Can foreigners be paid in foreign currency?

More and more people want to expand their working environment and improve their income by working in different countries. Many companies in Vietnam have started recruiting foreign employees. As a result, the issue of paying salaries to foreigners has also received more attention. Regulations on paying salaries to foreigners must comply with legal regulations but still ensure good treatment for this group of workers. So how to calculate their salaries and what are their benefits? Let's find out with Faro Vietnam in the following article.

1. Can foreigners be paid in foreign currency?

According to the provisions of the Law, employees working in Vietnam must be 18 years of age or older and have civil capacity. Foreigners working here have been granted full work permits by competent authorities. Therefore, regulations on paying salaries to foreigners are also clearly stated on paper.

Article 22 of the Foreign Exchange Ordinance 28/2005/PL-UBTVQH11 stipulates the restriction on the use of foreign currency in Vietnam. Transactions, payments, listings, and advertisements of residents or non-residents in Vietnam are not allowed to be made in foreign currency. That is, transactions for paying salaries to employees must be made in Vietnamese Dong.

However, Clause 14, Article 4 of Circular No. 32/2013/TT-NHNN also clearly states: organizations are allowed to negotiate and pay salaries, bonuses, and allowances to employees in foreign currency by bank transfer or cash to non-resident foreigners and resident foreigners working at that organization. Clause 2, Article 95 of the 2019 Labor Code No. 45/2019/QH14 also stipulates that salaries can be paid to foreign employees in Vietnam in foreign currency according to the salary clearly stated in the contract.
 

Foreign workers can be paid in foreign currency in accordance with current legal regulations

Thus, based on regulations and legal basis, companies and enterprises can pay salaries to foreigners in foreign currency. The form of salary payment is via bank transfer or cash depending on the agreement of the two parties, clearly stated in the contract.

2.  Welfare and welfare regime for foreign workers

When working in Vietnam, foreign employees can receive the same benefits as Vietnamese employees. For example: the salary received during the probationary period is usually 85%, or higher depending on the agreement of the two parties

• Probationary regime: the probationary salary for foreigners is equivalent to the probationary salary of Vietnamese workers, which is about 85% of the official salary. A higher probationary salary will be clearly stated in the probationary contract.
• Minimum wage: the minimum wage for foreigners working in Vietnam depends on the business area of the enterprise. Each region will have a difference in minimum wage, the highest is region I, the lowest is region IV.
• Basis for calculating salary: the salary calculation for foreigners is based on working capacity, position, nature of work, experience, professional qualifications and business activities of the company or enterprise.
• Allowances: foreign employees are also entitled to allowances and subsidies similar to Vietnamese employees such as: lunch allowance, travel allowance, gasoline allowance, holiday bonuses. These expenses depend on the policy of each enterprise.

3. Regulations on social insurance and health insurance for foreigners

3.1 Social insurance for foreigners in Vietnam

Foreign employees working in Vietnam are subject to compulsory social insurance when:

• Having a work permit or a practice certificate or a practice license issued by a competent authority of Vietnam;
• Having an indefinite-term labor contract or a fixed-term labor contract of at least 01 year with an employer in Vietnam.
• Social insurance contribution rate for foreign employees in 2022

Clause 1, Article 12 of Decree 143/2018/ND-CP stipulates:

From January 1, 2022, foreign employees are subject to compulsory social insurance, paying 8% of their monthly salary to the pension and death fund every month.

In addition, employers contribute the following amounts to the monthly salary fund for social insurance of employees:

• 3% to the sickness and maternity fund;
• 0.5% to the occupational accident and disease insurance fund;

What are Regulations On Paying Foreigners HR Need To Know

4. Health Insurance for Foreigners in Vietnam

According to Article 18 of Decision 595/QD-BHXH, foreign employees working in Vietnam are also considered to be subject to health insurance, specifically the health insurance contribution rate is as follows:

• Employees: 1.5% of monthly salary.
• Employers: 3% of monthly salary;

Based on the above regulations, from January 1, 2022, employers and employees who are foreign citizens working in Vietnam will deduct social insurance, health insurance, occupational accident and disease insurance monthly on the monthly salary at the following rates:

Similar to domestic employees, the HR department is responsible for guiding foreign employees on the procedures for receiving health insurance benefits from the Vietnamese government, along with the required documents to ensure the best benefits for employees.

Hopefully this article has helped you understand all the information about the regulations on paying salaries to foreigners. From there, you can calculate salaries for foreigners accurately, ensuring the rights of employees and employers.

If you need more assistance, please contact us:

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• Email: service@farovietnam.com.vn

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