According to a draft decree guiding the implementation of certain provisions of the 2025 Employment Law, MHA proposes that from January 1, 2026 the unemployment insurance contribution by employees be reduced to 0.9 percent of monthly salary, nearly the same as the contribution rate paid by employers. 

The state budget would also provide a maximum support of 0.9 percent of monthly salary for workers participating in UI.

Currently, under the 2013 Employment Law, both employees and employers contribute 1 percent to the UI fund. The proposed adjustment is considered necessary to ensure policy flexibility in response to uncertainties such as natural disasters, pandemics, or economic crises.

MHA reported that as of the end of June 2025, around 16.42 million people had participated in the UI system, an increase of 9.7 percent compared to the same period in 2024.

In 2024, the UI fund collected VND25.678 trillion, spent VND23.039 trillion, and recorded a surplus of VND63.4 trillion. By the end of 2025, the surplus is expected to rise to about VND67.384 trillion.

If the contribution rate is reduced from 1 percent to 0.9 percent, the fund is expected to collect about VND23.162 trillion per year. However, annual spending may increase by about VND4.319 trillion due to the expansion of support policies under the new law.

These increased expenditures include: support for vocational training and upskilling, employment counseling and job placement services, and UI contributions for employers hiring persons with disabilities.

Though annual expenditures may exceed revenue, MHA said that with the current surplus, the UI fund remains financially sound and will not require state budget support for at least five years.

Flexible contribution rates proposed

Pham Minh Huan, former Deputy Minister of Labor, War Invalids and Social Affairs (now MHA), said the proposal to reduce UI contributions is reasonable given the current challenges faced by businesses, but any adjustment should be based on thorough analysis of the fund’s income, expenses, and labor market forecasts.

A representative of a plastics manufacturing company with nearly 500 workers commented that the reduction from 1 percent to 0.9 percent is positive but not enough. “A 0.1 percentage point cut is insignificant. The rate should be lowered to 0.5-0.7 percent to truly ease the burden on businesses and workers,” the representative said.

Another suggestion is to design a flexible UI contribution system. For example, when the UI fund surplus exceeds VND60 trillion, the contribution rate could be reduced to 0.5 percent. If the surplus declines, the rate could gradually be increased again.

Tran Thuong