Household Business Social Insurance 2025: From Obligation to Competitive Advantage

Key takeaways

• From July 1, 2025, household business owners with tax declaration obligations must join mandatory social insurance with contributions ranging from 690,600 to 13,806,000 VND monthly.
• Household businesses with employees must register and pay social insurance for workers at 21.5% of payroll according to new regulations.
• Non-compliance results in fines of 18-20% of required payments plus double interest rates on unpaid amounts.
• Early compliance not only avoids risks but creates advantages in recruitment and reputation building.

This change is more than just a new obligation. It opens doors for household businesses to operate more effectively, enhance security for owners, and gain advantages in recruiting and retaining employees. Leaders need to understand core regulations to prepare and adapt successfully.

What is a compensation philosophy?

The Social Insurance Law 2024 marks a major shift in expanding social protection coverage, bringing household business owners into the mandatory insurance system for the first time.

Vietnam expands its social safety net by requiring specific household business categories to participate in mandatory coverage.

Household business owners

The new regulations roll out according to a clear timeline. From July 1, 2025, all household business owners with business registration who file tax returns must participate in social insurance. By July 1, 2029, this regulation applies to all remaining household business owners.

This means millions of shop owners, small traders, and individual businesses can now access full retirement, death, sickness, and maternity benefits like company employees. Previously, they could only join voluntary social insurance with limited benefits.

Workers employed by household businesses

Household businesses that hire workers under contracts of one month or more must register and pay mandatory social insurance for employees. This regulation applies to:

• Indefinite-term employment contracts
• Fixed-term employment contracts from 01 month or longer
• Various forms of paid work with management and supervision

This ensures fair benefits for workers and helps household businesses operate more professionally.

How should businesses prepare for costs?

Understanding contribution rates and developing appropriate financial planning is crucial for household businesses to successfully adapt to the new regulations.

Contribution rates for household business owners

Social insurance contribution rate: 29.5% of self-selected salary base, including:

• Retirement and survivor benefits fund: 22%
• Sickness and maternity fund: 3%
• Health insurance fund: 4.5%

Total: 29.5%

The key point is that household business owners have the right to decide their salary base for contributions. This creates flexibility in cash flow management based on actual financial capacity.

Salary base for contributions

Household business owners can freely choose their monthly salary base for social insurance contributions within the regulatory framework:

Level	Amount	Monthly contribution
Minimum	2,340,000 VND/month	690,600 VND
Maximum	46,800,000 VND/month	13,806,000 VND

This flexibility helps household business owners balance current finances with future benefit expectations. Those with low income can choose minimum contributions to reduce financial pressure. Those with better conditions can contribute more to ensure suitable retirement benefits.

Specific monthly costs

Based on official sources from Circular 351/BHXH-QLT, contribution amounts range from 690,600 VND (minimum choice) to 13,806,000 VND (maximum choice).

To support cash flow management, owners can choose monthly, quarterly, or semi-annual payment schedules based on needs and specific financial situations.

Responsibilities toward employees

For employees with employment contracts, household businesses must pay approximately 21.5% of workers’ payroll into social insurance, health insurance, and unemployment insurance funds. This is an important additional cost that owners need to factor into total HR cost planning and operating budgets.

What registration process and penalties should you note?

The registration process is designed to be simple, but penalties are very strict, requiring household businesses to strictly comply with regulations.

Registration steps

Step 1: Prepare documents

Required documents include:

• TK1-TS: Participation form, social insurance, and health insurance information adjustment
• TK3-TS: Unit participation form, social insurance, and health insurance adjustment
• D02-LT: List of employees participating in social insurance, health insurance, and unemployment insurance

Step 2: Submit documents

Documents can be submitted in three ways:

1. Directly at district-level social insurance offices
2. By mail
3. Online through social insurance software (for units with digital signatures)

Step 3: Receive results

Social insurance offices will issue social insurance books and health insurance cards within 5 working days of receiving complete, valid documents.

Strict penalties for non-compliance

The penalty system is designed to be strict to ensure compliance:

Financial penalties:

• 18-20% of the total required payments (maximum 75 million VND) if not paying for all employees
• 50-75 million VND for avoiding social insurance payments

Remedial measures:

• Must pay back all missing amounts
• Pay additional interest at double the social insurance fund investment rate
• Banks may deduct money from accounts if not voluntarily complied

Turn obligation into a competitive advantage

Instead of viewing mandatory social insurance participation as a burden, smart leaders will turn it into a tool for sustainable competitive advantage.

Proper compliance reduces legal risks. This not only avoids heavy fines but also eliminates complex legal issues that could disrupt business operations.

Providing full social insurance benefits helps household businesses become attractive and stable workplaces. This is especially important given labor shortages and fierce competition to attract talent. Workers increasingly prioritize workplaces with comprehensive standard benefits, not just monthly wages.

Seriously following social welfare regulations demonstrates social responsibility and builds the image of a professional, trustworthy business unit. This reputation has value not only with employees but also creates positive impressions with customers, partners, and the community.

Safe work environments with clear benefit policies provide the foundation for sustainable development. When employees feel protected and have secure futures through social insurance benefits, they will stay longer and dedicate themselves fully to the company’s shared development.

Bringing household businesses into mandatory social insurance is a major step forward. It shifts an important part of the economy from informal to formal. Leaders cannot view this as just a cost burden. Instead, proactively review business models, budget properly, and register on time according to new regulations.To ensure effective compliance and maximize benefits from the new regulations, businesses should explore professional social insurance consulting and HR consulting services from experts. Early compliance not only helps avoid risks but is also a strategic investment in the stability, reputation, and sustainable competitiveness of the business.