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Payroll in Vietnam
Running payroll in Vietnam means dealing with 4 different social insurance categories, 12 mandatory contribution types, and deadlines that don't match Western business calendars. You've just hired your first employee in Ho Chi Minh City, and now you're facing a payroll system that requires monthly filings, uses a complex tiered contribution structure, and has penalties that start at ₫500,000 for late submissions.
Vietnam's payroll requirements differ from other Southeast Asian countries in several important ways. The country requires a mandatory 13th-month salary payment, typically due in December or before Tet (Lunar New Year). Social insurance contributions are calculated on actual salary rather than a fixed amount, with rates that vary significantly between Vietnamese nationals and foreign workers.
Personal income tax uses a progressive system with rates up to 35%. But here's the good news: substantial deductions can dramatically reduce tax liability.
Vietnam payroll at a glance
Payment expectations in Vietnam are strictly monthly, with most employees receiving their salary between the 10th and 15th of each month. Vietnamese business culture places significant importance on timely payments, especially around major holidays like Tet. That's when employees expect their 13th-month bonus and any outstanding leave payments.
Key employer obligations:
- Monthly social insurance, health insurance, and unemployment insurance contributions
- Personal income tax withholding and monthly remittance
- 13th-month salary payment (minimum 1/12 of annual salary)
- Full employment contract registration with local authorities
One Global Payroll handles Vietnam's complex contribution calculations, ensures timely 13th-month payments, and manages all local filing requirements. You can focus on growing your Vietnamese team with confidence.
How does payroll work in Vietnam?
The Vietnam payroll cycle follows a monthly schedule. Most companies process payments on the 25th of each month or the last working day of the month.
Vietnam's Labor Code requires employers to pay salaries at least once per month. The payment must happen no later than 10 days after the end of the pay period. This means if your pay period ends on the 31st, employees must receive their salary by the 10th of the following month.
Monthly payroll cycle
Payroll processing
20th-25th of monthCalculate salaries, deductions, and contributions
Payment due
By 10th of following monthTransfer salaries to employee accounts
Payslip delivery
Within 3 days of paymentProvide detailed payslips to all employees
Are 13th month payments required?
Yes, Vietnam requires a 13th month payment (Tet bonus) for all employees. This isn't optional. It's mandated by labor law and deeply embedded in Vietnamese workplace culture.
Calculation and timing
The 13th month payment equals one month's basic salary, calculated based on the employee's salary in December. If an employee worked less than 12 months, the payment is prorated based on actual working time.
The payment must be made before Tet (Lunar New Year), typically in January or February 2026. Many companies pay it in December to help employees with holiday expenses.
Tax treatment
The 13th month payment is subject to personal income tax and social insurance contributions, just like regular salary. There's no special tax treatment or exemption for this mandatory bonus.
How does vacation pay work?
Vietnamese employees earn vacation pay based on their length of service. After one year of employment, workers get 12 days of paid annual leave, increasing by one day for every five years of service.
Vacation pay equals the employee's average daily wage over the 12 months preceding the leave. You calculate this by dividing the total salary (including allowances) by the actual working days in that period.
Vacation pay calculation
Average daily wage = Total salary in past 12 months ÷ Actual working days. Include all regular allowances and bonuses in the calculation.
Employees can carry forward unused vacation days to the following year. But you must pay compensation if they don't use accumulated leave within two years.
What payment methods are required?
Vietnamese law requires salary payments through bank transfer to employees' personal accounts. Cash payments are only permitted for companies with fewer than 10 employees or in remote areas where banking services aren't readily available.
International companies must pay salaries in Vietnamese dong (VND). While employment contracts can reference foreign currencies for convenience, actual payments must convert to VND using the official exchange rate on the payment date.
Payment method requirements
- Bank transfer to personal account
Mandatory for companies with 10+ employees
- Payment in Vietnamese dong
Use official exchange rate
- Maintain payment records
Keep for minimum 3 years
What must payslips include?
Vietnamese payslips must contain detailed information in Vietnamese language. Electronic payslips are acceptable if employees can access and print them easily.
Required payslip elements include:
- Employee's full name and position
- Basic salary and all allowances
- Overtime payments and shift premiums
- Social insurance, health insurance, and unemployment insurance deductions
- Personal income tax withheld
- Net salary amount
- Pay period and payment date
Payslip delivery deadline
Provide payslips within 3 working days of salary payment. Keep copies for at least 3 years as required by labor inspectors.
You must provide payslips even if the employee doesn't request them. Labor inspectors regularly check payslip compliance during workplace audits. Missing or incomplete payslips result in fines ranging from ₫5-10 million per violation.
What taxes apply in Vietnam?
Income tax in Vietnam ranges from 5% to 35%, with the top rate kicking in at ₫1,920,000,000 annually. Your company handles all withholding and monthly reporting to the General Department of Taxation.
Income tax brackets
Vietnam uses progressive tax rates with seven brackets. The tax-free allowance is ₫132,000,000 per year (₫11,000,000 monthly).
| Annual Income (₫) | Monthly Income (₫) | Tax Rate |
|---|---|---|
| ₫0 - ₫60,000,000 | ₫0 - ₫5,000,000 | 5% |
| ₫60,000,001 - ₫120,000,000 | ₫5,000,001 - ₫10,000,000 | 10% |
| ₫120,000,001 - ₫216,000,000 | ₫10,000,001 - ₫18,000,000 | 15% |
| ₫216,000,001 - ₫384,000,000 | ₫18,000,001 - ₫32,000,000 | 20% |
| ₫384,000,001 - ₫624,000,000 | ₫32,000,001 - ₫52,000,000 | 25% |
| ₫624,000,001 - ₫960,000,000 | ₫52,000,001 - ₫80,000,000 | 30% |
| Over ₫960,000,000 | Over ₫80,000,000 | 35% |
Withholding requirements
You're responsible for withholding personal income tax from all employee salaries. Calculate tax monthly using the cumulative method - this means recalculating total tax due from January to current month, then subtracting previous withholdings.
File monthly tax returns by the 20th of the following month. Submit Form 05/KK-TNCN along with payment to your local tax office. Late filing incurs penalties of ₫1,000,000 to ₫5,000,000.
Annual reconciliation happens by March 31st each year. Employees can file their own returns if they want to claim additional deductions, but you still handle the monthly withholding throughout the year.
Tax registration
Register for payroll tax within 15 days of hiring your first employee. You'll need your business license, company seal, and legal representative's ID.
Submit Form 08/ĐK-TCT to your local Department of Taxation. Processing takes 5-7 business days. You can't run payroll legally without this registration number.
Required before first payroll
Tax registration must be complete within 15 days of hiring. Late registration means ₫5-10 million in penalties plus 20% daily interest on unpaid taxes.
Special tax considerations
Non-resident employees pay flat 20% tax on Vietnamese-source income with no personal allowance. They become tax residents after 183 days in Vietnam during any 12-month period.
Tax treaties can reduce withholding rates for certain nationalities. Vietnam has treaties with 83 countries including the US, UK, Australia, and most EU nations. Check treaty benefits before withholding.
Local taxes don't exist - personal income tax goes entirely to the national government.
Common tax mistakes
Incorrect resident status is the biggest error. Many companies apply resident rates to short-term workers who should pay the 20% non-resident rate. Penalty: 20% of underpaid tax plus interest.
Missing monthly deadlines costs ₫1-5 million per late filing. Set up automatic reminders for the 20th of each month.
Wrong allowance calculations happen when companies don't update the ₫11 million monthly allowance properly. Double-check this amount is applied correctly to each employee's monthly calculation.
Employer contributions in Vietnam
A ₫60,000,000 salary in Vietnam actually costs you ₫77,400,000. Here's the breakdown.
| Employee pays | Employer pays | |
|---|---|---|
| Social Insurance | 8% | 17.5% |
| Health Insurance | 1.5% | 3% |
| Unemployment | 1% | 1% |
| Trade Union | 1% | 2% |
Vietnam's employer contributions add 29% to every salary. That's one of the highest rates in Southeast Asia, but it covers solid benefits for your employees.
Contribution breakdown
| Contribution Type | Employer Rate | Employee Rate | Monthly Cap |
|---|---|---|---|
| Social Insurance | 17.5% | 8% | ₫8,900,000 |
| Health Insurance | 3% | 1.5% | ₫8,900,000 |
| Unemployment Insurance | 1% | 1% | ₫8,900,000 |
| Trade Union Fee | 2% | 1% | - |
| Total | 23.5% | 11.5% |
The 29% total includes both employer and employee portions. As the employer, you're responsible for collecting and remitting everything.
Total employer cost example
For a ₫60,000,000 annual salary:
- Base salary: ₫60,000,000
- Social insurance: ₫8,750,000
- Health insurance: ₫1,500,000
- Unemployment: ₫500,000
- Trade union: ₫1,000,000
- Total employer cost: ₫71,750,000
- Cost multiplier: 1.20 (employer pays 20% more than base salary)
Contribution caps and ceilings
All insurance contributions cap at ₫8,900,000 monthly salary (₫106,800,000 annually). This significantly reduces costs for high earners.
For executives earning ₫200,000,000 annually, you'll only pay contributions on ₫106,800,000. The effective contribution rate drops to about 12.5% instead of 23.5%.
Trade union fees don't have caps. You'll pay 2% on the full salary regardless of amount.
Registration requirements
You must register with three separate agencies within 15 days of hiring:
Vietnam Social Security (VSS)
- Required for all insurance contributions
- Bring employment contract and employee ID copy
- Processing takes 5-7 business days
Provincial Tax Department
- For personal income tax withholding
- Submit company registration and employee details
- Same-day processing available
Trade Union
- Register within 30 days of first employee
- Required even if employees don't join voluntarily
Documentation checklist
Employee ID copy, employment contract, company business license, and completed registration forms for each agency.
Payment deadlines
Monthly contributions: Due by the 20th of the following month. For January salaries, pay by February 20th.
Late payment penalties: 0.05% per day on the outstanding amount. A ₫10,000,000 contribution paid 10 days late costs an extra ₫50,000.
Annual reconciliation: Submit by March 31st for the previous year. This reconciles actual vs. provisional payments.
Penalty alert
VSS audits are increasing in 2026. Keep detailed records of all contribution calculations and payments.
Set up automatic bank transfers through your Vietnamese bank. Most employers use standing orders to avoid late fees and administrative headaches.
Skip the complexity. We manage tax calculations, contributions, and compliance in 150+ countries.
Leave and benefits in Vietnam
Employees in Vietnam get 12 days minimum vacation. That's nearly 2.5 weeks of paid leave to calculate.
But here's what catches many payroll teams off guard: Vietnam's leave system splits payment responsibility between you and social insurance. Get this wrong, and you'll either overpay or face compliance issues.
Annual leave
Vietnam requires 12 annual leave days for employees with under five years of service. Add one extra day for each additional five years, capping at 18 days total.
You pay 100% of regular salary during vacation. Calculate this using the employee's average daily wage from the three months before their leave.
Carryover and payout rules
Employees can carry over unused days to the next year, but must use them within the first quarter. If they don't, you're not required to pay out the unused days unless your employment contract specifies otherwise.
When someone leaves, you must pay out all unused vacation days at their current daily wage rate. This includes any carried-over days from the previous year.
Sick leave
Employees get up to 30 sick leave days per year. Here's where it gets tricky for payroll: you pay different rates depending on the situation.
For the first 30 days of illness, social insurance pays 75% of the employee's salary. You don't pay anything during this period, but you'll need to coordinate with social insurance for the payments.
Medical certification requirements
Employees need a medical certificate for sick leave lasting more than three consecutive days. For shorter periods, your company policy determines if you require documentation.
The medical certificate must come from a licensed healthcare facility. Keep copies for your records - labor inspectors often request these during audits.
Parental leave
Maternity leave
Female employees get six months of maternity leave at 100% pay. Social insurance covers this cost, not your company. You'll continue processing payroll, but social insurance reimburses the full amount.
Employees can take additional unpaid leave up to 12 months total if they choose.
Paternity leave
Male employees get five days of paid paternity leave. Unlike maternity leave, you pay this directly - social insurance doesn't cover paternity benefits.
| You pay | Social insurance pays | |
|---|---|---|
| Paternity leave | 100% | 0% |
| Maternity leave | 0% | 100% |
| Sick leave | 0% | 75% |
Public holidays 2026
Vietnam has 10 official public holidays in 2026. Employees who work on these days get double pay - their regular wage plus a holiday premium.
| Date | Holiday | Notes |
|---|---|---|
| January 1 | New Year's Day | Fixed date |
| January 28-February 3 | Tet Holiday | 7 consecutive days |
| April 30 | Reunification Day | Fixed date |
| May 1 | International Labor Day | Fixed date |
| September 2 | National Day | Fixed date |
The Tet holiday period is the big one for payroll planning. Most businesses close for the full week, but essential services that operate pay significant overtime premiums.
Mandatory benefits affecting payroll
13th month bonus
You must pay a 13th month bonus by January 10th of the following year. Calculate this as one month's salary based on the employee's December wage rate.
This isn't optional - it's required by labor law. Factor this into your annual payroll budget and cash flow planning.
Meal and transportation allowances
While not legally required, 95% of Vietnamese employers provide meal allowances (typically 730,000-1,000,000 VND monthly) and transportation support.
These allowances are tax-free up to certain limits, making them cost-effective for both you and your employees.
Payroll timing tip
Process 13th month bonuses in December to spread the cash flow impact. Most companies pay this with the December salary rather than waiting until January.
Compliance requirements in Vietnam
Vietnam tax authorities audit 15% of employers annually. Here's what they check.
Monthly filing requirements
Vietnam requires monthly tax and social insurance filings by the 20th of the following month. Miss this deadline and penalties start immediately at ₫200,000 per day.
Personal Income Tax (PIT) returns must be filed through the eTax portal by the 20th. You'll submit Form 05/KK-TNCN showing employee withholdings, taxable income, and deductions for the previous month.
Social insurance contributions follow the same 20th deadline using Form D02-TS through the VSS online portal. This covers social insurance, health insurance, and unemployment insurance for all employees.
Critical monthly deadline
All tax and social insurance filings due by the 20th of each month. Late filing penalties start at ₫200,000 per day plus 0.05% daily interest on unpaid amounts.
Value Added Tax (VAT) filings are also due monthly by the 20th if your annual revenue exceeds ₫2 billion. Use Form 01/GTGT through the eTax system.
Late filing penalties compound quickly. After 90 days overdue, authorities can freeze your bank accounts and impose additional fines up to ₫75 million.
Annual reporting
Year-end PIT reconciliation is due by March 31st, 2027 for the 2026 tax year. You'll file Form 03/KK-TNCN for each employee earning over ₫11 million monthly or those with multiple income sources.
Employees must receive their annual tax statements (Form 11A-BK-TNCN) by January 31st, 2027. These statements detail total earnings, withholdings, and any additional tax owed or refundable.
Annual social insurance reconciliation requires Form D04-TS by March 31st. This reconciles total contributions paid against actual wages and identifies any adjustments needed.
Annual compliance checklist
- Issue employee tax statements by January 31st
Form 11A-BK-TNCN required
- File year-end PIT reconciliation by March 31st
Form 03/KK-TNCN for eligible employees
- Submit annual social insurance reconciliation
Form D04-TS due March 31st
- Prepare audit documentation
Keep 10 years of payroll records
Audit preparation is essential since Vietnam conducts regular compliance reviews. Tax authorities typically examine payroll records, employment contracts, and benefit calculations going back three years.
Employee documentation
Employment contracts must be in Vietnamese and include specific mandatory elements. Contracts lacking required provisions face penalties up to ₫50 million per violation.
Every contract must specify: exact job title and duties, workplace location, working hours, salary breakdown including allowances, probation period (maximum 60 days for skilled positions), and termination procedures.
Payslip requirements are strictly enforced. Each payslip must show gross salary, itemized deductions, net pay, employer contributions, and be issued in Vietnamese. Missing elements trigger ₫5 million fines per occurrence.
Payslip must include
Gross salary breakdown, all deductions itemized, employer social insurance contributions, overtime calculations, and net pay in Vietnamese language. Missing elements = ₫5 million penalty per payslip.
Record retention requires keeping all payroll documentation for 10 years. This includes contracts, payslips, time records, tax filings, and social insurance submissions. Lost records during audits result in estimated tax assessments with 20% penalties.
Language requirements mandate all official employment documents in Vietnamese. Dual-language versions are acceptable, but Vietnamese takes legal precedence.
Penalties and enforcement
| Violation | Penalty |
|---|---|
| Late monthly tax filing | ₫200,000 per day + 0.05% daily interest |
| Missing payslip elements | ₫5 million per occurrence |
| Incorrect tax withholding | 20% of underpayment + interest |
| Invalid employment contract | ₫50 million per violation |
| Late social insurance payment | 0.05% per day of outstanding amount |
| Missing employee tax statements | ₫20 million + ₫2 million per missing statement |
Escalation procedures move quickly. After 30 days of non-compliance, authorities issue formal notices. At 90 days, they can freeze accounts, seize assets, or suspend business licenses.
Criminal penalties apply for serious violations. Tax evasion exceeding ₫500 million can result in imprisonment up to 7 years for responsible managers.
Serious violation threshold
Tax evasion over ₫500 million triggers criminal investigation. Responsible managers face up to 7 years imprisonment plus company fines up to ₫2 billion.
Regulatory oversight
General Department of Taxation oversees all payroll tax compliance. Their eTax portal (etax.gdt.gov.vn) handles monthly and annual filings. Contact: (+84) 24 3944 3368.
Vietnam Social Security manages social insurance, health insurance, and unemployment insurance. Use their VSS portal (baohiemxahoi.gov.vn) for contributions and reporting. Hotline: 1900 6050.
Department of Labour, Invalids and Social Affairs enforces employment law compliance including contracts and working conditions. Each province has local offices handling inspections and violations.
Ministry of Health oversees occupational health requirements and workplace safety standards that affect payroll calculations for hazard pay and insurance premiums.
Managing Vietnam payroll compliance in-house? See how we simplify it
Recent changes in Vietnam
Minimum wage in Vietnam increased 6% in 2026, from ₫4,680,000 to ₫4,960,800 monthly for Region I (Ho Chi Minh City and Hanoi).
The adjustment affects all four regional wage zones, with the largest impact on urban employers. If you're still using 2025 rates, you're underpaying employees and risk labor inspection penalties.
2026 Regional Minimum Wages
Region I: ₫4,960,800 (+6%) | Region II: ₫4,411,400 (+6%) | Region III: ₫3,862,000 (+6%) | Region IV: ₫3,450,000 (+6%)
Social Insurance Contribution Adjustments - Effective January 1, 2026
Maximum monthly salary base for social insurance calculations increased to ₫46,800,000, up from ₫44,100,000 in 2025. This 6.1% increase directly impacts high earners' contribution calculations.
Employers now contribute social insurance on higher salary portions for senior staff. The change affects approximately 15% of white-collar employees in major cities.
Personal Income Tax Bracket Updates - Effective January 1, 2026
Tax-free threshold remains at ₫11,000,000 monthly, but deduction amounts for dependents increased to ₫4,800,000 per person annually (up from ₫4,400,000).
The change reduces tax liability for employees supporting family members. Update your payroll calculations to reflect the higher dependent deductions when processing monthly withholding.
Digital Salary Payment Mandate - Effective July 1, 2026
All companies with 50+ employees must pay salaries through bank transfers or digital payment systems. Cash payments will only be permitted for companies with fewer than 50 employees in rural areas.
Employers have until June 30, 2026, to establish banking relationships and update payment processes. Non-compliance results in fines up to ₫75,000,000.
Upcoming: Overtime Regulation Changes
New overtime calculation rules take effect January 1, 2027. Maximum monthly overtime reduced from 40 to 30 hours, with enhanced penalty rates for violations.
Frequently asked questions about payroll in Vietnam
Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Regulations change frequently, so always consult with local experts and official government sources for your specific situation.