From date 16/05/2026, Decree 105/2026/ND-CP officially takes effect, providing detailed and clearer guidance on union finance. This is not merely a legal document but an important foundation that helps your business proactively plan financial obligations and minimize risks arising during operations.
Overview of Decree 105/2026/ND-CP
The new decree specifies four key areas every employer must understand:
- Payment method and deadline union dues;
- Source of payment and basis for determining the contribution rate;
- Handling cases of late, partial, or non-payment;
- Cases of exemption, reduction or temporary suspension of payment under the regulations.
Notably, this decree establishes a unified legal framework, addressing long-standing inconsistencies in determining contribution rates, especially for businesses with complex labor structures and wage funds. If your business is not fully informed about union dues under previous regulations, please refer to our article Union dues payment from 01/07/2025 for a complete picture before comparing with the new framework.
Contribution rate and basis for calculating union dues
Under Decree 105/2026/ND-CP, union dues are determined as 2% of the wage fund used as the basis for compulsory social insurance contributions for employees. This is a point your business must particularly note, as the calculation basis is not total income, not revenue, and certainly not company profit. Accurately identifying who is required to participate in compulsory social insurance is also an important prerequisite — please refer to our article Subjects required to participate in compulsory social insurance under the 2024 Social Insurance Law to review the list.
| Criteria | Applicable regulation |
|---|---|
| Contribution rate | 2% |
| Calculation basis | Wage fund as basis for compulsory social insurance contribution |
| Subject | Enterprises employing workers subject to compulsory social insurance |
| Payment frequency | Monthly, at the same time as compulsory social insurance |
| Payment deadline | No later than the last day of the following month |
The unified calculation basis allows businesses to easily reconcile data with insurance authorities and the immediate higher-level union, minimizing accounting errors.
Payment deadline and method
Enterprises pay union dues on a cycle of monthly, at the same time as paying compulsory social insurance for employees. The maximum deadline is the last day of the following month. For example, union dues for May 2026 must be paid no later than 30/06/2026.
Synchronizing the payment timing between union dues and social insurance is a very welcome change, helping HR and accounting departments reduce duplicate tasks and easily control monthly obligation cash flow.
Risks of late, partial or non-payment
This is an area requiring particular caution. When situations of late payment, partial payment, incorrect payment amount or non-payment of union dues occur, the enterprise simultaneously faces three consequences:
- Retroactive collection of the full outstanding union dues;
- Payment of late payment interest calculated on the amount and duration of delay;
- Administrative penalties under Article 38 of Decree 12/2022/ND-CP on administrative sanctions in labor and social insurance.
Penalties under Article 38 of Decree 12/2022/ND-CP can reach tens or even hundreds of millions of VND depending on violation severity and workforce size. This cost is entirely avoidable with a clear obligation-tracking process.
Letter of recommendation from IAI Partner
Dear Valued Business,
Decree 105/2026/ND-CP will officially take effect from 16/05/2026. To ensure smooth implementation, IAI Partner would like to share with you a few key points to consider during the preparation phase:
- Review employee list and wage fund as the basis for compulsory social insurance contributions;
- Recalculate union dues monthly at 2% and reconcile with accounting records;
- Fully retain payment receipts, and establish an obligation reminder schedule to avoid missing deadlines during busy months.
These seemingly simple actions form the shield that protects your business from retroactive collections, late payment interest, and penalty risks under Article 38 of Decree 12/2022/ND-CP — in the true spirit of lean yet effective compliance governance which we always pursue.
Throughout this compliance journey, if your business needs assistance with review or process consultation, the IAI Partner team is always ready to accompany you — dedicated, discreet and professional.
Wishing your business a smooth and sustainable season.
Best regards,
The IAI Partner team
Source: IAI-Partner.com
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