How will companies that pay social insurance late be punished?

When is the deadline for businesses to pay social insurance? What damages and penalties will businesses face if they pay social insurance late? See now

I. Regulations on social insurance payment period of enterprises

➤ Paying social insurance, health insurance, and unemployment insurance is the right and responsibility of employers and employees. Employers are obliged to pay social insurance according to regulations and deduct a percentage from employees’ salaries every month to pay into the social insurance fund at the same time.

➤ The social insurance payment deadline for businesses is as follows:

• If paid monthly, the payment deadline is the last day of the month. For example, the social insurance payment for July 2023 will be paid no later than July 31, 2023;
• If paying every 3 months or every 6 months, the latest payment deadline is the last day of the selected method.

>> See details: Social insurance contribution levels and rates.

II. Damages caused by debt or late payment of social insurance, health insurance, and unemployment insurance

1. About the business

• When a business owes money or pays late compared to the regulations of the Social Insurance, the business will be administratively fined for late payment and will be charged late payment interest according to the provisions of law;
• Enterprises will not be able to make employee-related records such as sick leave, maternity leave, or close the book when employees leave;
• At the same time, businesses that owe social insurance money will be the basis for social insurance agencies to inspect their businesses.

>> See more: Instructions for closing social insurance books.

2. About workers

When businesses are late in paying social insurance, employees will suffer a lot of loss in benefits:

• Employees’ health insurance will be cut off if the company owes social insurance for more than 30 days. Employees who go to the hospital during the time the company owes social insurance will not be paid social insurance benefits;
• Employees will not be entitled to sick leave or maternity benefits;
• When quitting a job, employees cannot finalize their social insurance, health insurance, and unemployment insurance participation process, and the company owes them money.

3. Penalty for late payment of social insurance, health insurance, unemployment insurance 

➤ According to Clause 5, Article 39 of Decree No. 12/2022/ND-CP, late payment of compulsory social insurance and unemployment insurance will result in a fine of 12% – 15% of the total amount payable for compulsory social insurance and unemployment insurance at the time of making the administrative violation record, but not exceeding VND 75,000,000.

➤ Enterprises will be charged late payment interest on social insurance debt as follows:

• In case of late payment of health insurance for 30 days or more, the interest rate for late payment is equal to 2 times the 9-month interbank market interest rate announced by the State Bank of Vietnam on the State Bank of Vietnam’s electronic information portal of the previous year. In case the interbank interest rate of the previous year does not have a 9-month term, the interest rate of the previous term of the 9-month term shall apply;
• In case of evasion, late payment, or appropriation of social insurance and unemployment insurance contributions and benefits for 30 days or more, the interest rate to be paid is equal to twice the average investment interest rate of the social insurance and unemployment insurance funds of the previous year;
• Within the first 15 days of January each year, the social insurance agency must send a written notice of the average monthly interest rate based on the prescribed average interest rate to the subordinate social insurance agency, the Social Insurance of the Ministry of National Defense, and the Social Insurance of the Ministry of Public Security for unified implementation.

III. Documents to be prepared when the Social Insurance agency comes to the enterprise for inspection

➤ When a business shows signs of violating the law on social insurance, health insurance, and unemployment insurance, the social insurance agency will conduct specialized inspections on insurance payments.

➤ When the insurance agency inspects, the business needs to fully prepare the following documents: 

1. Labor contracts, decisions on resignation, termination, decisions on salary increase, salary decrease, allowances, labor agreements, salary scales, salary and bonus payment regulations;
2. Personal records of all employees in the company;
3. Payroll List;
4. Monthly salary payment sheet with employee signature, time sheet;
5. Registration file for social insurance, health insurance, unemployment insurance of employees in the company;
6. Adjustment records of social insurance agencies during the process of paying insurance of enterprises;
7. Notifications on payment results of social insurance, health insurance, unemployment insurance;
8. Documents used as basis for collecting insurance claims (if any);
9. Photocopy of social insurance book of employees in the enterprise;
10. Report on labor usage situation in the first 6 months and last 6 months of the year of the enterprise;
11. Finalization of personal income tax and corporate income tax of enterprises;
12. Payment slip/payment authorization for compulsory insurance.

>> See more: How to prepare corporate income tax settlement documents. 

IV. Frequently asked questions about businesses delaying social insurance payments