Payroll and Benefits Guide - Vietnam

Vietnam
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Currency

Vietnamese Dong
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Capital

Hanoi
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Employer Taxes

21.50%
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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Vietnam is the 15th most populous country in the world, with a population of over 97 million people.

The official name of Vietnam is the Socialist Republic of Vietnam.

The capital city of Vietnam is Hanoi, while Ho Chi Minh City is the largest city.

Vietnam is the world’s second-largest exporter of coffee, after Brazil.

Vietnam is famous for its traditional hat called the conical hat or “non la,” which provides shade from the sun.

The Vietnamese currency is called the Vietnamese dong (VND).

Vietnam

Contributions

Employee Payroll Tax

Contribution TypeRate
Social Insurance*8.00%
Health Insurance1.50%
Unemployment Insurance1.00%

Employer Payroll Tax

Contribution TypeRate
Social Insurance*0.50%
Social Insurance*14.00%
Social Insurance*3.00%
Health Insurance3.00%
Unemployment Insurance1.00%

Payroll

Payroll Cycle

The payroll cycle is Monthly.

13th Salary

In Vietnam, it is customary to pay a 13th-month salary at the Lunar New Year or the end of the year.

Work Hours and Week

In Vietnam, working hours must not exceed eight hours a day or 48 hours per week.

Overtime

Overtime is paid at a rate of 150% salary on weekdays, 200% on weekends, and 300% on holidays.
Vietnam

Leave

Paid Time Off

Annual leave is a minimum of 12 working days per year. This increases by one day for every five years of consecutive service.

Public Holidays

There are 10 holidays.

Sick Days

Vietnamese employees who are signed off sick by a doctor are entitled to sick leave paid by the Social Insurance Authority, equal to 75% of the salary preceding months salary, in the amount of:

  • Up to 30 days per year for individuals with less than 15 years of contributions to the Social Insurance Fund.
  • Up to 40 days per year for individuals with 15 to 30 years of contributions to the Social Insurance Fund.
  • Up to 60 days per year for individuals with more than 30 years of contributions to the Social Insurance Fund.
  • Up to 180 days per year for employees needing long-term treatment for specific illnesses listed by the Ministry of Health.
  • After 180 days, continued treatment entitles employees to paid sick leave at a lower pay rate of 45% to 65% of their salary.

Maternity Leave

Female employees are entitled to six months of prenatal (not more than 2 months) and postnatal maternity leave. An additional month leave is given where there are multiple births.

Vietnamese nationals receive 100% payment from Social Insurance Authority based on their average monthly salary during maternity leave, capped at 20 times the minimum common salary.

Payment for expatriate employees on maternity leave is determined by an agreement between the employer and the worker.

Paternity Leave

New fathers are entitled to leave of:

  • For natural births: 5 days
  • For birth by cesarean section: 7 days
  • For natural birth to twins: 10 days
  • For the birth of twins by cesarean section: 14 days.
  • For the birth of more than two children at one time: additional 3 days of leave for every additional child (from the third child onwards).
  • Vietnamese nationals receive 100% payment from the Social Insurance Authority based on the salary received in the month prior to the start of the paternity absence.

Parental Leave

Parental leave in Vietnam allows up to 20 working days per year until the child turns three and up to 15 working days per year until the child turns seven, with payment at 75% of the salary by the Social Insurance Authority based on the preceding month’s earnings.

Termination

Termination Process

Termination justification is based on the criteria outlined in the labor law regulations, including repeated failure to perform work to the required standard or misconduct.

Notice Period

Notice periods vary based on the type of contract:

  • 45 days for an indefinite labor contract
  • 30 days for a definite labor contract (between 1-3 years)
  • 3 working days for the seasonal contract (contract of less than one year)
  • No notice is required during the probation period

Severance Pay

Employers in Vietnam are required to provide severance payments to employees with regular employment of 12 months or more, with the payment equivalent to half a month’s wages per year of service. Both parties contribute to a severance fund, and employees receive the calculated sum upon termination.

Probation Period

Probation Period

The probation period in Vietnam ranges from six to 60 days (up to 180 days for managerial roles) based on role complexity, with wages during probation agreed upon in writing and not less than 85% of the full-time permanent salary.

Immigration

Foreign nationals typically require a work permit before entering Vietnam to take up employment. The Vietnamese work permit is a legal document authorizing the person to engage in employment and receive compensation from a company in Vietnam.

Different work visas/permits are available.

For a Work Visa, the below documents need to be completed:

Passport

Employment Contract

Educational Qualifications

Criminal Record Check

For Work Permits

  • HN visas for meetings and conferences
  • DT visas for investors
  • DN visas for individuals working with Vietnam businesses
  • DH visas for students and interns
  • NG1-NG4 visas for diplomatic purposes
  • LV1-LV2 visas for individuals working with Vietnamese authorities
  • LD visas for foreign workers

VAT

The standard rate of VAT in Vietnam is 10%.