News

Reduce the rate of social insurance contributions paid by employers from June 1st, 2017

Decree 44/2017 / ND-CP issued by the Government stipulating compulsory social insurance contribution to the Occupational accident and disease insurance Fund will be effective from June 1st, 2017, abrogating the provisions in Article 4 and Clause 1 of Article 34 of Decree 37/2016/ND-CP:

Article 3. Rate and payment methods of contribution to the occupational accident and disease insurance fund

1. Employers shall monthly contribute to the occupation accident and disease insurance fund specified in Clause 3 Article 44 of the Law on occupational safety and hygiene with the rates as follows:

a) 0.5% of the salary fund for the employees specified in Point a, b, c, d, dd and h Clause 1 Article 2 of the Law on social insurance on which the social insurance premiums are based, except for domestic caretakers.

b) 0.5% of the statutory pay rate applied to the employee specified in Point e Clause 1 Article 2 of the Law on social insurance.

3. Based on the capacity for balancing the insurance fund for occupational accidents and occupational diseases, the Government shall adjust the insurance fund for occupational accidents and occupational diseases premium rates specified in Clause 1 of this Article by January 1, 2020.

Therefore, from June 1st, 2017, the total rate of social insurance contribution paid by Employer (including Social insurance, Health insurance and Unemployment Insurance) will be reduced to 21.5% (new rate), instead of 22% (current). The total rate of social insurance contribution paid by Employee is kept the same – 10.5% as current. With this new provision, enterprises can reduce labor costs and restrict layoffs in the difficult economic situation.

By Marketing Department – Kizuna JV Corporation

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