Regulations on social insurance payment for part-time and freelance workers

What are part-time and freelance workers? Are they required to participate in social insurance? What are the voluntary social insurance contribution levels and social insurance contribution salaries?

I. Freelancer labor form

1. What is freelance labor?

Freelancers are people who work freelance, are self-employed, provide their own services, are not bound by a certain profession, and are not bound by time or place of work.

Freelancers are hired to perform work for a client or project owner and are usually paid on a project-by-project basis. Freelancers are allowed to work for multiple employers at the same time, as long as the work is completed on schedule.

Popular freelance jobs include: writing, graphic design, programming, translation, online marketing, business consulting and many other fields…

>> See details: Freelancer labor form.

2. Things to note when signing a freelancer labor contract

The nature of a freelancer is a form of freelancing, not bound to work for any particular company or organization. The work is usually done in the short term, with remuneration paid in the form of a lump sum. Signing a labor contract is often long-term and has obligations according to company regulations, so it is not suitable in this case.

However, freelancers can still sign service contracts to:

• Legal guarantee, is the basis for resolving disputes between parties when disputes occur;
• Ensure the basic elements of a labor contract but the nature and purpose are simpler, more suitable to the nature of the work between the service provider and the paying party.

According to Article 513 of the 2015 Civil Code, a service contract is a written agreement between a service provider and a service user. The service provider will perform work for the service user, and in return, the service user will have to pay a fee to the service provider.

Currently, the service contract form is not specifically regulated. However, when drafting a service contract, it is necessary to ensure the following basic terms:

1. Information of the parties;
2. Contents of the contract (services performed and scope of work);
3. Time of execution;
4. Rights and obligations of the parties;
5. Service price, payment time and payment method;
6. Termination of contract;
7. Dispute resolution.

>> FREE DOWNLOAD: Service contract template.

3. Participate in social insurance for freelance workers

3.1. Are freelancers required to participate in social insurance?

Pursuant to Clause 1, Article 2 of the Law on Social Insurance 2014, employees who are Vietnamese citizens are subject to compulsory social insurance, including:

1. People working under indefinite-term labor contracts, fixed-term labor contracts, seasonal labor contracts or labor contracts for a specific job with a term from 3 months to less than 12 months, including labor contracts signed between employers and legal representatives of people under 15 years old according to the provisions of labor law;
2. Employees working under labor contracts with a term from 1 month to less than 3 months.

Accordingly, compulsory social insurance only applies to employees working under labor contracts of 1 month or more. 

➨ Therefore, because there are no binding rights and obligations by labor contracts, freelancers are not required to participate in compulsory social insurance.

3.2. Social insurance contribution rates applicable to freelance workers

Clause 4, Article 2 of the Law on Social Insurance 2014 stipulates that voluntary social insurance participants are Vietnamese citizens aged 15 years or older and not subject to the provisions of Clause 1 of this Article.

➨ Therefore, if they want to pay social insurance, freelancers can register to participate in voluntary social insurance.

The voluntary social insurance contribution level is calculated according to the formula:

Contribution level/month = 22% x Income level chosen to pay voluntary social insurance – State support level

In which, the state support level is as follows:

(Unit: VND/month)

Freelancers can choose their own income level to participate in voluntary social insurance but must ensure the following limits:

1. Lowest level = 1,500,000 VND (standard level for poor households in rural areas)

For example: 

Mr. A is a freelancer and wants to participate in voluntary social insurance at the lowest level. Mr. A is in a different category. So, Mr. A’s voluntary social insurance contribution each month will be:

Monthly contribution = (22% x 1,500,000) – 33,000 = 297,000 VND/month

2. Highest level = 20 x Basic salary (*)

(*) From July 1, 2023, the basic salary is 2,340,000 VND, based on Decree 73/2024/ND-CP.

For example:

Mr. A is a freelancer, a different category supported by the government. Mr. A wants to participate in voluntary social insurance at the highest level. So, Mr. A’s voluntary social insurance contribution each month will be:

Monthly contribution = (22% x 2,340,000 x 20) – 33,000 = 10,263,000 VND/month

>> See details: Voluntary social insurance contribution rates.

II. Part-time work

1. What is part-time work?

Part-time work is also known as part-time work. This is a form of work that is not full-time, not following the standard administrative hours stipulated in Article 32 of the 2019 Labor Code, specifically:

• The agreed working time is shorter than the normal working time;
• The agreed time is calculated by day, week, or month as prescribed by law or specified in the labor regulations, collective labor agreements, and agreements when signing labor contracts.

At the same time, part-time employees are entitled to receive wages and equal rights and obligations as full-time employees.

>> See details: Part-time work.

2. Things to note when signing a part-time labor contract

Pursuant to Article 32 of the 2019 Labor Code, even if working part-time, employees are still entitled to receive wages and equal rights and obligations as full-time employees. Therefore, employers must still sign labor contracts with employees. 

Based on the labor contract, the salary for employees can be determined in accordance with the provisions of law and other issues related to the rights and legitimate interests of employees and employers.

When drafting a labor contract, the following basic terms must be ensured:

1. Information of the parties;
2. Contract content (job and work location);
3. Term of contract;
4. Salary, form & term of payment, salary allowances and other supplements;
5. Promotion and salary increase;
6. Working time;
7. Social insurance, health insurance, unemployment insurance;
8. Other terms agreed upon by both parties (protection regime, training, fostering, improving qualifications, professional skills, etc.)

>> FREE DOWNLOAD: Part time contract template.

3. Participate in social insurance for part-time workers

3.1. Are part-time workers required to participate in social insurance?

Pursuant to Clause 1, Article 2 of the Law on Social Insurance 2014, employees who are Vietnamese citizens are subject to compulsory social insurance, including:

1. People working under indefinite-term labor contracts, fixed-term labor contracts, seasonal labor contracts or labor contracts for a specific job with a term from 3 months to less than 12 months, including labor contracts signed between employers and legal representatives of people under 15 years old according to the provisions of labor law;
2. Employees working under labor contracts with a term from 1 month to less than 3 months.

➨ Thus, part-time employees are those who work under a labor contract with a term of 1 month to less than 3 months and are subject to compulsory social insurance, with the same social insurance contribution level as for full-time employees.

3.2. Regulations on social insurance payment for part-time workers

As mentioned above, the social insurance contribution rate of part-time workers will be equivalent to that of full-time workers. But in reality, for part-time jobs, the working time will not be enough for a month. Therefore, according to Clause 3, Article 85, it is stipulated that:

• Employees who do not work and do not receive salary for 14 working days or more in a month do not pay social insurance for that month;
• The above non-working time is not counted for social insurance benefits, except in cases of maternity leave.

➨ Thus, if the total actual working time in a month is 14 days more than the normal working time of a full-time employee, the part-time employee will not have to pay social insurance.

Clause 2, Article 6 of the Law on Social Insurance stipulates that the monthly salary for compulsory social insurance contribution must not be lower than the regional minimum wage at the time of contribution for employees doing the simplest job or position under normal working conditions. 

Therefore, if the salary received by the employee is lower than the regional minimum wage at the time of payment, the employee is not entitled to insurance (Article 3 of Decree 38/2022/ND-CP).

>> See details: Social insurance contribution rates.

III. Distinguish between gross salary and net salary

1. What is gross salary? What is net salary?

According to the above concept, employees receiving gross salary will have to deduct a percentage of money to pay social insurance and personal income tax.

According to the provisions of Decision 595/QD-BHXH, the salary deduction rates for employees’ insurance contributions are: Social Insurance (8%), Unemployment Insurance (1%) and Health Insurance (1.5%).

2. How to calculate gross salary and net salary

Gross salary is often used in labor contracts as a basis for calculating net salary or actual salary received by employees, calculated back and forth using the following formula:

Net salary = Gross salary – (Social insurance + Health insurance + Unemployment insurance + Personal income tax)

Gross salary = Net salary + Compulsory insurance premium + Personal income tax (if any)

In there:

• Compulsory insurance premiums for employees = 10.5% of salary (specifically, social insurance accounts for 8%, unemployment insurance accounts for 1% and health insurance accounts for 1.5%);
• Personal income tax = (Total income – Non-taxable amounts – Deductions) x Tax rate.

For example: 

Ms. B is an accountant at ABC company, signed a 12-month labor contract, gross salary is 18,000,000 VND. Ms. B has no dependents → Ms. B’s social insurance participation level will be:

• Social insurance = 18,000,000 x 8% = 1,440,000
• BHTN = 18,000,000 x 1% = 180,000
• BHYT = 18,000,000 x 1.5% = 270,000

➨ Total monthly social insurance contribution = 1,440,000 + 180,000 + 270,000 = 1,890,000 VND

Ms. B has no dependents, so deductions including personal deduction = 11,000,000 VND

Taxable income = 18,000,000 – 11,000,000 – 1,890,000 = 5,110,000 VND

Taxable income > 5,000,000 VND will be subject to a tax rate of 10%. Specifically:

Personal income tax = (10% x 5,110,000) – 250,000 = 261,000 VND

➨ So the total amount Ms. B actually receives each month (net salary) is:

Net salary = 18,000,000 – 1,890,000 – 261,000 = 15,849,000 VND

IV. Questions related to part-time and freelance workers

1. What are the documents and procedures for registering for voluntary social insurance for freelancers?

Freelancers can fill out the declaration form online (form TK1-TS) or go directly to the Social Insurance agency or Social Insurance collection agents where they live to register.

>> See details: How to register for voluntary social insurance.

2. What benefits do freelancers enjoy when participating in voluntary social insurance?

Freelancers will enjoy retirement and death benefits when participating in voluntary social insurance, specifically:

• When freelance workers do not need to receive a pension, they can withdraw their social insurance in one lump sum when they meet all the withdrawal conditions such as workers who have reached retirement age but have not paid social insurance for 20 years and do not continue to participate in social insurance, workers who have settled abroad, workers who have one of the life-threatening diseases such as cancer, HIV/AIDS, paralysis, etc.;
• When a freelancer dies, his or her relatives will receive funeral benefits and death benefits as prescribed.

>> See details: Benefits of participating in social insurance.

3. Is it more beneficial for workers to receive gross or net salary?

When receiving gross salary, the advantage is that employees can proactively calculate their personal income tax and insurance. This needs to be done regularly to avoid employers calculating and paying incorrectly.

When receiving net salary, the advantage is that the employee will receive the exact amount agreed upon, the payment of insurance and personal income tax will be calculated and paid by the employer. In reality, businesses often use net salary, a salary lower than the regulation to pay insurance for employees, leading to lower insurance contributions and benefits.

➨ Therefore, whether employees choose gross or net salary, the final amount you receive is the same. But when receiving gross salary, employees can proactively refer to and accurately calculate the salary they receive each month. When you encounter problems such as work accidents, unemployment or maternity leave, you are still entitled to benefits above the gross salary that you pay and the company agrees to pay, so employees should receive gross salary instead of net salary.

4. What is the minimum wage for part-time workers?

The minimum wage for part-time employees is stipulated in Clause 1, Article 3 of Decree 38/2022/ND-CP, specifically the minimum hourly wage is:

• Zone I: 22,500 VND/hour;
• Zone II: 20,000 VND/hour;
• Region III: 17,500 VND/hour;
• Zone IV: 15,600 VND/hour.

Thus, employers are not allowed to pay hourly workers less than the above minimum wage.