Vietnam

To employ staff in Vietnam, a business must be registered with:

• Department of Planning and Investment
• General Department of Taxation
• Social Insurance Fund
• Health Insurance Fund
• Trade Union (if applicable)

Foreign-owned enterprises require:

• Investment registration certificate
• Enterprise registration certificate
• Legal representative in-country

A local bank account must be opened to process payroll and pay taxes.

Registration typically takes 1–2 months. Representative offices may be used for market research and liaison but cannot generate revenue.

Standard working hours:

• 8 hours/day
• 48 hours/week (Monday to Saturday)

Overtime:

• Max 4 hours/day
• Max 40 hours/month
• Max 200 hours/year (300 in special industries)

Overtime premium:

• 150% (normal days)
• 200% (weekends)
• 300% (public holidays)
• 30% premium for night work (22:00–06:00)

Rest:

• 1 day off/week
• 30-minute daily break for shifts over 6 hours

Probationary period:

• 6–60 days depending on job level
• Must be written and paid at ≥85% of official wage

Public Holidays

Vietnam observes 11 public holidays annually. When a public holiday falls on a weekend, the day on which it is observed is at the discretion of the prime minister.

Foreign employees in Vietnam are entitled to 01 traditional public holiday and 01 National Day of their country.

Personal Income Tax (PIT)

• Residents: Progressive rates from 5% to 35%
• Non-residents: Flat 20% on Vietnam-sourced income
• Tax Reliefs:
  • Personal: VND 11,000,000/month
  • Dependent: VND 4,400,000/dependent/month

Employer Responsibilities

• File PIT monthly (by 20th of following month) or quarterly (by 30th of following quarter)
• Annual finalization due by March 30 of the following year

Social Security Contributions

• Employer Contributions:
  • Social Insurance: 17.5%
  • Health Insurance: 3%
  • Unemployment Insurance: 1%
  • Trade Union: 2%
• Employee Contributions:
  • Social Insurance: 8%
  • Health Insurance: 1.5%
  • Unemployment Insurance: 1%

Caps

• Social/Health Insurance: VND 46.8M/month (20x basic wage)
• Unemployment Insurance: VND 99.2M/month (20x regional minimum wage)

Foreigners pay HI only; from 2022, SI may apply under certain conditions.

Maximum monthly salary subject to Social and Health Insurance: 46,800,000 VND
Maximum salary subject to Unemployment Insurance: 99,200,000 VND

Employer will contribute 2% based on salary subject to Social Insurance to the Trade Union.

If the company has its own union, the employee will be subject to Trade Union costs at 1% of gross salary, capped at 234,000 VND.

Payroll is typically monthly.

Salary must be paid by the last working day of the month

Payslip must show:

• Gross salary
• PIT and contributions
• Allowances and overtime
• Net salary

Reporting includes:

• PIT: monthly return by the 20th of following month
  
• SI/HI/UI: monthly declaration to Social Insurance Department
• Labour Report: twice/year for locals and expats
• Social Insurance Reports: Increase/Decrease/Claiming
• PIT Finalization Report: Due by March 31st
  

Two scenarios:

• Individual finalisation
• Company finalisation (for ex-employees)

Records must be retained for at least 5 years

Hiring

Employers must sign a written labour contract before the first working day. Required documents:

• ID/passport
• Tax code
• Bank details
• Health check certificate

Contract types:

• Indefinite
• Fixed-term (≤36 months)
• Seasonal/project-based

Termination

Must be in writing and follow legal notice:

• 30 days (fixed-term contract)
• 45 days (indefinite contract)

Termination without cause may require:

• Severance (0.5 month per year worked)
• Job-loss allowance (1 month per year)
• Final payments on last working day

Minimum Wage (2025)

Four regional levels:

Applies to 26 working days/month.

Annual Leave

• 12 days/year (increases with seniority)
• 1 extra day every 5 years
• Leave payout on termination
• Personal leave: marriage (3 days), child marriage (1), funerals (3)

Sick Leave

• Paid by Social Insurance Fund
• Formula: Salary for SI contributed/24 × sick days × 0.75
• Not over 30 days (short term) or 180 days (long term)

Maternity Leave

• 6 months paid at 100% average salary (last 6 months)
• 7 months for twins (or more)
• Miscarriage leave: based on medical certificate
• Pregnancy check-up: max 5 days
• Fathers: 5–14 days paternity leave
• SI maternity allowance = Avg. SI salary × 6 + (minimum wage × 2)

All payments require medical certificates.

Foreigners must obtain:

• Work Permit (valid for up to 2 years)
• Temporary Residence Card (TRC)

Work permit costs are the responsibility of the Company when hiring foreign workers.

Visa fee & temporary residence card costs paid by the company are considered a benefit and included in taxable income.

Exemptions apply for:

• Spouses of Vietnamese citizens
• Short-term experts (≤30 days per trip, ≤90 days/year)

Steps:

1. Job position approval
2. Permit application to DoLISA
3. Entry visa or TRC processing
4. Onboarding with tax, SI, and HI

Processing time: ~2–3 weeks

Employers must retain foreigner files and renew permits 30+ days before expiry.

• Public holidays: 11 days per year (official)
• Foreigners get 2 extra (their home country holidays)
• Payment in cash not permitted for WPS entities
• Payroll records must be in Vietnamese
• Labour Code governs employment (effective 1 Jan 2021)
• Social fund caps and thresholds updated annually
• Regional wage zones may affect payroll rates
• Digital submission via eTax and VSSID portals required

Further Information

For more information, or assistance with Vietnam tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.