UPDATE ON REGULATIONS REGARDING ALLOWANCES EXEMPTED FROM SOCIAL INSURANCE CONTRIBUTIONS

The determination of wages used as the basis for compulsory social insurance contributions is a key compliance issue for every enterprise in Vietnam. Incorrect classification of salary components may lead to back payments, administrative penalties, unplanned expenses, and potential labor disputes.

Under the Law on Social Insurance 2024, Decree No. 158/2025/ND-CP, and Circular No. 10/2020/TT-BLDTBXH, Vietnam has established a clearer legal framework distinguishing which payments are included and excluded from the social insurance contribution base — particularly concerning allowances, supplementary payments, and employee benefits.

This article provides a comprehensive analysis of:

• Legal definitions and guidance on which allowances are subject to or exempted from social insurance;

• Common misclassifications in payroll practices and their potential legal consequences;

• Practical implications and case studies from W&A’s advisory experience;

• Recommendations for HR and finance departments to ensure consistency between payroll, insurance, and labor records.

  
  

W&A also outlines practical compliance measures that businesses should adopt to mitigate risks — including regular policy reviews, contract standardization, documentation consistency, and proactive coordination with relevant authorities.

👉 Read the full article here:

W&A Newsletter on Allowances Not Subject to Compulsory Social Insurance Contributions (EN).

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W&A continues to accompany enterprises in ensuring HR, payroll, and social insurance compliance, helping businesses strengthen transparency, minimize legal risks, and foster sustainable growth.