SOCIAL SECURITY – MAXIMUM SALARY INCREASE
Under the current Social Security Law (No. 34/NA, 26 July 2013) (“Social Security Law”) and Implementing Guidelines (No. 2751/MLSW, 24 July 2015) (“Implementing Guidelines”), locals as well as foreign employees are required to contribute to the Social Security Fund (the “Fund”). Under the Social Security Law and Implementing Guidelines, the employer must contribute 6% of the employee’s salary to the Fund and an additional 5.5% (of the employee’s salary) must be withheld and contributed to the SS Fund. The maximum base salary to be used in the calculation of social security benefits is LAK 4,500,000 per month (which has increased from LAK 2,000,000 as of 1 January 2017). Therefore, the maximum contribution payable by the employer for employees earning LAK 4,500,000 or more is LAK 270,000 per month per employee.
Should you have any questions about social security contributions or other labor employment issues in the Lao PDR, please contact Danyel Thomson, Head of Regional Employment Practice Group, or Briana Olsen in Vientiane.