Increased social insurance rates for foreign workers next year

VIETNAM: Effective from January 1, 2022, foreign workers in Vietnam will be subject to an increased 8% social insurance rate, while their employers will also have to contribute 17.5% of their salaries to the social insurance fund.

This mandatory social insurance plan is intended to cover sickness, maternity, occupational diseases, retirement, accidents and workplace deaths.

While the social insurance rate hike will help to bring parity between the costs of local and foreign employees, many business leaders say it will be an unnecessary cost burden.

While some of this may be offset by tax incentives related to the pandemic, businesses will have to factor in additional compliance costs as firms reorient their labour forces to accommodate the new policy.

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