NEW POLICY ON SALARY USED AS BASE FOR SOCIAL INSURANCE CONTRIBUTION: TIMELY GUIDANCE TO ADDRESS CHALLENGES TO ENTERPRISES
From July 1, 2025, the 2024 Social Insurance Law together with Decree No. 158/2025/NĐ-CP (“Decree 158”) have officially taken the effect, marking an important shift in determining the salary as base for compulsory social insurance (SI) contributions. While this step aims to harmonize the legal framework, it also raises many questions for enterprises during the initial implementation phase.
According to Decree 158, the salary base for SI contributions consists of three groups: (1) Salary based on work or job title; (2) salary-based allowances to compensate for working conditions, job complexity, living factors, or to attract employees; and (3) other additional payments, provided they are clearly defined, stated in the labor contract, and paid regularly in each salary period. However, in practice, businesses have been uncertain whether welfare benefits such as bonuses, housing allowance, transportation allowance, or phone allowance must be included in the SI contribution base from July 1, 2025 or not. The main reason lies in the general wording of Decree 158, while previous guiding documents have expired.
Against this backdrop, on September 5, 2025, the Official Letter No. 1198/CTL&BHXH-BHXH issued by the Department of Wage and Social Insurance serves as a timely “solution.” The Letter confirms that welfare benefits listed as a separate section in the labor contract (pursuant to Clause 5, Article 3 of Circular 10/2020/TT-BLĐTBXH) will not be included in the SI contribution base. In other words, items such as bonuses under the Labor Code, innovation bonuses, meal allowances, support for fuel, telephone, commuting, housing, childcare, dependent care, as well as support in cases of family bereavement, marriage, birthday, hardship allowances for occupational accidents or diseases, and other welfare/assistance payments specified in a separate section will continue not to be counted toward SI contributions, consistent with the rules prior to July 1, 2025.
This guidance helps enterprises eliminate concerns about misapplying regulations, while also providing a solid legal foundation to build transparent and reasonable labor–wage policies. In essence, Official Letter 1198 was issued at the right time—removing procedural uncertainties and contributing to a fairer, more transparent, and practical working environment. In the long run, consistent application of SI salary base rules will help both Government agencies and enterprises minimize risks, enhance management efficiency, and reaffirm the Government’s commitment to building a sustainable social security system aligned with economic development.
Contact Information
Mr. Nguyen Bao Anh – Deputy General Director in charge of Tax, Transfer Pricing & Outsourcing Services
Email: anh.nb@a-c.com.vn
