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 regimes. Especially, the reference level directly affects SI regimes such as retirement pensions, maternity allowances, funeral allowances, monthly survivor’s allowances, and convalescence allowances.
In particular, the application of the reference level instead of the base salary makes the allowances more flexible and suitable 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 welfare system, fairness, 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 2024 SI Law, which took effect on May 1, 2025, the reference level is defined as follows:
– The reference level is the amount decided by the Government to calculate contribution rates and benefit levels of some SI regimes.
– The reference level is adjusted based on the consumer price index, economic growth, and the capacity of the state budget and the SI fund.
– When the base salary is not abolished, the reference level is equal to the base salary. At the time the base salary is abolished, the reference level shall 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 by the reference level to calculate contribution rates and benefit levels of some social insurance regimes, the reference level shall not be lower than the base salary, i.e., 2,340,000 VND.
The switch to the reference level will affect some SI regimes. Especially from July 1, the SI Law 2024 will officially take effect, and the reference level will have a significant impact on many SI regimes that workers need to know.
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What are the compulsory SI contribution rates from July 1, 2025?
According to the regulations in Article 32 of the SI Law 2024:
SI contribution rates
1. Compulsory SI contribution rates include:
a) 3% of the salary basis for SI contribution to the sickness and maternity fund;
b) 22% of the salary basis for SI contribution to the retirement and survivor benefit fund.
2. The voluntary SI contribution rate is 22% of the income basis for SI contribution to the retirement and survivor benefit fund.
Thus, the compulsory SI contribution rates include:
3% of the salary basis for SI contribution to the sickness and maternity fund;
22% of the salary basis for SI contribution to the retirement and survivor benefit fund.
What is the basis for compulsory SI contribution?
According to Clause 1, Article 31 of the SI Law 2024, the basis for compulsory SI contribution is prescribed as follows:
– For employees under the State salary regime, the basis for SI contribution is the monthly salary according to positions, ranks, levels, military ranks, and allowances for positions, seniority allowances exceeding the framework, seniority allowances, and coefficient of salary retention (if any);
– For employees under the salary regime decided by the employer, the basis for compulsory SI contribution is the monthly salary, including the salary according to jobs or positions, salary allowances, and other supplements that are regularly and stably agreed upon in each salary payment period.
In case the employee stops working but still receives a monthly salary equal to or higher than the lowest basis for compulsory SI contribution, the contribution shall be based on the salary received during the period of work stoppage;
– For subjects specified at Points d, e, and k, Clause 1, Article 2 of the SI Law 2024, the basis for compulsory SI contribution shall be prescribed by the Government;
– Subjects specified at Points g, h, m, and n, Clause 1, Article 2 of the SI Law 2024 can choose the basis for compulsory SI contribution but not lower than the reference level and not higher than 20 times the reference level at the time of contribution.
After at least 12 months of implementing SI contribution based on the chosen basis, the employee can choose the basis for SI contribution again;
– The basis for compulsory SI contribution shall be no lower than the reference level and no higher than 20 times the reference level at the time of contribution.
