Decree 158/2025/ND-CP Decree 158/2025/ND-CP officially became the foundational legal document, reshaping the entire social insurance system in Vietnam from mid-2025. Understanding the provisions of Decree 158/2025/ND-CP is not only a responsibility for businesses to comply with but also key to protecting the vital rights of employees.
The legal role of Decree 158/2025/ND-CP
Issued to guide the implementation of the 2024 Social Insurance Law, Decree 158/2025/ND-CP focuses on increasing transparency in labor relations and social security. This document serves as a guiding principle to help stakeholders clearly identify:
- Contribution limits, mandatory categories of contributors, and methods of periodic payment.
- Procedures for settling retirement and death benefits according to realistic scenarios.
- Mechanisms to protect workers when businesses face financial difficulties or outstanding social insurance debts.
Expand the target audience.
One of the highlights of Decree 158/2025/ND-CP is the effort to extend the social safety net to previously neglected groups of workers. Specifically, the scope of mandatory social insurance participation now includes:
- Business owners: Individuals with officially registered businesses are now required to participate in the pension accumulation program.
- Executive managers: This includes business managers and cooperative managers (even if they don't receive a monthly salary).
- Part-time workers: Individuals who work part-time and whose income meets the threshold stipulated in Decree 158/2025/ND-CP.
The priority order for social insurance contributions when an individual holds multiple positions is also clarified in Decree 158/2025/ND-CP, assisting specialized units in various fields. full-service accountingi Companies like MAN – Master Accountant Network – can easily establish a precise consulting roadmap for clients.
Replace the base salary with a reference rate.
Article 5 of Decree 158/2025/ND-CP marks a historic change by shifting from a basic salary to a reference salary. This is a flexible index that the Government adjusts based on the consumer price index (CPI).
The reference levels in Decree 158/2025/ND-CP are used for:
- Set a ceiling on the monthly mandatory social insurance contribution.
- Used as a basis for calculating short-term benefits (maternity, convalescence).
- Calculate the amount of pension and lump-sum benefits.
Based on the salary used for calculating social insurance contributions according to the new regulations.
Decree 158/2025/ND-CP provides strict guidelines on how to determine taxable income in Article 7. Business accountants need to pay close attention to this:
- Salary conversion: Hourly/weekly wages must be converted to the standard monthly rate.
- Foreign currency: If salaries are paid in foreign currency, the average buying rate of four state-owned commercial banks must be applied. Close coordination with accounting experts to review the list of allowances subject to insurance contributions under Decree 158/2025/ND-CP is necessary to avoid the risk of retroactive collection.
Businesses should collaborate with specialized units. outsourced tax accounting services Reviewing the list of insurance contribution allowances under Decree 158/2025/ND-CP is extremely necessary to avoid risks related to financial recovery.
Reforming the pension and social insurance system.
The changes to pension and lump-sum benefit policies in Decree 158/2025/ND-CP aim to optimize long-term benefits for participants while creating a more flexible mechanism suitable to the realities of the modern labor market.
Shorten the insurance payment period.
According to Decree 158/2025/ND-CP, workers only need to contribute for 15 years (instead of 20 years as before) to be eligible for a pension when they reach retirement age. This is especially significant for those who joined late.
Tighten regulations on receiving lump-sum social insurance benefits.
Article 14 of Decree 158/2025/ND-CP clearly distinguishes the target groups:
- For those who joined before July 1, 2025: They retain the right to withdraw their social insurance contributions in a lump sum after 12 months of leaving their job.
- For participants joining after July 1, 2025: It is encouraged to retain your funds for retirement benefits; a lump-sum withdrawal will only be processed in exceptional circumstances (relocation, critical illness).
Monthly allowance policy and free health insurance.
To support elderly people who are not eligible for a pension, Decree 158/2025/ND-CP (Articles 22 to 25) establishes a monthly allowance system. Workers in this category not only receive a monthly cash payment but also are provided with a free health insurance card by the State, helping to alleviate the healthcare burden.
Solutions when a business is in debt or goes bankrupt.
Decree 158/2025/ND-CP demonstrates a humane approach by prioritizing the settlement of benefits for workers in "dead" companies (bankrupt, owners absconding). The Social Insurance agency will verify the contribution period based on the actual amount collected, allowing workers to immediately receive sick leave and maternity benefits regardless of whether the company has settled its debts or not.
Cases of retroactive collection and temporary suspension of social insurance contributions.
Decree 158/2025/ND-CP has clarified the mechanism for adjusting financial obligations related to social insurance in Articles 8 and 10, helping businesses to be more proactive in managing cash flow and complying with the law.
- Backdated social insurance contributions: This is applied when there is a discrepancy between declared and actual figures, such as a shortage of participating workers or incorrect determination of the contribution wage level. The backdated contributions may result from inspections by competent authorities or from businesses conducting their own reviews and supplementary declarations as stipulated in Decree 158/2025/ND-CP.
- Temporary suspension of contributions to the pension and death benefit fund: This is a support mechanism in force majeure situations. When businesses are affected by factors such as natural disasters, epidemics, or production declines leading to widespread labor cuts, Decree 158/2025/ND-CP allows for a temporary suspension of contributions to this fund for a certain period, in order to facilitate financial stability and business recovery.
Summary of key changes in Decree 158/2025/ND-CP
To help businesses and workers easily visualize the significant changes, the table below summarizes the core criteria between the regulations prior to 2025 and the new points under Decree 158/2025/ND-CP. This visual comparison clearly shows the reform trend towards greater flexibility, expanded coverage, and enhanced protection of the rights of social insurance participants.
| Criteria | Before 2025 | Decree 158/2025 is in effect. |
| Period of pension contributions | 20 years | 15 years |
| Based on calculations | base salary | Reference level |
| Required subjects | Having an employment contract for more than one month. | Expanding the number of household businesses, Cooperative Management |
| Foreign exchange rates | Interbank exchange rate | Average purchase price of 4 state-owned banks |
| Handling social insurance debt | It's difficult to resolve when the owner absconds. | Confirm the amount paid to receive the benefit immediately. |
The comparison table above shows that Decree 158/2025/ND-CP not only adjusts the technical aspects but also changes the approach to social insurance management towards greater flexibility and better protection for workers. Shortening the contribution period, replacing the base salary with a reference level, and expanding the scope of participation make the social security system more comprehensive and practical. Corporate accountants need to quickly update to Decree 158/2025/ND-CP to ensure compliance, optimize costs, and minimize risks during operations.
Conclude
Decree 158/2025/ND-CP brings about profound changes, not only in calculation techniques but also in the management mindset of social security. Businesses need to proactively review:
- List of workers
- Contribution rate based on reference rate
- Internal procedures related to insurance.
Strict adherence to Decree 158/2025/ND-CP will help businesses mitigate legal risks while creating a sustainable social security foundation for employees in the long term.
For any questions, support, or advice, please contact your company. Contact MAN – Master Accountant Network via:
Contact information MAN – Master Accountant Network
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Content production by: Mr. Le Hoang Tuyen – Founder & CEO of MAN – Master Accountant Network, CPA Vietnam with over 30 years of experience in accounting, auditing, and financial consulting..
