Vietnam Social Insurance clarifies the wage base for mandatory social insurance contributions on lump-sum and piece-rate labor contracts
RegHub explainer by New MarketerLast updated:
Based on:158/2025/NĐ-CP - Ministry of Finance
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
Many construction firms and other businesses pay workers under lump-sum or piece-rate labor contracts, but have struggled to determine the wage base for mandatory social insurance (SI) contributions because the worker's actual monthly income fluctuates and is only known after the month ends. Responding to a business inquiry, Vietnam Social Insurance cited Clause 1, Article 7 of Decree 158/2025/ND-CP and Circular 10/2020/TT-BLDTBXH, clarifying that for employees paid by product or lump-sum wages, the labor contract must state a time-based (monthly) wage rate that is used to calculate the product or lump-sum unit price. It is this contracted time-based rate, not the fluctuating amount actually paid each month, that forms the basis for calculating mandatory SI contributions, together with any allowances and other additions that have a specific, stable, and regularly paid amount (excluding portions that vary with productivity or output). In practice, this means businesses should agree on and record a time-based wage rate in the labor contract from the outset, rather than waiting until month-end actual income is known before calculating SI contributions. Doing so helps employers avoid late, over-, or under-payment of monthly SI contributions for staff working under lump-sum or piece-rate arrangements.
The business inquiry
A construction company reported that the Ministry of Finance's portal had published an official reply from Vietnam Social Insurance to another construction firm, stating that assigning lump-sum construction work to a labor team falls under mandatory social insurance (SI) contribution.
The company gave a concrete example: Construction Company ABC assigns worker A a lump-sum job of building a 110mm wall at a unit price of VND 800,000 per cubic meter (the price covers labor only, with materials supplied by the company on site). In January 2026, worker A completed 50 m3, worth VND 40,000,000; in February 2026, worker A added more people to the team and completed 100 m3, worth VND 80,000,000. The team's monthly output value is not fixed because the number of workers and the split of work varies, and the amount each worker actually receives (split by actual workdays) is only known after the month ends.
The company argued that, based on Clause 1, Article 7 of Decree 158/2025/ND-CP, it lacks a basis to withhold and pay SI contributions for worker A and the team under this arrangement, since actual income is only known at month-end, risking late, over-, or under-payment of the prior month's SI contribution. The company asked the competent authority for specific guidance on how to determine the wage or pay that serves as the basis for SI contributions for employees working under lump-sum contracts.
Official response
Vietnam Social Insurance replied as follows:
Under Point a, Clause 5, Article 3 of Circular 10/2020/TT-BLDTBXH dated 12 November 2020 of the Ministry of Labor, Invalids and Social Affairs (detailing certain provisions of the Labor Code on labor contract content), for employees paid by product or lump-sum wages, the labor contract must record a time-based wage rate used to determine the product or lump-sum unit price.
Under Clause 1, Article 7 of Decree 158/2025/ND-CP dated 25 June 2025 of the Government (detailing implementation of the Law on Social Insurance regarding mandatory SI), the wage used as the basis for mandatory SI contributions is the monthly salary, consisting of three components:
- Wage by job or title: a time-based (monthly) rate under the wage scale or table built by the employer per Article 93 of the Labor Code, agreed in the labor contract. For employees paid by product or lump-sum wages, this is the time-based rate used to determine the product or lump-sum unit price, as recorded in the contract.
- Wage allowances: compensating for working conditions, job complexity, living conditions, or labor-attraction factors not yet reflected or not fully reflected in the wage above, agreed in the labor contract; excluding allowances that fluctuate with the employee's productivity, work process, or work quality.
- Other additions: with a specific determinable amount, agreed in the labor contract and paid stably and regularly in each pay period; excluding additions that fluctuate with the employee's productivity, work process, or work quality.
In short, for employees working under lump-sum contracts, the actual monthly pay received (which fluctuates with output and workdays) is not the direct basis for mandatory SI contributions. The contribution basis is the time-based wage rate agreed and recorded in the labor contract from the outset, used to set the lump-sum unit price, plus any allowances and other additions that have a fixed, stable amount.
Vietnam Social Insurance issued this response so that employees and businesses are informed and can implement it in accordance with regulations.