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Decree No. 105/2026/ND-CP Guiding the Law on Trade Unions Regarding Trade Union Finance

On 31 March 2026, the Government issued Decree No. 105/2026/ND-CP, detailing and providing guidance for the implementation of several provisions of the Law on Trade Unions concerning trade union finance. The Decree officially takes effect on 16 May 2026.

1. Entities Required to Pay Trade Union Funds

Article 2 of Decree No. 105/2026/ND-CP specifies that, effective from 16 May 2026, the following entities are required to contribute trade union funds:

• Enterprises;
• Public service units that are not fully (100%) funded by the state budget for salary payments;
• Cooperatives and unions of cooperatives;
• Other agencies, organizations, and entities that employ workers in accordance with the law.

Regardless of whether an enterprise has established a trade union, it is still required to contribute trade union funds at the rate of 2%, except for cases exempt from this obligation under Article 11 of Decree No. 105/2026/ND-CP.

2. Entities Exempt from Trade Union Fund Contributions

Article 11 of Decree No. 105/2026/ND-CP provides that the following entities are exempt from paying trade union fund contributions:

• Enterprises, cooperatives, and cooperative unions undergoing dissolution in accordance with the Law on Enterprises 2020 and the Law on Cooperatives 2023 may be exempted from paying the outstanding trade union contributions by the Vietnam General Confederation of Labor or the provincial Labor Federation in accordance with the delegation of the Vietnam General Confederation of Labor when their trade unions participate in the debt settlement plan (including trade union dues) of the dissolving enterprises, cooperatives, or cooperative unions.
• Enterprises, cooperatives, and cooperative unions undergoing bankruptcy procedures in accordance with the Law on Enterprises 2020, Law on Cooperatives 2023, Law on Bankruptcy 2014, and Law on Bankruptcy and Rehabilitation 2025 may be exempted from paying the outstanding trade union contributions by the Vietnam General Confederation of Labor or the provincial Labor Federation in accordance with the delegation of the Vietnam General Confederation of Labor when their trade unions participate in the debt settlement plan (including trade union dues) of the dissolving enterprises, cooperatives, or cooperative unions.

3. Contribution Rate, Payment Method, and Payment Deadline

Trade Union Fund Contribution = 2% × the payroll used as the basis for calculating employees’ compulsory social insurance contributions.

• The deadline for paying trade union contributions is no later than the last day of the following month for agencies, organizations, units, enterprises, cooperatives, and cooperative unions that pay trade union contributions monthly
• The deadline for paying trade union contributions is no later than the last day of the following month after the cycle for the quarterly payment (once every 03 months) method for agricultural, forestry, fishery, and salt-production organizations and enterprises that pay salaries according to the production and business cycle and pay trade union contributions quarterly (once every 03 months).

4. Clearer Provisions on Late Payment and Non-Payment of Trade Union Fund Contributions

• Late payment of trade union contributions refers to the act of a trade union contribution payer failing to pay or paying insufficient amounts after the deadline for payment of trade union contribution.
• Non-payment of trade union fund contributions includes the following cases:
  • Failure to withhold or pay trade union contributions.
  • Failure to pay or fully pay the amount due according to the rates prescribed in the Law on Trade Union within 60 days from the expiration of the deadline.
  • Failure to pay or fully pay trade union contributions for the required people within 60 days from the expiration of the deadline.

5. Additional Provisions on Reduction, Exemption, and Temporary Suspension of Trade Union Fund Contributions for Dissolved or Bankrupt Enterprises

• Reduction of contribution rate: Enterprises may be considered for a reduction of up to 20% of the trade union fund contribution rate in certain cases of exceptional financial hardship after the approved period of temporary suspension has expired. The reduction may be granted for a maximum period of six months.
• Exemption from contributions: Enterprises, cooperatives, and unions of cooperatives undergoing dissolution or bankruptcy may be considered for an exemption from outstanding trade union fund contributions.
• Temporary suspension of contributions: Enterprises may apply for a temporary suspension of trade union fund contributions if they experience difficulties resulting from organizational restructuring, technological changes, economic crises, natural disasters, fires, epidemics, or crop failures. An enterprise may be eligible for a temporary suspension if: It suspends production or business operations for 30 days or more, and at least 50% of employees subject to compulsory social insurance are required to take temporary leave; or it suffers losses exceeding 50% of the total value of its assets due to natural disasters, fires, epidemics, or crop failures. The maximum period for a temporary suspension of trade union fund contributions is 12 months.

6. Penalties for Violations

Pursuant to Article 38 of Decree No. 12/2022/ND-CP, dated 17 January 2022, on administrative penalties for violations in the fields of labor and social insurance, the following penalties apply to organizations:

• Late payment of trade union fund contributions, payment at an incorrect contribution rate, or failure to make contributions for the full number of employees subject to the contribution requirement: A fine equal to twice the fine applicable to an individual (maximum: VND 150 million). (For individuals: from 12% to less than 15% of the total amount of trade union fund contributions payable at the time the administrative violation record is prepared, maximum: VND 75 million.)

• Failure to pay trade union fund contributions for all employees subject to the contribution requirement: A fine equal to twice the fine applicable to an individual (maximum: VND 150 million). (For individuals: from 18% to 20% of the total amount of trade union fund contributions payable at the time the administrative violation record is prepared, maximum: VND 75 million.)