How does a director who does not receive a salary pay social insurance?

Reply:According to Clause 24, Article 4 of the Enterprise Law 2020, it is stipulated as follows:

Article 4. Interpretation of terms

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24. A business manager is a private enterprise manager and a company manager, including a private enterprise owner, general partner, Chairman of the Board of Members, member of the Board of Members, Chairman of the company, Chairman of the Board of Directors, member of the Board of Directors, Director or General Director and individuals holding other management positions as prescribed in the Company Charter.

In addition, pursuant to Clause 1, Article 2 of the Law on Social Insurance 2024 as follows:

Article 2. Subjects participating in compulsory social insurance and voluntary social insurance

1. Employees who are Vietnamese citizens and are subject to compulsory social insurance include:

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i) Enterprise managers, controllers, representatives of state capital, representatives of enterprise capital as prescribed by law; members of the Board of Directors, General Directors, Directors, members of the Board of Supervisors or controllers and other elected management positions of cooperatives and cooperative unions as prescribed by the Law on Cooperatives receiving salaries;

[…]

n) Enterprise managers, controllers, representatives of state capital, representatives of enterprise capital as prescribed by law; members of the Board of Directors, General Directors, Directors, members of the Board of Supervisors or controllers and other elected management positions of cooperatives and cooperative unions as prescribed by the Law on Cooperatives do not receive salaries.

Thus, in this case, the company director is considered the business manager, so according to the above regulations, the company director will be subject to social insurance.

* How does a director who does not receive a salary pay social insurance?

According to point d, clause 1, Article 31 of the Law on Social Insurance 2024, the monthly salary used as the basis for social insurance contributions of business managers is as follows:

Article 31. Basis for social insurance payment

1. Salary used as the basis for compulsory social insurance contributions is stipulated as follows:

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d) Subjects specified in points g, h, m and n, Clause 1, Article 2 of this Law may choose salary as the basis for compulsory social insurance payment, but the lowest is equal to the reference level and the highest is 20 times the reference level at the time of payment.

After at least 12 months of paying social insurance based on the selected salary as the basis for social insurance payment, the employee can re-select the salary as the basis for social insurance payment;

Thus, the monthly salary used as the basis for social insurance contributions of an unpaid business manager will be chosen by that person as the basis for compulsory social insurance contributions, but the lowest is equal to the reference level and the highest is 20 times the reference level at the time of contribution.

Note: Currently, the basic salary of 2.34 million VND according to Decree 73/2024/ND-CP has not been abolished, so the reference level is equal to the basic salary. When the basic salary of 2.34 million VND according to Decree 73/2024/ND-CP is abolished, the reference level is not lower than that basic salary (ie the reference level is not lower than 2.34 million VND).