the 2019 Labor Code (point (b)). Retirement age currently follows a roadmap: 62 for men and 60 for women by 2028 (increasing by 3 months per year for men and 4 months per year for women from 2021).
3. An international treaty to which Vietnam is a party provides otherwise (point (c) — for example bilateral social security agreements under which the employee remains covered in the sending country).

3.3. The implicit condition: lawful employment

The 2024 Law does not restate the work-permit requirement in its coverage clause, but the logic of the legal system requires foreign employees to work lawfully for full rights and obligations to arise. Under the 2019 Labor Code and Decree 219/2025/ND-CP (effective 07/8/2025, replacing Decree 152/2020/ND-CP), foreign employees working under labor contracts in Vietnam must hold a work permit (except for statutory exemptions confirmed in writing). Employers should register social insurance only for employees whose work permit procedures are complete — both to comply with labor law and to avoid complications when the social insurance agency cross-checks records.

3.4. Key change versus Decree 143/2018

Under Decree 143/2018/ND-CP, compulsory coverage included foreign employees with definite-term contracts of at least one year or indefinite-term contracts. The 2024 Social Insurance Law has dropped the "indefinite-term contract" limb for foreign employees.

This is a change many employers will miss: if an enterprise signs an indefinite-term contract with a foreign expert, the current Law's text no longer lists that case as subject to compulsory social insurance. However, local social insurance agencies' practice may not yet be fully consistent during the transition — employers should seek written clarification from the registering agency before deciding not to contribute, rather than relying on their own reading.

4. Social insurance rates: 17.5% employer, 8% employee

4.1. Detailed contribution rates

Under Articles 32–33 of the 2024 Social Insurance Law and the still-effective guiding instruments, compulsory social insurance rates for foreign employees are:

Note on the occupational accident and disease fund: enterprises in high-risk industries may, if eligible and approved by the competent authority, contribute at a reduced rate of 0.3% (per Decree 58/2020/ND-CP and Decision 595/QD-BHXH).

4.2. The contribution base: more than basic salary

The salary base for compulsory social insurance is determined under Article 34 of the 2024 Social Insurance Law and comprises:

• Salary under the labor contract;
• Salary allowances;
• Other additional payments agreed to be paid regularly and stably in each pay period at a determinable fixed amount.

This is where FDI employers most often trip: foreign experts' packages typically combine basic salary with allowances (housing, travel, attendance) and additional payments. If these meet the "regular, stable, determinable amount" test, they must be included in the base. Contributing only on basic salary while the contract lists fixed allowances is a classic error leading to retroactive collection.

The contribution ceiling equals 20 times the statutory pay rate. At the current statutory pay of VND 2,530,000/month (Decree 161/2026/ND-CP), the ceiling is VND 50,600,000/month. The statutory pay is set by the State and may be adjusted — verify the current figure when calculating.

4.3. Worked example

Foreign expert A signs a 24-month labor contract with a total insurable income of VND 80,000,000/month (basic salary 60 million + fixed monthly housing allowance 20 million; the ceiling applies, so only 50.6 million counts):

• Employer contribution: 50,600,000 × 17.5% = VND 8,855,000/month
• Employee contribution: 50,600,000 × 8% = VND 4,048,000/month

5. Health insurance for foreign employees: the 12-month threshold from 1 July 2025

5.1. Covered persons

Article 12(1)(c) of the 2008 Health Insurance Law — as amended by Article 1(10) of the 2024 amending Law (No. 51/2024/QH15, effective 1 July 2025) — provides: a foreign citizen working in Vietnam under a definite-term labor contract of 12 months or more with an employer in Vietnam is subject to health insurance, except for the same three exclusions as social insurance (intra-corporate transferees; retirement age reached at contract signing; international treaty provides otherwise).

This is a notable development: before 1 July 2025, health insurance law had no such dedicated provision for foreign employees. Aligning the 12-month threshold means employers now determine coverage once for both social and health insurance.

5.2. Health insurance rates

Under Article 13(1)(a) of the Health Insurance Law (2024 amendments), the monthly contribution for this group is capped at 6% of monthly salary, with the employer paying two-thirds and the employee one-third. In current practice, the rates applied are:

• Employer: 3%
• Foreign employee: 1.5%

5.3. Health insurance benefits

Participating foreign employees enjoy the same medical examination and treatment benefits as Vietnamese employees: issuance of a health insurance card, registration of an initial care facility, and reimbursement of medical costs at the prescribed benefit levels and technical tiers. For experts who travel frequently, employers should brief them on proper referral procedures so they receive full benefits.

6. Unemployment insurance: foreign employees are not covered

This is the biggest difference — and the most common source of confusion: foreign employees are not subject to unemployment insurance, even though they participate in compulsory social and health insurance.

The legal basis is clear:

• Article 2(1) of the 2025 Employment Law (74/2025/QH15) defines "employee" for that Law's purposes as a Vietnamese citizen aged 15 or older, able to work and seeking employment.
• Article 43 of the 2025 Employment Law makes unemployment insurance compulsory for "employees" under specified labor contracts — and "employee" here, per the definition above, covers Vietnamese citizens only.

Practical consequences: foreign employees do not pay the 1% employee unemployment contribution, employers do not pay the 1% employer contribution for them, and on contract termination they cannot claim unemployment benefits. Instead, their principal safety net on departure is the lump-sum social insurance payment (see section 7).

Note: under Article 168(3) of the 2019 Labor Code, for employees not covered by unemployment insurance, the employer must pay the employee, together with each salary payment, an amount equal to the employer's unemployment-insurance contribution — paid directly to the foreign employee instead of into the UI Fund.

6.1. Combined rates: 30% versus 32%

The combined rate for foreign employees is 30%, two percentage points below the 32% for Vietnamese employees — the difference being exactly the unemployment insurance component (1% + 1%) that does not apply to foreigners.

7. Benefits available to foreign employees — with lump-sum payment at the center

7.1. Lump-sum social insurance: the most practical benefit

Most foreign employees do not stay in Vietnam long enough to draw a pension (the general conditions being retirement age plus 15 years of contributions). Accordingly, the lump-sum social insurance payment is the benefit they genuinely care about when finishing work in Vietnam.

Article 70(2) of the 2024 Social Insurance Law provides: a foreign employee (within Article 2(2)) who has ceased participation and files a claim is entitled to a lump-sum payment in any of the following cases:

1. Reaching pension age with fewer than 15 years of contributions;
2. Suffering from cancer, polio, decompensated cirrhosis, severe tuberculosis, or AIDS;
3. Work-capacity reduction of 81% or more; persons with particularly severe disabilities;
4. Meeting pension conditions but no longer residing in Vietnam;
5. Termination of the labor contract, or expiry of the work permit, practice certificate or practice license without renewal.

Case 5 is by far the most common in practice: an expert finishes a 2-year contract, the employer does not renew, the work permit lapses — and the employee may claim a lump-sum payment for the entire contribution period.

The lump-sum amount is computed from the number of contribution years and the average monthly salary base, per Article 71 of the 2024 Social Insurance Law. The employee files the claim with the social insurance agency after participation ends; the employer must finalize the insurance book and cooperate on related documents.

7.2. Short-term social insurance benefits

While participating in compulsory social insurance in Vietnam, foreign employees enjoy the same short-term benefits as Vietnamese employees:

• Sickness benefits: allowances for leave due to illness, non-occupational accidents, or caring for sick children;
• Maternity benefits: foreign female employees giving birth in Vietnam receive statutory maternity allowances;
• Occupational accident and disease benefits: lump-sum or monthly allowances depending on the degree of work-capacity reduction.

7.3. A note on pensions

In principle, foreign employees who reach retirement age with 15 years of contributions may draw a pension. In practice, few accumulate 15 contribution years in Vietnam; and Article 70(2) expressly contemplates the case of "meeting pension conditions but no longer residing in Vietnam" being settled by lump-sum payment instead. Employers should communicate this clearly to foreign employees at contract signing to avoid false expectations.

8. Employer compliance procedures

8.1. Registration

Employers must register foreign employees for social and health insurance within 30 days of concluding a covered labor contract. The dossier includes the employee's declaration for participation and information adjustment (form TK1-TS) and the employer's declaration (form TK3-TS), together with the labor contract and work permit (copies).

In practice, most employers file electronically with the social insurance agency. Key point: nationality, work permit number and contract term must be declared accurately — these are the basis on which the agency determines coverage.

8.2. Reporting increases, decreases and finalizing books

• Report increases: on signing or renewing a covered contract;
• Report decreases: on contract termination, or when the employee moves into an excluded category;
• Finalize the book: on departure, the employer must finalize the contribution record and hand the insurance book to the employee for their lump-sum claim or preservation.

8.3. Monthly payment

Social and health insurance are withheld and remitted monthly with payroll. The employer deducts the employee's share (8% social + 1.5% health) from salary and remits it together with the employer's share (17.5% social + 3% health) to the social insurance agency's collection account. Late payment accrues late-payment interest — see section 9.

9. Risks of non-payment or incorrect payment

9.1. Administrative sanctions

Failure to register, covering fewer employees than required, or underpaying (evasion or late payment) attracts administrative sanctions under Decree 283/2026/ND-CP (effective 10/9/2026). Beyond fines, employers face remedial measures: retroactive collection of all unpaid social and health insurance contributions plus late-payment interest on the outstanding amounts.

Where social or health insurance evasion involves large amounts, or where violations repeat after an administrative sanction, responsible individuals may face criminal liability for evading social, health and unemployment insurance contributions under Article 216 of the 2015 Penal Code (as amended in 2017).

9.2. Linked work-permit violations

Employing foreign workers without a work permit or a written exemption confirmation draws fines under Article 13(5) of Decree 283/2026/ND-CP of VND 30,000,000 to VND 45,000,000 (1–10 employees), VND 45,000,000 to VND 60,000,000 (11–20 employees), VND 60,000,000 to VND 75,000,000 (21 or more employees). In joint inspections, insurance and work-permit violations are typically uncovered together — "one error, double penalties".

9.3. Labor dispute risk

Foreign employees deprived of full insurance coverage may complain or sue for damages — for example, medical costs that health insurance would have covered, or maternity allowances. For highly paid experts, one self-paid course of treatment can run into hundreds of millions of dong, and the employer bears that cost if found at fault for non-participation.

10. Eight-step HR compliance checklist

1. Inventory all foreign employees: classify by contract term (12 months or more versus under 12 months) and working arrangement (labor contract, intra-corporate transfer, expert, etc.).
2. Apply the three exclusions (Article 2(2), 2024 Social Insurance Law; Article 12(1)(c), Health Insurance Law): remove intra-corporate transferees, those already at retirement age when contracting, and those covered by an applicable international treaty.
3. Verify work permits: register insurance only for employees holding a valid work permit, practice certificate or practice license, or a written exemption confirmation.
4. Determine the correct contribution base: review labor contracts, list all salary, allowances and regularly paid fixed additional amounts; apply the 20× statutory-pay ceiling.
5. Register within 30 days of contract signing; report increases and decreases promptly as circumstances change.
6. Set up monthly withholding and remittance: deduct 9.5% from the employee's salary, add the 20.5% employer cost, and reconcile periodically with the social insurance agency.
7. Prepare for contract end: finalize insurance books on time, guide the employee through the lump-sum claim procedure, and hand over the insurance book.
8. Keep complete records: labor contracts, work permits, declarations and payment vouchers — for inspections, audits and finalization.

11. Practical case study

A foreign-invested manufacturer in a southern province hired 12 foreign experts on 24-month contracts. HR — accustomed to the old rules — registered social insurance for only the 8 whose contracts were expressly stated as 24 months, omitting 4 on 12-month contracts on the assumption that coverage required "more than 12 months". On inspection, the social insurance agency retroactively assessed social and health insurance for the 4 employees over 14 months plus late-payment interest, and recorded an administrative violation.

The lesson: "from 12 months" includes contracts of exactly 12 months — the phrase "từ đủ 12 tháng" (from full 12 months) in Article 2(2) of the 2024 Social Insurance Law and Article 12(1)(c) of the Health Insurance Law means 12 months or more. Employers should re-check all current 12-month contracts.

A second scenario: a foreign expert completes a 3-year contract; the work permit is not renewed and he returns home. The employer finalizes the book and guides him through the lump-sum claim at the social insurance agency — completed within weeks, with the employee receiving payment corresponding to 3 contribution years. This is the most common real-world application of Article 70(2) of the 2024 Social Insurance Law.

12. How this topic differs from related topics

To avoid confusion among labor-law topics in the cluster:

• This article (T-301) focuses on the three insurance schemes as they apply specifically to foreign employees: who must contribute, how much, and what benefits follow — centered on the differences from Vietnamese employees.
• T-323 — key changes under the 2024 Social Insurance Law: a comprehensive analysis of the 2024 Law's changes applying generally to all employers and employees (expanded coverage, adjusted benefit conditions, etc.). Read T-323 for the big picture; read T-301 for the foreign-employee application.
• T-318 (planned): an in-depth treatment of each social insurance benefit — sickness, maternity, occupational accidents, pensions, survivorship — with conditions and benefit levels.
• T-334 (planned): Vietnam's compulsory insurance schemes compared at a systemic level — how social, health and unemployment insurance differ in nature, coverage and rates.
• T-297 — work permits for foreign employees: the labor-law prerequisite before insurance obligations arise.
• T-298 — lawful termination of labor contracts: what employers must do on insurance when contracts end (finalizing books, guiding lump-sum claims).

13. Frequently asked questions

1. Does a foreign employee on a 6-month contract have to join social insurance?

No. Article 2(2) of the 2024 Social Insurance Law makes participation compulsory only for definite-term labor contracts of 12 months or more. Contracts under 12 months fall outside compulsory coverage. Since 1 July 2025, the health insurance threshold for foreign employees has likewise been aligned at 12 months (Article 12(1)(c) of the amended 2024 Health Insurance Law).

2. Are intra-corporate transferees subject to social insurance in Vietnam?

No. Point (a) of Article 2(2) of the 2024 Social Insurance Law excludes foreign employees transferred within an enterprise. The same group is excluded from health insurance under Article 12(1)(c) of the Health Insurance Law (as amended in 2024).

3. Can foreign employees receive unemployment benefits?

No. Under Article 2(1) and Article 43 of the 2025 Employment Law (74/2025/QH15), "employee" in the Employment Law means a Vietnamese citizen, so foreign employees are not covered by unemployment insurance — even though they participate in compulsory social and health insurance.

4. When a foreign employee leaves Vietnam, can they withdraw a lump-sum social insurance payment?

Yes, if they fall within one of the cases in Article 70(2) of the 2024 Social Insurance Law. Most commonly: termination of the labor contract, or expiry of the work permit, practice certificate or practice license without renewal. The employee files the lump-sum claim with the social insurance agency after participation ends.

5. What happens if an employer fails to register a foreign employee for social insurance?

The employer may face administrative sanctions under Decree 283/2026/ND-CP (effective 10/9/2026), plus retroactive collection of all unpaid social and health insurance contributions and late-payment interest. In cases of large-scale evasion or repeat violations after sanction, responsible individuals may face criminal liability under Article 216 of the 2015 Penal Code (as amended).

Language versions

References

• 2024 Social Insurance Law, No. 41/2024/QH15 (effective 01/07/2025) — full text at thuvienphapluat.vn
• 2008 Health Insurance Law, amended 2024 (Law No. 51/2024/QH15, effective 01/07/2025) — at thuvienphapluat.vn
• 2025 Employment Law, No. 74/2025/QH15 (effective 01/01/2026, replacing the 2013 Employment Law) — at thuvienphapluat.vn
• 2019 Labor Code, No. 45/2019/QH14 — at thuvienphapluat.vn
• Decree 219/2025/ND-CP (effective 07/8/2025, replacing Decree 152/2020/ND-CP) on foreign workers in Vietnam — at thuvienphapluat.vn
• Decree 283/2026/ND-CP on administrative sanctions in labor and social insurance (effective 10/9/2026, replacing Decree 12/2022/ND-CP) — at luatvietnam.vn

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FLAT Law Firm advises comprehensively on labor and insurance law for FDI enterprises in Vietnam — from work permits and labor contracts to social and health insurance compliance. Contact us for a review of your foreign workforce's insurance obligations. —