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Under Clause 2, Article 2 of the 2024 Law on SI, Workers who are foreign citizens working in Vietnam shall be covered by compulsory social insurance if they work for a Vietnamese employer under definite-term labor contracts with a term of 12 months or more. However, this provision is not applied to intra-corporate transferees; persons who, at the time of entering into the employment contract, have reached the retirement age specified in Clause 2, Article 169 of the Labor Code; or cases where a treaty to which Vietnam is a member provides otherwise.

For foreign employees subject to compulsory SI, the salary used as the basis for SI contributions is determined according to the salary regime decided by the employer. Under Article 7 of Decree No. 158/2025/ND-CP, the monthly salary used as the basis for SI contributions comprises the salary according to the job or position, salary allowances, and other additional amounts. Of these the salary for the job or position is determined based on the time worked in the job or position according to the salary scale and salary table developed by the employer and agreed upon in the employment contract. Salary allowances intended to compensate for factors relating to working conditions, the complexity of the job, living conditions, and labor attraction that have not been included in, or have not been fully included in, the salary are also included in the salary used as the basis for SI contributions if agreed upon in the employment contract.

In addition, the salary used as the basis for SI contributions also includes other additional amounts that are specifically determined in terms of monetary amounts and are paid regularly and consistently in each pay period. Conversely, allowances or additional amounts that depend on or fluctuate according to labor productivity, the working process, or the quality of the employee’s work performance are not included in the salary used as the basis for SI  contributions.

One matter that enterprises employing foreign workers whose salaries are paid in foreign currencies need to focus on is the conversion of salaries into Vietnamese Dong. Under Clause 5, Article 7 of Decree No. 158/2025/ND-CP, where the salary stated in the employment contract and the salary paid to the employee are denominated in a foreign currency, the salary used as the basis for SI  contributions shall be calculated in Vietnamese Dong based on the foreign-currency salary converted using the average of the bank-transfer buying rates for the foreign currency against the Vietnamese Dong, as announced by four state-owned commercial banks. The exchange rate is determined at the end of the day on January 2 for application during the first six months of the year and at the end of the day on July 1 for application during the last six months of the year. If these dates fall on a public holiday or a day off, the exchange rate of the immediately following working day shall be used.

The salary used as the basis for SI  contributions must also comply with the limits prescribed by the 2024 Law on SI. Accordingly, the minimum salary used as the basis for contributions is equal to the reference level applicable at the time of contribution, and the maximum is 20 times the reference level. During the period when the statutory base salary has not yet been abolished, the reference level shall be determined as the statutory base salary in accordance with the law.

Regarding implementation responsibilities, employers are responsible for correctly determining the salary used as the basis for SI contributions, deducting the employees’ share of SI contributions and remitting it together with the employer’s own contributions to the SI fund in accordance with regulations.. Enterprises should also regularly review employment contracts, salary structures, allowances, additional amounts, and foreign exchange rates to ensure that the amount of SI  contributions is determined accurately.

Enterprises need to accurately update foreign exchange rates at the specified times in January and July each year to ensure accurate calculation of SI contribution amounts for foreign workers accurately, thereby limiting the risk of underpayment or late payment./.