Vietnam’s 2024 Law on Social Insurance (effective 1 July 2025): key changes businesses must know

On 29 June 2024, at its 7th session, the 15th National Assembly passed Law No. 41/2024/QH15 on Social Insurance — the most significant social security legislation in a decade. The Law took effect on 1 July 2025 (Article 140), replacing in full the 2014 Law on Social Insurance (No. 58/2014/QH13) and Resolution No. 93/2015/QH13 on one-time social insurance benefits.

With 11 chapters and 141 articles (two more chapters and 16 more articles than its predecessor), the 2024 Law on Social Insurance introduces changes spanning expanded compulsory coverage, a lower pension contribution threshold, tougher evasion sanctions, and the gradual retirement of the "statutory pay rate" concept from social insurance calculations. For employers — particularly FDI enterprises with large workforces — this is not merely a policy update: it directly affects headcount costs, compliance obligations, and legal exposure. This article maps the core changes, compares them with the old regime, and sets out a practical compliance checklist.

Table of contents

1. Overview of the legislation
2. Key changes
3. Practical impact on businesses
4. Action items and timelines
5. Open points to monitor
6. Frequently asked questions

1. Overview of the legislation

• Full name: 2024 Law on Social Insurance.
• Number: 41/2024/QH15 — the official number published by the Office of the National Assembly, passed 29 June 2024.
• Effective date: 1 July 2025.
• Replaced instruments: Law on Social Insurance No. 58/2014/QH13 (expired 1 July 2025) and National Assembly Resolution No. 93/2015/QH13 of 22 June 2015 (expired 1 July 2025).
• Key implementing instruments: Decree No. 158/2025/ND-CP (detailed guidance on compulsory social insurance) and Decree No. 159/2025/ND-CP (guidance on voluntary social insurance).

A point on effectiveness that employers often misunderstand: the 2024 Law does not apply retroactively to entitlements that arose before 1 July 2025. Contribution periods accrued and benefits settled before the effective date remain recognized under the transitional provisions (Article 141). In other words, 1 July 2025 is a dividing line between two legal regimes — and several of the most important changes (notably lump-sum benefits) apply differently depending on whether an employee first joined before or after that date.

2. Key changes

2.1. Expanded compulsory coverage (Article 2)

This is the change with the most direct impact on employers' contribution obligations. The 2024 Law brings the following groups into compulsory social insurance:

• Owners of registered business households;
• Non-specialized personnel at commune level, in villages and residential groups;
• Part-time employees whose monthly salary meets or exceeds the minimum compulsory contribution base;
• Enterprise managers and cooperative executives who do not receive a salary.

Previously, these groups were either outside compulsory coverage or covered only on a voluntary basis. The consequence: the employer's "must-contribute" population is wider, and HR departments need to re-screen the entire headcount — including part-time staff and unpaid managers (a common profile in early-stage FDI companies, where directors or legal representatives do not yet draw a salary in Vietnam).

2.2. Pension threshold reduced: from 20 years to 15 years (Articles 64, 66, 98)

The most widely reported change: an employee participating in compulsory social insurance who stops working with at least 15 years of contributions (down from 20) is entitled to a monthly pension, provided they meet the retirement age under Article 169 of the Labor Code (Article 64(1)).

The accompanying benefit formula (Article 66):

• Female employees: 45% of the average contribution salary corresponding to 15 contribution years, plus 2% for each additional year, capped at 75%.
• Male employees: 45% corresponding to 20 contribution years, plus 2% per additional year, capped at 75%. For men with 15 to under 20 years: 40% corresponding to 15 years, plus 1% per additional year.
• Voluntary participants are subject to the same 15-year threshold (Article 98).

The policy intent is clear: widen pension access for workers with short or interrupted contribution histories — and reduce the incentive to cash out lump-sum benefits. For employers, the direct cost impact is limited, but the change affects retention strategy for older workers and retirement-benefit planning.

2.3. Tighter conditions for lump-sum benefits (Article 70)

This is the most debated change, and employers need to understand it precisely to advise their workforce:

• Employees first joining from 1 July 2025: the old right to withdraw a lump-sum benefit one year after leaving work is gone. A lump sum is available only in special cases: reaching retirement age with under 15 contribution years; settling abroad; critical illness (cancer, polio, decompensated cirrhosis, severe tuberculosis, AIDS); work-capacity loss of 81% or more; persons with particularly severe disabilities; and certain other statutory cases.
• Employees who contributed before 1 July 2025: retain the right to a lump sum after 12 months outside compulsory coverage and without voluntary participation, if their contribution period is under 20 years (Article 70(1)(dd); Decree 158/2025/ND-CP defines the 12 months as a continuous non-contribution period ending the month before the social insurance authority receives the file).

Those who do not take the lump sum may opt for a monthly allowance under Article 23 — a new benefit for persons reaching retirement age with under 15 contribution years.

2.4. "Reference level" replaces the "statutory pay rate" (Article 7, Article 141(13))

The 2024 Law introduces the "reference level": a monetary amount set by the Government, used to calculate contribution bases and certain benefit levels (Article 7). It is to be adjusted based on CPI growth, economic growth, and the capacity of the state budget and the social insurance fund.

Transitional rule (Article 141(13)): while the statutory pay rate has not been abolished, the reference level equals the statutory pay rate. The current statutory pay rate is VND 2,530,000/month (Decree No. 161/2026/ND-CP of 15 May 2026, effective 1 July 2026, replacing Decree No. 73/2024/ND-CP), so the current reference level is also VND 2,530,000. When the statutory pay rate is abolished, the new reference level must be no lower than that rate.

Practical effect: the compulsory contribution salary cap (20 times the reference level) currently equals VND 50.6 million/month; allowances previously expressed in "months of statutory pay rate" (e.g., the 10-month funeral allowance) are now expressed in reference levels.

2.5. Broader sickness and maternity benefits (Articles 42, 45, 50, 53)

• Sickness: extended to treatment for accidents on the reasonable commuting route and to organ/tissue donation, retrieval, and transplantation (Articles 42, 45).
• Maternity: surrogacy and intended parents through surrogacy are brought into maternity coverage (Article 50); a female employee may return to work before the end of her maternity leave while continuing to receive the maternity allowance for the remaining leave period (Article 53(1)) — materially more flexible than the old rule.
• Voluntary insurance gains a maternity allowance (Article 95): eligible participants receive VND 2,000,000 per child born (or per fetus of at least 22 weeks lost in utero or during labor), funded by the state budget with no additional contribution required.

2.6. Social pension allowance: eligibility age lowered from 80 to 75 (Articles 21, 22)

The Law builds a multi-tier social insurance system with a social pension allowance funded by the state budget — inheriting and developing the former monthly social allowance for the elderly. Notably, the eligibility age drops from 80 to 75 (poor and near-poor households: from 70 to under 75). This is primarily a welfare policy with limited direct impact on employers, but relevant context when advising older workers.

2.7. Supplementary pension insurance

The Law devotes a dedicated chapter to supplementary pension insurance — a voluntary, market-operated top-up to the basic pension under state management. This provides the legal framework for employers to design voluntary retirement programs (corporate pension schemes) as a talent-retention tool, an area that previously lacked a clear legal basis.

2.8. Tougher sanctions for late payment and evasion (Articles 39, 40, 41; Article 13(8))

The section FDI employers should read most carefully — exposure has moved up a notch:

• Definition of evasion (Article 39): 60 days after the payment deadline without registering (or incompletely registering) covered persons; registering a contribution salary below the prescribed level; failing to pay in full 60 days after the deadline despite reminders. Force majeure (natural disasters, fires, epidemics, etc.) does not constitute evasion.
• Late payment (Article 40): mandatory payment of the arrears plus an additional 0.03% per day on the late amount and days of delay; administrative sanctions; ineligibility for emulation titles and awards.
• Evasion (Article 41): same recovery and 0.03%/day mechanics, but the employer may face administrative sanctions or criminal prosecution (under Article 216 of the Penal Code).
• Compensation to employees (Article 13(8)): an employer that fails to fulfil its compulsory contribution obligations, harming employees' lawful rights and interests, must pay compensation as prescribed by law — a direct civil sanction the old law did not spell out.

Compared with the old regime (late-payment interest at twice the fund's average prior-year investment return), 0.03% per day (roughly 10.95% per annum on a simple basis) is a heavier, more predictable financial sanction that raises the cost of non-compliance.

Employers should also note Decree No. 274/2025/ND-CP (issued 16 October 2025, effective 30 November 2025), which details how late and evaded amounts and days are determined (including the point at which "late payment" becomes "evasion") and lists cases not treated as evasion due to force majeure (natural disasters, epidemics, fires, etc.).

2.9. Foreign employees and international treaties

The 2024 Law affirms protection of participation and benefit rights for Vietnamese employees working abroad and foreign employees working in Vietnam, including a mechanism to aggregate contribution periods in Vietnam and abroad for benefit eligibility where an international treaty to which Vietnam is a party so provides. For FDI employers routinely rotating specialists, this is worth monitoring as Vietnam negotiates further bilateral social security agreements.

Quick comparison: 2014 Law vs 2024 Law

3. Practical impact on businesses

1. Headcount costs may rise. Expanded compulsory coverage (Article 2) means positions previously outside contributions now trigger obligations: qualifying part-timers, unpaid managers, and — for companies with business-household structures in their chain — household owners. Employers should recalculate total employment cost.

2. Compliance risk has intensified. The 60-day trigger, 0.03%/day accrual, and potential criminal liability for evasion (Articles 39, 41) turn "delaying contributions to manage cash flow" — a common practice among smaller firms — into a high-risk gamble. The employee-compensation sanction (Article 13(8)) additionally opens the door to labor disputes claiming damages (e.g., lost maternity or sickness benefits caused by the employer's non-payment).

3. HR administration and records pressure. A changed contributor population, the reference level replacing the statutory pay rate in formulas, and a two-tier lump-sum regime (before/after 1 July 2025) all demand updated internal procedures, payroll software, and employee communications. Misclassification of covered persons can lead to multi-year recovery assessments.

4. Opportunity in supplementary pensions. The new framework lets employers design voluntary retirement programs as part of a competitive benefits package — particularly valuable for FDI employers competing for senior talent.

5. Impact on foreign staff. The treaty-based aggregation mechanism is a positive signal for cross-border mobility policies, though its practical effect awaits specific agreements.

4. Action items and timelines

Employers should proceed in the following priority order — most items have no statutory deadline as such, but every month of delay increases recovery exposure:

1. Re-screen the entire headcount under Article 2 (immediately). List part-time employees, unpaid managers, and any previously uncovered cases against the new compulsory categories. This is priority one because it drives monthly contribution obligations.
2. Register additional participants and adjust contribution bases (within 30 days of becoming covered). Register newly covered persons promptly; avoid hitting the 60-day mark in Article 39 (which triggers an evasion finding).
3. Update payroll formulas and HR software. Replace "statutory pay rate" references with the "reference level" in allowance calculations, the contribution cap (20 times the reference level), and internal procedures.
4. Communicate the lump-sum changes internally. Explain to employees — especially hires from 1 July 2025 — that the one-year withdrawal right no longer exists for them (save special cases), to prevent future grievances and disputes.
5. Check current payment status and clear arrears. Reconcile with the social insurance authority; where late payment exists, remedy it proactively before inspection — the 0.03%/day charge accrues daily.
6. Review labor contracts and collective agreements. Update clauses citing the 2014 Law and retirement-benefit policies; consider adding a supplementary pension program to the benefits package.
7. Set up a regulatory monitoring process. Decrees 158/2025/ND-CP and 159/2025/ND-CP are issued, but detailed circulars and the Government's decision on the reference level continue to be refined — assign ownership for tracking updates.

5. Open points to monitor

Consistent with the discipline of a legal update: the points below lack complete guidance or depend on enforcement practice, and employers should approach them cautiously and monitor developments rather than draw hard conclusions:

1. Reference level after abolition of the statutory pay rate. The Law states only the principle (Article 141(13)): the new reference level is set by the Government and must be no lower than the statutory pay rate at abolition. Any specific future figure circulating on social media should be verified against an official Government instrument before being used in calculations.
2. Contribution bases for newly covered groups. For business-household owners or unpaid managers, how the contribution salary is determined in each specific situation should be checked against implementing guidance — no single formula should be assumed for all cases.
3. Lump sums for employees spanning both periods. Article 70(1)(dd) preserves the 12-month withdrawal right for those with contribution time "before the Law's effective date"; Article 14 of Decree No. 158/2025/ND-CP clarifies that "12 months" means "12 consecutive months of non-contribution counted up to the month immediately preceding the month the social insurance agency receives the application". However, for employees who contributed both before and after 1 July 2025, practical application may be further clarified by the social insurance authority — seek advice before giving employees definitive answers.
4. The late-payment vs. evasion boundary and criminal prosecution. Article 39 lists evasion indicators and Article 41 opens the door to criminal liability; however, applying Article 216 of the Penal Code to a specific case (fault, mitigating circumstances, "legitimate reasons") is a case-by-case assessment — employers should not assume that a short delay is "harmless."
5. Bilateral social security agreements. Treaty-based period aggregation is a framework only; actual benefits for foreign employees depend on the conclusion and implementation of each specific agreement.

The legal content of this article is current as of its publication date. For company-specific situations, consult counsel to assess risk before acting.

6. Frequently asked questions

1. What is the number of the 2024 Law on Social Insurance, and when did it take effect? The 2024 Law on Social Insurance is Law No. 41/2024/QH15, passed by the 15th National Assembly on 29 June 2024 and effective from 1 July 2025, replacing the 2014 Law (No. 58/2014/QH13) and Resolution No. 93/2015/QH13.

2. From 1 July 2025, how many years of contributions are required for a pension? At least 15 years of contributions (down from 20), together with meeting the statutory retirement age under the Labor Code. This applies to both compulsory (Article 64) and voluntary (Article 98) participants.

3. Can employees who first join social insurance from 1 July 2025 withdraw a lump-sum benefit after one year off work? No. That group may receive a lump sum only in special cases under Article 70 (retirement age with under 15 contribution years, settling abroad, critical illness, work-capacity loss of 81% or more, etc.). Those who contributed before 1 July 2025 may still withdraw after 12 months if they have under 20 contribution years.

4. How is social insurance evasion penalized under the new law? The employer must pay the full evaded amount plus 0.03% per day on the evaded sum and days of evasion, face administrative sanctions or criminal prosecution, and is barred from emulation titles and awards (Article 41). The employer may also have to compensate affected employees (Article 13(8)).

5. Is the "reference level" just a renamed statutory pay rate? Not exactly. The reference level (Article 7) is a new concept set by the Government and adjusted with CPI and economic growth. During transition, while the statutory pay rate has not been abolished, the reference level equals it (VND 2,530,000/month) under Article 141(13).

Need a social insurance compliance review for your business?

The 2024 Law on Social Insurance is already in force — each month without a review is a month of accruing recovery and sanction exposure. FLAT LAW FIRM's labor team supports FDI enterprises in reviewing social insurance obligations, clearing arrears, and building sustainable compliance processes. Contact our hotline at 0988424851 for advice.

Language versions

References

• Law on Social Insurance No. 41/2024/QH15 (passed 29 June 2024, effective 1 July 2025).
• Law on Social Insurance No. 58/2014/QH13 (expired 1 July 2025).
• Resolution No. 93/2015/QH13 of the National Assembly, 22 June 2015 (expired 1 July 2025).
• Decree No. 158/2025/ND-CP detailing the Law on Social Insurance regarding compulsory social insurance.
• Decree No. 159/2025/ND-CP detailing the Law on Social Insurance regarding voluntary social insurance.
• Decree No. 161/2026/ND-CP on the statutory pay rate (VND 2,530,000/month from 1 July 2026; Decree No. 73/2024/ND-CP has been replaced).
• Decree No. 274/2025/ND-CP detailing late-payment and evasion of compulsory social and unemployment insurance (effective 30 November 2025).
• Labor Code 2019 (Article 169 — retirement age).
• Penal Code 2015, as amended 2017 (Article 216 — evasion of social, health, and unemployment insurance contributions).