Vietnam
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See how hiring works in Vietnam
Learn about local payroll, taxes, and employment laws in Vietnam
Minimum Wage Standards
Vietnam's minimum wage varies by region, with four tiers based on geographic location and cost of living. The rates are set by the government and reviewed annually.
Regional Minimum Wages (Monthly):
- Region I (Hanoi, Ho Chi Minh City urban districts): VND 4,680,000/month
- Region II (Major provincial cities): VND 4,160,000/month
- Region III (Provincial towns, district cities): VND 3,640,000/month
- Region IV (Rural areas): VND 3,250,000/month
Income Tax Structure
Vietnam applies a progressive personal income tax system ranging from 5% to 35%. Tax is calculated on annual taxable income after deductions for personal allowances and dependents.
| Gross Annual Income | Personal Income Tax Rate |
|---|---|
| Up to VND 60,000,000 | 5% |
| VND 60,000,001 - 120,000,000 | 10% |
| VND 120,000,001 - 216,000,000 | 15% |
| VND 216,000,001 - 384,000,000 | 20% |
| VND 384,000,001 - 624,000,000 | 25% |
| VND 624,000,001 - 960,000,000 | 30% |
| Over VND 960,000,000 | 35% |
Employer Contributions
Total employer social security contributions amount to approximately 21.5% of the gross salary, calculated on the employee's total remuneration up to the statutory cap.
Mandatory Employer Contributions:
- Social Insurance: 17.5%
- Health Insurance: 3%
- Unemployment Insurance: 1%
Employee Contributions:
- Social Insurance: 8%
- Health Insurance: 1.5%
- Unemployment Insurance: 1%
Important Note: These figures are estimates for informational purposes. Actual costs vary based on employment terms and specific circumstances. Contact our team for accurate calculations tailored to your situation.
Overtime & Working Hours
Standard working hours are 48 hours per week, with a maximum of 8 hours per day. Overtime is strictly regulated under Vietnamese labor law.
Overtime Rates:
- Weekday overtime: 150% of normal hourly wage
- Weekend overtime: 200% of normal hourly wage
- Public holiday overtime: 300% of normal hourly wage
Employees may work a maximum of 40 hours of overtime per month and no more than 200 hours per year (extendable to 300 hours in special cases with government approval).
Maternity Leave
Female employees are entitled to 6 months (180 days) of maternity leave with full pay, funded through the social insurance system. The benefit is paid at 100% of the average salary of the 6 months preceding the leave.
Employees who have contributed to social insurance for at least 6 months within the 12 months before giving birth are eligible. For twins or more, an additional 30 days per child is granted.
Paternity Leave
Fathers are entitled to paid paternity leave through social insurance, with the duration depending on the birth circumstances:
- 5 working days for normal delivery
- 7 working days for cesarean section
- 10 working days for twins
- 14 working days for twins with cesarean section
Sick Leave
Employees are entitled to paid sick leave funded through the social insurance system. The duration depends on years of contribution and working conditions:
- Normal conditions: 30 days/year (under 15 years of contributions) or 40 days/year (15+ years)
- Hazardous conditions: 40 days/year (under 15 years) or 50 days/year (15+ years)
- Long-term illness: up to 180 days regardless of contribution period
Sick leave is paid at 75% of the employee's salary on which social insurance contributions are based.
Bereavement Leave
Employees are entitled to bereavement leave as follows:
- 3 days for the death of a parent (including in-laws), spouse, or child
Termination Framework
Vietnamese labor law requires employers to have valid grounds for termination. Arbitrary dismissal is not permitted. Employers must follow the procedures set out in the Labor Code.
Valid grounds for termination include:
- Repeated failure to perform duties as assigned
- Prolonged illness (12 consecutive months for indefinite contracts, 6 months for definite contracts)
- Force majeure events (natural disasters, fire, epidemics)
- Organizational restructuring or economic reasons
- Disciplinary dismissal for serious violations
Legal Requirement: Employers must consult with the workplace trade union before terminating an employee. Failure to follow proper procedures may result in the termination being declared unlawful, requiring reinstatement and back pay.
Notice Period Requirements
The required notice period depends on the type of employment contract:
- Indefinite-term contracts: at least 45 days' notice
- Definite-term contracts (12-36 months): at least 30 days' notice
- Contracts under 12 months: at least 3 working days' notice
If proper notice is not provided, the terminating party must compensate the other with an amount equivalent to the wages for the unserved notice period.
Severance Compensation
Severance pay is calculated at half a month's salary for each year of service. The salary used for calculation is the average of the 6 consecutive months' salary prior to termination.
Severance pay applies when the employer terminates the contract for reasons other than disciplinary dismissal, or when a definite-term contract expires and is not renewed. Employees who have contributed to unemployment insurance have their insured period deducted from the severance calculation.
Risk Management: To minimize unforeseen financial exposure from terminations, our employer of record service includes a Severance Reserve for all employment agreements. Unused reserve amounts are returned to you if employees resign or are not entitled to severance.
Paid Annual Leave
Employees are entitled to a minimum of 12 working days of paid annual leave per year under normal working conditions. Employees working in hazardous or dangerous conditions receive 14 or 16 days.
For every 5 years of service with the same employer, an employee is entitled to an additional day of annual leave. Unused leave may be carried over or compensated upon termination.
Public Holidays
Vietnam observes 11 official public holidays annually.
National public holidays include:
- New Year's Day (January 1)
- Tet Holiday - Lunar New Year (5 days, typically late January/February)
- Hung Kings Commemoration Day (10th day of 3rd lunar month)
- Reunification Day (April 30)
- International Labor Day (May 1)
- National Day (September 2 and the day before or after)
Onboarding Timeline
The onboarding process is typically completed within 2-5 business days following client execution of the Statement of Work.
Compensation Structure
Salaries in Vietnam are typically paid on a monthly basis. Employers are required to pay employees regularly on the agreed-upon date as specified in the employment contract.
The 13th month salary (Tet bonus) is customary and widely practiced in Vietnam, typically paid before the Lunar New Year. While not strictly mandated by law, it is a deeply rooted cultural expectation and is included in most employment agreements.
Employment Contract Specifications
Employment contracts in Vietnam must be in writing and are required to be in Vietnamese. For foreign employees, a bilingual version may be used, but the Vietnamese version prevails in case of discrepancy.
Essential contract elements include:
- Employee and employer identification
- Job title and description of duties
- Workplace location
- Contract duration (indefinite or definite-term)
- Salary, allowances, and payment schedule
- Working hours and rest periods
- Social insurance, health insurance, and unemployment insurance
- Training and development provisions
Vietnam recognizes two types of contracts: indefinite-term and definite-term (up to 36 months). A definite-term contract may only be renewed once; after that, it must become indefinite-term.
Probationary Period
Probation periods in Vietnam vary based on the nature of the work:
- Up to 60 days for positions requiring specialized or technical skills at college level or above
- Up to 30 days for positions requiring vocational training or intermediate professional qualifications
- Up to 6 working days for simple or unskilled work
During the probation period, the employee's salary must be at least 85% of the official salary for the position. Either party may terminate the probation arrangement without notice or compensation.
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Frequently Asked Questions
These are the most commonly asked questions about the Employer of Record
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Is it free to contact MB Remote?
Yes. Contacting us is completely free and without obligation. We’ll discuss your needs and explain how our EOR solution works before anything else.
How long does it take to hire an employee?
Hiring can usually be completed within a few days, depending on the country and local requirements.
What is an Employer of Record (EOR)?
An Employer of Record is a legal entity that employs workers on your behalf. MB Remote handles contracts, payroll, taxes, and local labor law compliance, while you manage the day-to-day work.
Who is the legal employer of the employee?
MB Remote is the legal employer, but the employee works exclusively for you as part of your team.
In which countries can you hire employees?
We support hiring in multiple countries. Contact us to check availability for a specific location.
How does payroll work?
We manage payroll, taxes, and social contributions in compliance with local regulations. You receive one simple monthly invoice.
Is my company still in control of the employee?
Yes. You manage tasks, schedules, and performance. We handle the legal and administrative side.