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2% trade union funding: which businesses must pay, how much, and where to remit it?

By Nguyễn Quốc Trung — Deputy General Director · Updated 2026-09-03

Trade union funding is one of those statutory obligations that many businesses still mistake for something you "only pay once you have a union". The reality is the opposite: this obligation is tied to whether the business employs workers who fall within compulsory social insurance (BHXH), not to whether a trade union organisation has been set up. From 1 July 2025, when Luật Công đoàn số 50/2024/QH15 (Trade Union Law No. 50/2024/QH15) took effect and replaced Luật Công đoàn 2012, the way these provisions are cited and several rules on trade union finances have changed. The article below is for directors and HR managers who need a clear answer: who has to pay, on which salary fund, when, where, how it differs from membership dues, and what the penalty is for getting it wrong.

What is the 2% trade union funding and which businesses must pay it?

Trade union funding is an amount paid by the employer, equal to 2% of the salary fund used as the basis for compulsory social insurance (BHXH) contributions for employees. This is a statutory obligation applying to every agency, organisation, unit, business, cooperative and union of cooperatives that employs workers falling within compulsory social insurance.

The legal basis is Article 29, Clause 1, Point b of Luật Công đoàn số 50/2024/QH15, in effect from 1 July 2025. The key point: this 2% obligation makes no distinction between businesses that have or have not established a grassroots union, and does not depend on whether employees are union members.

Because Luật Công đoàn 2024 has replaced Luật Công đoàn số 12/2012/QH13, from 2026 onwards, when dealing with the authorities, businesses should cite Luật 50/2024/QH15. Citing Luật Công đoàn 2012 means citing a document that is no longer in force.

As for the guidance implementing the trade union finance provisions, the document currently in force is Nghị định 105/2026/NĐ-CP (Decree 105/2026/NĐ-CP) (issued 31 March 2026, effective 16 May 2026), which provides guidance on Luật Công đoàn 2024. This decree replaces the earlier guidance (Nghị định 191/2013/NĐ-CP under the 2012 Law); however, the exact repeal clauses should be checked directly against the original text of Nghị định 105/2026 to be certain.

Does a business without a grassroots union still have to pay?

Yes. This is the most commonly misunderstood point. The obligation to pay the 2% trade union funding arises as soon as the business has employees within the scope of compulsory social insurance, even when the business does not yet have a single union member and has not established a grassroots union.

The reason lies in the nature of this contribution: trade union funding is a financial source for caring for and representing workers in general, so the law ties it to the employment of workers, not to whether the business has managed to organise an internal union. A newly established business that has not yet recruited any members must still pay the full 2% each month under Article 29 of Luật 50/2024/QH15.

This also means a business cannot use the excuse that "the company does not have a union yet" to avoid paying. If it has not paid because of a misunderstanding, the outstanding amount will accumulate and may become grounds for a penalty, as set out below.

Which salary fund is the 2% calculated on, and is there a ceiling?

The 2% is calculated on the business's salary fund used as the basis for compulsory social insurance contributions, that is, the total monthly salary used to calculate social insurance contributions for all employees within the participating scope, not the entire actual payroll cost.

Trade union funding has no ceiling of its own. However, because it is calculated on the social insurance salary fund, and each person's social-insurance salary base is capped at a maximum of 20 times the reference level, there is indirectly a limit at the individual level.

According to the payroll sector's standard figures for 2026 (reference level 2,530,000 VND/month, social insurance contribution ceiling 50,600,000 VND/month, applicable from 1 July 2026), however high an employee's social-insurance salary may be, the trade union funding calculated for that person is capped in line with the ceiling of 50,600,000 VND/month. It follows that the maximum trade union funding for a single employee is about 2% × 50,600,000 = 1,012,000 VND/month (a figure derived from the social insurance ceiling). For high earners above the ceiling, the excess adds nothing to the trade union funding.

Example: how much trade union funding does a mechanical-engineering business with 45 employees pay?

Suppose a mechanical-engineering business in Ho Chi Minh City has 45 employees within the scope of compulsory social insurance. The business's total salary fund used as the basis for social insurance contributions is 200,000,000 VND/month.

The trade union funding payable:

• Per month: 2% × 200,000,000 = 4,000,000 VND/month.
• Per year: 4,000,000 × 12 = 48,000,000 VND/year.

Now suppose that among those 45 people there is a production manager with a nominal social-insurance salary of 60,000,000 VND/month. Because the social-insurance salary base is capped at the ceiling of 50,600,000 VND/month (from 1 July 2026), the trade union funding calculated for this person alone is at most 2% × 50,600,000 = 1,012,000 VND/month, rather than being calculated on the 60 million.

The 4,000,000 VND/month figure above is the amount the business pays, and it is recorded as a deductible expense when determining income subject to corporate income tax (provided it is paid correctly and supported by valid documents). This is a financial obligation that can be budgeted for in advance and built into the annual personnel-cost plan.

How does trade union funding differ from trade union membership dues?

These are two entirely different amounts that are very often lumped together:

Trade union funding
- Who pays: the employer (the business/unit).
- Rate: 2% of the salary fund used as the basis for compulsory social insurance contributions.
- Nature: a mandatory obligation under Article 29 of Luật Công đoàn 2024, recorded as a business expense.
- Arises even when the business has no union members at all.

Trade union membership dues
- Who pays: the employees themselves who are union members, deducted from their salary.
- Arises only when an employee has voluntarily joined the union.
- Governed by the rules of the Vietnam General Confederation of Labour.

In short: trade union funding is the business's money, membership dues are the members' money. The business must still pay the 2% funding even if no members have joined.

On the 2026 membership dues rate, one unsettled point should be noted: the reference sources currently contradict one another (some cite a rate of 1% of salary under a decision of the General Confederation, others cite 0.5%), and the specific cash ceiling on membership dues also depends on the shift from the "base salary level" to the "reference level". Since a single authoritative original text has not yet been cross-checked, businesses should not assert a fixed figure for membership dues on their own, but should confirm with the immediate superior trade union. This has no bearing on the business's 2% funding obligation, as these are two independent amounts.

When is trade union funding paid, and where is it remitted?

On timing and method: under Nghị định 105/2026/NĐ-CP, a business pays trade union funding once a month, at the same time as compulsory social insurance contributions for its employees. The deadline is the last day of the following month. Some units in the agricultural sector may be allowed to pay quarterly.

One threshold to remember: where funding is not paid, or not paid in full, and more than 60 days pass from the due date, it is treated as failure to pay trade union funding, and this is precisely the basis on which the authorities draw up a record and impose a penalty.

On where to remit: for a business that already has a grassroots union, the collection and distribution of funding follow the union organisation's tiered arrangements. For a business without a grassroots union, Nghị định 105/2026/NĐ-CP assigns collection to the Vietnam General Confederation of Labour on a tiered basis, usually through the immediate superior trade union or the district-level Labour Federation managing the area. However, the specific address and collection account number are not stated consistently in the guidance available; a business should contact the local Labour Federation where its head office is located to be given the correct remittance account. This is a step worth taking early, especially for new businesses or those that have not paid to date.

Can a business in difficulty be exempted from, or have reduced or suspended, its contributions?

Yes, and this is a notable new feature of Luật Công đoàn 2024 compared with the old law. Under Article 30 of Luật Công đoàn số 50/2024/QH15, a business or unit facing difficulties may be considered for exemption, reduction or suspension of trade union funding in cases such as dissolution, bankruptcy, or difficulty for economic reasons or force majeure. The suspension period is no longer than 12 months.

This means that when a business is genuinely in difficulty, the right course is not to quietly stop paying and wait to be caught, but to proactively file a request for exemption, reduction or suspension under Article 30. Following the correct procedure gives the business a legal basis rather than falling into the category of late payment and being penalised. Businesses in this situation should work with the immediate superior trade union for guidance on the paperwork and the specific conditions.

What is the penalty for not paying, or paying late?

The penalty is set out in Article 38 of Nghị định 12/2022/NĐ-CP (Decree 12/2022/NĐ-CP), calculated as a percentage of the total amount payable at the time the record is drawn up. Note that the levels stated in Nghị định 12/2022 apply to individuals; under Article 6, Clause 1 of that decree, the penalty for an organisation is twice that for an individual. Since a business is an organisation, the figures to use are the doubled ones:

Late payment, payment at the wrong level, or paying for fewer than the required number of people:
- The business is fined 24% to under 30% of the total amount payable, up to 150,000,000 VND (twice the individual level of 12% to under 15%, up to 75 million).

Failing to pay trade union funding for the entire body of employees who fall within the scope:
- The business is fined 36% to 40% of the total amount payable, up to 150,000,000 VND (twice the individual level of 18% to 20%, up to 75 million).

Besides the fine, the business must also carry out a remedial measure: within 30 days at the latest from the date of the penalty decision, it must pay the union organisation the outstanding funding plus interest, calculated at the highest demand-deposit interest rate published by the state-owned commercial banks at the time of the penalty. In other words, the unpaid amount is not written off; it must still be paid in full together with interest.

Set side by side, it becomes clear: for a business with a large salary fund, the back-payment plus interest plus the percentage-based fine is usually far higher than paying in full and on time from the outset.

What should a business do to pay correctly and in full?

A concise process for HR and accounting:

1. Identify the correct basis salary fund. Trade union funding is calculated on the compulsory social insurance salary fund, not the total actual payroll. Review the list of people within the social insurance scope so the headcount is neither understated nor overstated.
2. Register with the immediate superior trade union. Even without a grassroots union, contact the district-level Labour Federation where your head office is located to find out the account and how to remit.
3. Pay monthly, in the same cycle as social insurance. Fold trade union funding into the same monthly social insurance process so nothing is missed; remember the deadline is the last day of the following month, and the 60-day threshold.
4. Keep full remittance records. These are the basis for recording deductible expenses and for demonstrating compliance when the authorities inspect.
5. If the business is in difficulty, file the paperwork under Article 30 to request exemption, reduction or suspension rather than stopping payment on your own.
6. Consider handing payroll and the associated contributions to a specialist provider if your in-house team is thin, to avoid missing a payment cycle and to reduce the risk of miscalculating the basis salary fund.

Frequently asked questions

Does a business without a grassroots union have to pay the 2% trade union funding?

Yes. The obligation to pay 2% arises when the business has employees within the scope of compulsory social insurance, regardless of whether a grassroots union has been established or any members exist. This is provided for in Article 29, Clause 1, Point b of Luật Công đoàn 2024.

Is the 2% trade union funding calculated on actual pay or on the social insurance salary?

On the salary fund used as the basis for compulsory social insurance contributions, not the entire actual pay. So when reviewing, a business should take each person's correct social insurance salary, and note that each person has a social insurance ceiling of 50,600,000 VND/month (from 1 July 2026).

Do employees have to have their salary deducted to pay trade union funding?

No. The 2% trade union funding is the business's contribution and is not deducted from employees' salaries. What an employee may have to pay is the trade union membership dues, but only if they are already a member; the 2026 dues rate is currently cited differently across sources, so it should be confirmed with the superior trade union.

How many days late does trade union funding have to be before it counts as non-payment?

More than 60 days from the due date without paying, or without paying in full, is treated as failure to pay trade union funding. The deadline for each month is the last day of the following month, under Nghị định 105/2026/NĐ-CP.

In labour sub-leasing, which party pays the trade union funding?

Trade union funding is the responsibility of the employer that signs the labour contract and pays compulsory social insurance for the employee. In a labour sub-leasing relationship, whichever business the employee falls under for social insurance is the one at which the 2% trade union funding is calculated and paid, based on that business's social insurance salary fund. Businesses should set this responsibility out clearly in the service contract.

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The 2% trade union funding is an amount that can be budgeted for in advance and built into the annual personnel-cost plan, as long as the business identifies the correct basis salary fund and pays steadily each month. If your HR team is unsure about the salary fund used as the basis for social insurance contributions, or wants to re-check the business's full set of contribution obligations, you can see how we break this down in our [outsourced payroll service](/tinh-luong-thue-ngoai/) and [labour cost calculator](/tinh-chi-phi-lao-dong/) tool, to get complete figures before setting the budget.

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