From July 1, 2025, is it mandatory to pay social insurance for unpaid LLC Directors?
From 01/07/2025, are directors of LLCs who do not receive salaries required to pay social insurance? Will social insurance contributions be deducted when calculating personal income tax? To know whether from July 1, 2025, the director of a limited liability company that does not receive a salary is required to pay social insurance or not, you can refer to the following regulations with S4B Vietnam.
I) According to Clause 1, Article 2 of the Law on Social Insurance 2024 (effective from July 1, 2025), the following provisions are stipulated:
Subjects participating in compulsory social insurance and voluntary social insurance
Employees who are Vietnamese citizens and are subject to compulsory social insurance include:
- Enterprise managers, controllers, representatives of state capital, representatives of enterprise capital as prescribed by law; members of the Board of Directors, General Directors, Directors, members of the Board of Supervisors or controllers and other elected management positions of cooperatives and cooperative unions as prescribed by the Law on Cooperatives with salaries;
- Non-professional workers at the commune level, in villages and residential groups;
- The subjects specified in Point a of this Clause work part-time, with monthly salary equal to or higher than the lowest salary used as the basis for compulsory social insurance;
- Business household owners of business households with business registration participating in accordance with Government regulations;
- Enterprise managers, controllers, representatives of state capital, representatives of enterprise capital as prescribed by law; members of the Board of Directors, General Directors, Directors, members of the Board of Supervisors or controllers and other elected management positions of cooperatives and cooperative unions as prescribed by the Law on Cooperatives do not receive salaries.
II) Accordingly, from July 1, 2025, enterprise managers who do not receive salaries are subjects participating in compulsory social insurance.
Clause 24, Article 4 of the Enterprise Law 2020 stipulates:
24. An enterprise manager is a private enterprise manager and a company manager, including a private enterprise owner, a general partner, a Chairman of the Board of Members, a member of the Board of Members, a company Chairman, a Chairman of the Board of Directors, a member of the Board of Directors, a Director or General Director and an individual holding another management position as prescribed in the Company Charter.
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Thus, from July 1, 2025, a Director of a limited liability company who does not receive a salary must still pay compulsory social insurance according to the law.
III) From July 1, 2025, what benefits will social insurance participants have?
According to Clause 1, Article 10 of the Law on Social Insurance 2024, social insurance participants have the following rights:
- Enjoy social insurance benefits according to the provisions of this Law;
- Be granted a social insurance book;
- Be provided with monthly information on social insurance payments by the social insurance agency via electronic means; have social insurance agency confirm information on social insurance payments upon request;
- Request employers and relevant agencies and organizations to fully perform their social insurance responsibilities towards them according to the provisions of law;
- Be disseminated and disseminated policies and laws on social insurance;
- Proactively go for a medical examination to determine the level of reduced working capacity if you are in a case of reserving your social insurance payment period and receive payment for the medical examination fee when the medical examination results meet the conditions for enjoying social insurance benefits according to the provisions of the Social Insurance Law 2024
- Complain, denounce and file a lawsuit regarding social insurance according to the provisions of law.
IV) Are social insurance contributions deductible when calculating personal income tax?
Pursuant to Clause 2, Article 9 of Circular 111/2013/TT-BTC amended by Article 15 of Circular 92/2015/TT-BTC, the following deductions are stipulated:
Deductions for insurance contributions, Voluntary pension funds
a) Insurance contributions include: social insurance, health insurance, unemployment insurance, professional liability insurance for some occupations that must participate in compulsory insurance.
b) Contributions to the voluntary pension fund and purchase of voluntary pension insurance
The amount of contributions to the voluntary pension fund and purchase of voluntary pension insurance are deducted from taxable income according to actual occurrence but not exceeding one (01) million VND/month for employees participating in voluntary pension products according to the guidance of the Ministry of Finance, including the amount paid by the employer for the employee and the amount paid by the employee himself/herself (if any), including cases of participation in multiple funds. The basis for determining deductible income is a photocopy of the payment (or fee) voucher issued by the voluntary pension fund or insurance company
Therefore, according to the above provisions, social insurance contributions will be deducted when calculating personal income tax according to the provisions of law.
We hope the article above about latest social insurance regulations is helpful to our beloved readers! If your company is looking to ensure that employment contracts meet Vietnam’s labor law requirements and best social insurance, S4B Vietnam is here to help. Our expert team offers end-to-end HR solutions, including contract drafting, legal compliance, payroll tax audits, social insurance and employee management. Contact S4B Vietnam today for professional support tailored to employee social insurance.
S4B Vietnam
- Address: Unit 602A, Tower A, Handi Resco Office Building. 521 Kim Ma Street, Ba Dinh District, Hanoi
- Tel: + 84 24 3974 4181
- Email: service@s4b.com.vn
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