“From July 1st: Coffee Shop and Convenience Store Owners are Now Mandatory Participants in Social Insurance – How Much are the Contributions?”

The Social Insurance Law of 2024 will come into effect on July 1, 2025, marking a significant step forward in完善ing Vietnam’s social security system. The new law introduces breakthrough changes, especially in expanding social insurance coverage, including a provision to make it mandatory for registered business owners to participate in social insurance. These innovations not only enhance the welfare of workers but also contribute to building a多-layered social insurance system, aiming for the goal of全民 social security coverage.

Coffee shop and grocery store owners must also pay mandatory social insurance

One of the key focuses of the 2024 Social Insurance Law is to expand the scope of mandatory social insurance participants, thereby ensuring social welfare for more groups of workers, especially those in the非-formal sector or with non-traditional employment relationships. According to Article 2 of the 2024 Law, the newly added groups of subjects include:

Registered business owners:

For the first time, business owners who are required to register are included in the group of mandatory social insurance participants. This regulation applies to more than 5 million registered business households in Vietnam, equivalent to millions of self-employed people who can now access social insurance benefits.

Business owners will contribute 3% of their salary to the sick and maternity fund and 22% to the retirement and survivor fund, on a monthly, quarterly, or semi-annual payment basis.

Part-time workers: Employees with labor contracts of one month or more, working part-time, and with a salary equal to or higher than the minimum wage are also subject to mandatory participation.

This protects the welfare rights of part-time workers, who often lack social security保障.

Non-specialist staff at the commune, village, and ward levels: This group is now entitled to full social insurance benefits, including sick and maternity leave, instead of just retirement and survivor benefits as before.

Enterprise and cooperative managers who do not receive salaries: This includes positions such as members of the Board of Directors, General Directors, Directors, inspectors, or state capital representatives in enterprises, cooperatives, and cooperative alliances, who, if they do not receive salaries, must also participate in social insurance.

Other flexible subjects: The law authorizes the National Assembly Standing Committee to decide on the addition of other groups of subjects with stable jobs and incomes, based on proposals from the Government, to suit the changing nature of employment relationships and socio-economic conditions in the future.

This expansion aims to narrow the social security gap between different groups of workers, especially the self-employed and those in the非-formal sector, who make up a large proportion of Vietnam’s workforce.

Mandatory Social Insurance Contribution Rate for Business Owners

According to Point d, Clause 1, Article 31 of the 2024 Social Insurance Law, the basis for social insurance contributions is as follows:

Basis for social insurance contributions

1. The salary basis for mandatory social insurance contributions is prescribed as follows:

…

d) The subjects specified at Points g, h, m, and n, Clause 1, Article 2 of this Law shall choose the salary basis for mandatory social insurance contributions, but the lowest shall be equal to the reference level and the highest shall not exceed 20 times the reference level at the time of contribution.

Thus, business owners can choose the salary basis for social insurance contributions, but the lowest shall be equal to the reference level and the highest shall not exceed 20 times the reference level at the time of contribution.

Reference level ≤ Business owner’s contribution basis ≤ 20 times the reference level.

Therefore, the lowest monthly contribution rate for business owners participating in social insurance is 25%, i.e., 585,000 VND.