In what cases can the regional minimum wage be used to pay social insurance?

Article overview

Using the regional minimum wage to pay social insurance helps workers ensure their legal rights and enjoy basic insurance benefits. Applying this salary not only helps reduce the financial burden on employers but also protects the rights of employees in case of sick leave, maternity leave or job loss. The following article will provide information about cases where the regional minimum wage can be used to pay social insurance.

Use the regional minimum wage to pay social insurance
Use the regional minimum wage to pay social insurance

Current regional minimum wage regulations

According to Article 3 of Decree 74/2024/ND-CP regulating regional minimum wages applicable from July 1, 2024. The regional minimum wage is divided into 4 regions with the highest level being 4,960,000 VND/month. Zoning is based on the socio-economic development conditions of each locality.

The regional minimum wage is specifically regulated as follows:

  • Region I: 4,960,000 VND/month (23,800 VND/hour)
  • Region II: 4,410,000 VND/month (21,200 VND/hour)
  • Region III: 3,860,000 VND/month (18,600 VND/hour)
  • Region IV: 3,450,000 VND/month (16,600 VND/hour).

The regional minimum wage applies to employees working under labor contracts according to the provisions of the Labor Code. Enterprises must ensure that the salary paid to employees is not lower than the regional minimum wage.

Regulations on compulsory social insurance payment rates

Rates for employees

According to Article 85 of the Law on Social Insurance 2008, amended and supplemented in 2014, employees must pay mandatory social insurance payments as follows:

  • Social insurance: 8% of monthly salary.

The monthly salary as a basis for social insurance payment is not lower than the regional minimum salary.

Social insurance payment rate of employees
Social insurance payment rate of employees

Rates for employers

Employers are responsible for paying:

The employer makes monthly contributions to the employee’s social insurance salary fund specified in Points a, b, c, d, đ and h, Clause 1, Article 2 of the Law on Social Insurance 2008, amended and supplemented in 2014 as follows:

  • 3% to the sickness and maternity fund;
  • 14% goes to retirement and death funds.

Reference content: Article 86 of the Law on Social Insurance 2008, amended and supplemented in 2014.

Social insurance payment rate of the employer
Social insurance payment rate of the employer

Cases where the regional minimum wage can be used to pay social insurance

According to Decision 595/QD-BHXH in 2017, cases where the regional minimum wage can be used to pay social insurance include:

  • Employees whose salary is lower than the regional minimum wage
  • Employees do simple jobs under normal working conditions
  • Employees in probationary period or vocational training period
  • Employees sign labor contracts for certain seasons or jobs.

The social insurance premium must not be lower than the regional minimum wage at the time of payment, applicable to both employees and employers.

In-depth consulting services on issues related to participating in social insurance at Long Phan

Long Phan provides social insurance consulting services including:

  • Consulting on determining regional minimum wage;
  • Instructions for calculating social insurance premiums;
  • Consulting on procedures for registration and adjustment of social insurance;
  • Support businesses in fulfilling social insurance obligations;
  • Advise on the optimal solution when a dispute arises related to social insurance premiums.

Long Phan’s team of experts will assist customers in determining the exact level of social insurance contributions by region and solving problems that arise during the process of participating in social insurance. For detailed advice on cases of applying the regional minimum wage to pay social insurance and to answer questions about the social insurance regime, please contact Long Phan via the hotline: 0906735386 to receive the most timely and effective support.