New Regulations on Mandatory Social Insurance for Business Managers and Household Business Owners

Date: 2025.06.12

From July 1, 2025: Expansion of mandatory Social insurance – Key notes for employees and businesses

Social insurance (SI) is a vital component of Vietnam’s social security system, playing a key role in safeguarding income and health for the workforce. Beginning July 1, 2025, new regulations on mandatory SI will officially take effect, marking a major policy shift in Vietnam’s human resource landscape.

According to the new rules, mandatory SI will be expanded to include:

– Business managers, salaried or non-salaried

– Household business owners

These individuals are mandatory participation and will now be required to join, ensuring fairness in responsibilities and entitlements across the system.

In light of these changes, staying informed is critical for both workers and employers to adapt proactively.

Help All is committed to accompanying businesses and employees by providing timely updates and step-by-step guidance, helping all parties comply confidently and correctly with SI regulations.

1. Overview of Mandatory Social Insurance (SI)

Mandatory SI is a core public policy operated by the State to protect employees against risks such as illness, occupational accidents, maternity, and old age. It is an essential tool for maintaining quality of life, reducing financial hardship, and supporting sustainable social development.

Key benefits of mandatory SI include:

– Retirement benefits

Monthly pensions for employees upon retirement, ensuring a stable income after they are no longer able to work.

– Maternity leave

Support during pregnancy, childbirth, and early childcare, helping to reduce the economic burden on families.

– Work-related accidents and occupational diseases

Coverage for treatment and compensation during recovery in the event of workplace accidents or occupational illnesses

– Survivor benefits

Financial aid for families when an insured person passes away, helping them overcome economic hardship.

The role of Mandatory Social Insurance

These benefits make mandatory SI not just a protective mechanism for employees, but a foundation for stable, inclusive growth.

2. Legal basis and effective date for the expansion of mandatory SI

The amended Social Insurance Law (2024), effective from July 1, 2025, officially expands the scope of individuals required to participate in Mandatory Social Insurance (MSI). This is a significant step toward achieving universal MSI coverage under the National Social Security Strategy for 2021–2030.

New groups required to participate in MSI

*Business Managers: Under the new regulations, both salaried and non-salaried business managers are now required to participate in compulsory social insurance. This includes the following positions:

– Business managers;

– Supervisors, Members of the Supervisory Board;

– Representatives of state-owned capital or enterprise capital as prescribed by law;

– Members of the Board of Directors;

– Members of the Supervisory Board or supervisors, and other elected managerial positions in cooperatives and unions of cooperatives, as regulated by the Law on Cooperatives;

– Other managerial positions as defined by law.

* Business household owners are also subject to mandatory SI

In addition, household business owners — if registered and subject to tax declaration under the standard method — must also participate in MSI like regular employees.

3. Mandatory social insurance contribution: What businesses and household businesses need to know

One of the most common questions when applying the new regulation is: How much is the monthly mandatory social insurance contribution?
The answer depends on the statutory base salary and the applicable MSI contribution rate.

Point d, Clause 1, Article 31 of the 2024 Social Insurance Law stipulates the basis for compulsory social insurance contributions as follows:
The salary shall be the basis for compulsory social insurance contributions. In particular, individuals specified at Points g, h, m, and n, Clause 1, Article 2 of this Law may choose the salary on which contributions are based, but the minimum must be equal to the reference wage and the maximum shall not exceed 20 times the reference wage at the time of payment.

At the same time, pursuant to Article 32 and Points a and b, Clause 4, Article 33 of the 2024 Social Insurance Law, the contribution rates for compulsory social insurance are as follows:

– 3% to the Sickness and Maternity Fund

– 22% to the Retirement and Survivorship Fund
Business managers and household business owners may choose to pay monthly, every 3 months, or every 6 months depending on their needs.

Accordingly, individuals may choose a salary as the basis for compulsory social insurance contributions, provided that it is no less than the reference wage and no more than 20 times the reference wage at the time of payment. The monthly contribution amount is calculated based on the chosen salary.

Reference wage ≤ Salary used for SI contribution by household business owner ≤ 20 × Reference wage

Clause 13, Article 141 of the 2024 Social Insurance Law also defines the reference wage as follows:
When the basic wage has not yet been abolished, the reference wage under this Law is equal to the basic wage. At the time the basic wage is abolished, the reference wage must not be lower than the last applied basic wage.

Currently, according to Article 3 of Decree No. 73/2024/NĐ-CP, the basic wage being applied is VND 2,340,000/month. Therefore, the reference wage stipulated in the 2024 Social Insurance Law is VND 2,340,000/month.

📌 Example:
Minimum MSI contribution
= 25% × 2,340,000 VND
= VND 585,000/month

This contribution will be higher if the actual income exceeds the base salary.
A significant cost but major benefits

For small-scale household businesses, this could be a notable cost. However, it comes with crucial benefits such as:

– Retirement pensions

– Sick leave

– Maternity leave

– Occupational accident coverage

These benefits support long-term social security and provide a stable financial foundation in retirement or during work-related hardships.

4. Impacts and implications of the new mandatory social insurance regulation from July 1, 2025

The expansion of MSI coverage from July 1, 2025, will lead to significant changes for both enterprises and household business owners.

Impacts on businesses:

– Higher internal HR costs: Employers will need to contribute MSI for salaried managers, increasing budget allocations for payroll and insurance.

– Internal system review required: Companies must review and adjust employment contracts, payroll policies, and accounting systems to:

+ Ensure compliance with MSI regulations

+ Avoid retroactive collections or administrative penalties

Impacts on household business owners:

– Reduced profit and personal finances: Regular MSI contributions may lower monthly profits for small household businesses.

– Long-term social security benefits: Despite the costs, household business owners will be entitled to full benefits, including:

– Retirement pensions

– Support during illness, maternity, and accidents

– Survivor benefits

Participating in MSI is not only a legal obligation but also a way to secure financial protection for both individuals and their families in the future.

5. Key considerations for businesses and household enterprises when applying mandatory social insurance

When the expanded MSI regulation takes effect on July 1, 2025, both enterprises and household businesses must proactively prepare to comply with the law and optimize their social security benefits.

a. Stay updated on new legal regulations regarding SI

– Actively monitor the latest legal documents, including:
+ The amended Social Insurance Law
+ Implementation decrees
+ Relevant circulars

– Clearly understand the rules related to:

+ MSI contribution rates

+ Eligible participants

+ Effective dates

Grasping your obligations and entitlements will help avoid misunderstandings and errors during implementation.

b. Adjust HR and accounting systems

– Review and update various contracts, including:

+ Employment contracts

+ Management service contracts (if any)

– Ensure all individuals subject to MSI are accurately and completely declared in the records.

– Perform payroll and contribution calculations transparently, adhering to correct rates to avoid under-reporting or omissions.

c. Plan financial resources for household businesses

– Estimate and budget for monthly MSI contributions, especially important for small household businesses.

– Proactively allocate financial resources to ensure timely contributions and avoid penalties or benefit loss.

– Consider this a long-term investment in retirement, maternity, accident coverage, and overall social protection.

6. Conclusion

The new regulation expanding mandatory social insurance is a necessary step toward building a more inclusive and equitable social security system. While it may bring financial and operational pressures, it also presents an opportunity for both businesses and household enterprises to enhance awareness and protection of long-term worker benefits — including their own.

Amid multiple simultaneous legal changes, having accurate information and being well-prepared are crucial for effective adaptation.
As your trusted partner, Help All is committed to supporting businesses and individuals in staying up-to-date and compliant — ensuring that SI implementation is smooth, transparent, and lawful.