Officially abolishing the base salary of 2.34 million VND
From July 1, 2025, the Social Insurance Law (SI) 2024 (No. 41/2024/QH15) officially takes effect, replacing the SI Law 2014. One of the important changes is the replacement of the concept of the “base salary” with a “reference level” to calculate contribution rates and benefits of SI policies. Especially, the reference level directly affects SI policies such as retirement pensions, maternity, funeral, and monthly survivor allowances, as well as health recovery allowances.
Using the reference level instead of the base salary makes the allowances more flexible and adaptable to the economic reality, ensuring the practical value of SI benefits. These policies not only encourage long-term SI participation among workers but also build a multi-layered and equitable welfare system, contributing to improving the quality of life and social stability in the context of Vietnam’s aging population.
According to Article 7 and Clause 13 of Article 141 of the SI Law 2024, which took effect on May 1, 2025, the reference level is defined as follows:
– The reference level is the amount decided by the Government and used to calculate contribution rates and benefit levels for certain SI policies.
– The reference level is adjusted based on the consumer price index, economic growth, and the capacity of the state budget and the SI fund.
– Until the base salary is abolished, the reference level is equal to the base salary. When the base salary is abolished, the reference level will not be lower than that base salary.
Currently, the base salary is 2,340,000 VND/month (according to Clause 2, Article 3 of Decree 73/2024/ND-CP).
Accordingly, from July 1, 2025, when the base salary is abolished and replaced with the reference level to calculate contribution rates and benefit levels for some social insurance policies, the reference level will not be lower than the base salary, i.e., 2,340,000 VND.
The transition to the reference level will affect some SI policies. Especially from July 1, the SI Law 2024 will officially take effect, and the reference level will have a significant impact on many SI policies that workers need to know.
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What are the mandatory social insurance contribution rates from July 1, 2025, and what do they include?
According to the provisions of Article 32 of the SI Law 2024:
Social Insurance Contribution Rates
1. The mandatory social insurance contribution rates include:
a) 3% of the salary basis for sick leave and maternity insurance;
b) 22% of the salary basis for retirement and survivor insurance.
2. The voluntary social insurance contribution rate is 22% of the income basis for retirement and survivor insurance.
Thus, the mandatory social insurance contribution rates include:
3% of the salary basis for sick leave and maternity insurance;
22% of the salary basis for retirement and survivor insurance.
How is the salary basis for mandatory social insurance contributions determined?
According to Clause 1, Article 31 of the SI Law 2024, the salary basis for mandatory social insurance contributions is as follows:
– For employees under the state salary scheme, the salary basis for social insurance contributions includes the monthly salary according to their position, rank, grade, military rank, and allowances for position, seniority beyond the framework, professional seniority, and salary preservation coefficient (if any);
– For employees under the salary scheme decided by the employer, the salary basis for mandatory social insurance contributions includes the monthly salary, consisting of the salary according to the job or position, salary allowances, and other regular and stable supplements agreed upon in each salary payment period.
In case an employee stops working but still receives a monthly salary equal to or higher than the lowest mandatory social insurance contribution basis, the contribution shall be based on the salary received during the period of work stoppage;
– For subjects specified in points d, e, and k of Clause 1, Article 2 of the SI Law 2024, the salary basis for mandatory social insurance contributions shall be determined by the Government;
– Subjects specified in points g, h, m, and n of Clause 1, Article 2 of the SI Law 2024 can choose the salary basis for mandatory social insurance contributions, but it must be at least equal to the reference level and not more than 20 times the reference level at the time of contribution.
After at least 12 months of contributing social insurance based on the chosen salary basis, the employee can choose the salary basis for social insurance contributions again;
– The salary basis for mandatory social insurance contributions must be at least equal to the reference level and not more than 20 times the reference level at the time of contribution.
