Social insurance law updates vietnam 2026
The Ministry of Labour, Invalids and Social Affairs has just announced an adjustment to the wage and income adjustment rate for social insurance contributions (also known as the inflation adjustment factor) to compensate for the devaluation of the currency at previous social insurance contribution periods. Below are the details of social insurance law updates vietnam 2026
1. Updated Social Insurance Inflation Adjustment Factor for 2026
On January 10, 2025, the Ministry of Labour, Invalids and Social Affairs issued Circular No. 01/2025/TT-BLĐTBXH regulating the social insurance inflation adjustment factor for 2025, applicable from January 1, 2025 to December 31, 2025.
The inflation adjustment factor is important in compensating for the devaluation of the currency over time, ensuring the rights of social insurance participants. According to Circular 01/2025/TT-BLDTBXH, the new social insurance inflation adjustment coefficients for 2025 will be adjusted according to the average annual consumer price index, including:
- The inflation adjustment coefficient for monthly wages used for compulsory social insurance;
- The inflation adjustment coefficient for monthly income used for voluntary social insurance.
For employees who have both periods of social insurance contributions under the state-regulated wage system and periods of social insurance contributions under the employer-determined wage system, the monthly wages used for social insurance contributions for employees who started participating in social insurance under the state-regulated wage system from January 1, 2016 onwards, and the monthly wages used for social insurance contributions under the employer-determined wage system will be adjusted according to regulations.
SI compliance risks for FDI companies
2. Subjects and Timeframe for Applying the Social Insurance Inflation Adjustment Factor
Based on the provisions of Article 1 of Circular 01/2023/TT-BLDTBXH, the subjects to whom the social insurance inflation adjustment factor applies are those whose monthly salary/income has been used for social insurance contributions as follows:
- Employees subject to the salary regime regulated by the State who began participating in compulsory social insurance from January 1, 2016 onwards, receiving a lump-sum social insurance payment or whose dependents receive a lump-sum death benefit upon death.
- Employees paying compulsory social insurance contributions based on the salary regime determined by the employer, receiving a pension, a lump-sum retirement benefit, a lump-sum social insurance payment, or whose dependents receive a lump-sum death benefit upon death.
- Individuals participating in voluntary social insurance who receive a pension, a lump-sum retirement benefit, a lump-sum social insurance payment, or whose dependents receive a lump-sum death benefit upon death.
Applicable period: From January 1, 2023 to December 31, 2023.
3. Which amounts are affected by the Social Insurance Inflation Adjustment Factor?
The Social Insurance Inflation Adjustment Factor is one of the bases for employee contribution calculation rules on monthly salary/income subject to Social Insurance contributions for employees.
Adjusted monthly salary/income subject to Social Insurance contributions for each year
=
Total monthly salary subject to Social Insurance contributions for each year x
Adjustment amount of salary subject to Social Insurance contributions for the corresponding year
According to social insurance advisory services vietnam, the average monthly salary/income subject to Social Insurance contributions (Mbqtl) is calculated as follows:
Mbqtl = Total adjusted monthly salary subject to Social Insurance contributions / Total number of months of Social Insurance contributions.
Based on that, the following social insurance benefits, calculated based on the average monthly salary/income subject to social insurance contributions, will change (increase) when the inflation adjustment factor changes (increases):
Social insurance advisory services vietnam
3.1. Lump-sum social insurance payment
Lump-sum social insurance benefit amount = (1.5 x Average monthly salary/income x Social insurance contribution period before 2014) + (2 x Average monthly salary/income x Social insurance contribution period after 2014)
3.2. Monthly pension
Pension = Benefit rate x Average monthly salary/income
3.3. One-time retirement allowance
- Target group: Employees with a social insurance contribution period exceeding the number of years corresponding to a 75% pension benefit rate.
- The one-time allowance is calculated based on the number of years of social insurance contributions exceeding the number of years corresponding to a 75% pension benefit rate. For each year of contribution, the allowance is calculated as 0.5 months of the average monthly salary/income subject to social insurance audit vietnam.
One-time benefit = 0.5 x Average monthly salary
3.4. Increase in one-time death benefit:
- For pensioners who die:
Benefit amount = 48 x Pension – 0.5 x (Number of months receiving pension – 2) x Pension - For employees who are contributing to social insurance or are preserving their contribution period and die:
Benefit amount = 1.5 x Average monthly salary x Number of years contributing to social insurance before 2014 + 2 x Average monthly salary x Number of years contributing to social insurance from 2014 onwards.
The above details the regulations for SI compliance risks for FDI companies on increasing the social insurance inflation adjustment factor in 2026. Hopefully, this information will be helpful for employees when calculating their benefits.
For support and consultation on mandatory insurance contributions for foreigners, please contact S4B Vietnam.
>>>Read more: Business setup vietnam – Vietnam’s preferential tax policies for FDI
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