Payroll in Vietnam

Vietnam does not set one national payday. The Labour Code lets monthly-paid employees be paid once a month or once every half-month, on a recurring date that both sides agree. Monthly is the usual cycle. There is no universal fifth-of-the-month payday, so write the date into the contract.

Payday and payslips

Wages are stated and paid in Vietnamese dong (VND). The exception is foreign employees working in Vietnam, who may be paid in foreign currency. You can pay in cash or through the employee's bank account. Where you pay by bank transfer, the employer bears the account-opening and transfer fees.

Each payment must come with a statement showing pay, overtime, night-work pay and any deductions. Hourly, daily and weekly wages follow their own payment rule, and agreed combined payments must be no more than 15 days apart. Disciplinary fines and wage deductions as punishment are prohibited, so the only deductions on a payslip should be lawful ones such as employee insurance and income tax.

Extra and 13th-month payments

Vietnam has no compulsory 13th-month salary and no fixed Tet bonus. The Labour Code allows bonuses based on business results and employee performance under the employer's announced rules. If you promise a bonus, state the eligibility and the calculation in the offer and in policy. A promised 13th salary is a contractual commitment, not a legal default, and payroll should treat it that way.

Contributions and tax

Payroll generally deducts 8% retirement and survivor insurance, 1.5% health insurance and 1% unemployment insurance from the employee: 10.5% before income tax. Standard employer contributions total 21.5% of the relevant bases: 14% retirement and survivor, 3% sickness and maternity, 0.5% occupational accident and disease, 3% health and 1% unemployment. The separate employer union contribution is generally 2% of the salary fund used for compulsory social insurance, and it is additional to the 21.5%.

The contribution base is not automatically the employee's whole take-home pay. It includes pay for the job or title, salary allowances and other supplements agreed to be paid regularly each pay period. The reference amount is VND 2,530,000 a month from 1 July 2026, which sets the social-insurance ceiling at VND 50,600,000 a month. Unemployment insurance has a different ceiling: 20 times the applicable regional monthly minimum.

For tax, resident employment income is taxed progressively on the slice in each band, after the personal deduction of VND 15.5 million a month and VND 6.2 million for each qualifying dependant. Withholding rules differ by contract length. Decree 253/2026 guidance uses progressive withholding for residents with contracts of at least three months. For residents without a contract or with a shorter one, qualifying payments of at least VND 5 million per payment generally attract 10% withholding. Withholding does not replace the employee's final annual tax calculation. The dossier does not give remittance deadlines or filing forms, so confirm the current calendar and procedure with the tax authority and the social-insurance agency before your first pay run.

Working-time rules that affect pay

Normal working time is capped at eight hours a day and 48 hours a week. Under a weekly schedule, normal hours may reach ten a day within the 48-hour week. Overtime needs the employee's consent. It is limited to 40 hours a month and 200 a year, with up to 300 a year only in specified cases and with the required notification.

Night overtime stacks. It needs the overtime pay, the night-work addition and a further 20% of the applicable daytime wage for that type of day. A flat overtime percentage alone can underpay someone working late for an overseas team. Employees working at least six hours get a break of at least 30 consecutive minutes, or 45 minutes for night work.

Vietnam taxes employment income through progressive personal income tax, which the employer withholds each pay period. Compulsory insurance contributions are separate, and part of them comes out of the employee's gross pay before tax is calculated.

Income tax bands for residents

For resident employment income in tax year 2026, the monthly taxable-income bands are below. Each rate applies only to the slice of income inside that band, so the top rate does not apply to the whole salary.

Some reference tables show a different band structure. Confirm with your payroll provider that the bands in use match the 2026 national guidance above.

Allowances and deductions

Taxable income is calculated after deductions. The personal deduction is VND 15.5 million a month, and each qualifying dependant adds VND 6.2 million a month. A dependant can be claimed only once, by one taxpayer. Eligible compulsory insurance contributions and other permitted deductions also reduce taxable income. Confirm eligibility and keep the supporting documents. Do not estimate net pay from a single flat tax rate.

How withholding works

Under current guidance (Decree 253/2026), residents on employment contracts of at least three months have tax withheld on a progressive basis. For residents with no contract, or a contract shorter than three months, qualifying payments of at least VND 5 million per payment generally attract 10% withholding, subject to the permitted declaration and other conditions. Withholding is not the final answer. The employee still has an annual tax calculation.

Residence matters. The test includes 183 days of presence in a calendar year or in a consecutive 12-month period from first arrival, plus a separate regular-residence test. Residents are generally taxed on worldwide income. Non-resident employment income for work done in Vietnam is generally taxed at 20%, wherever it is paid. Check each person's full circumstances and any tax treaty before setting payroll treatment.

Employee insurance deductions

A covered employee on an ordinary contract has 10.5% deducted before income tax: 8% retirement and survivor insurance, 1.5% health insurance and 1% unemployment insurance. The base is pay for the job or title plus allowances and supplements paid regularly each pay period. It is not automatically the minimum wage or the full take-home pay, so have payroll list the included components.

Caps apply. The reference amount is VND 2,530,000 a month from 1 July 2026. The social-insurance ceiling is 20 times that amount, VND 50,600,000 a month, and health contributions use the same base. Unemployment insurance has a different ceiling: 20 times the applicable regional monthly minimum. Do not use the old VND 46,800,000 ceiling after June 2026.

Unemployment insurance covers Vietnamese workers. For a foreign employee on standard social and health insurance, the usual shares are 9.5% employee and 20.5% employer on covered bases.

The employer's 21.5% is 14% retirement and survivor, 3% sickness and maternity, 0.5% occupational accident and disease, 3% health and 1% unemployment. Caps, coverage and approved reduced rates can change the actual amount. The employee deduction comes out of gross pay and should not be added again to employer cost.

Business taxes are a separate matter

The corporate tax rate is 20% and VAT is 10%. Neither is taken from an employee's salary. The employer union contribution is also separate from employee deductions.

For an ordinary covered Vietnamese employee, standard employer insurance contributions total 21.5% of the relevant contribution bases. A separate 2% employer union contribution comes on top. Caps, coverage and approved reduced rates can change the actual amount, so 21.5% is not a universal percentage of every employee's full salary.

Employer and employee rates

The employee's 10.5% is deducted from their pay before income tax. Do not add it again to the employer's cost. The 2% union contribution is generally based on the salary fund used for compulsory social insurance. Keep it separate from the 21.5% total and from employee union membership fees. Exemption, reduction or temporary suspension depends on legal conditions, so do not assume a provider can opt out.

The 0.5% occupational accident rate is the ordinary rate. A 0.3% rate is available only to enterprises that meet the specified conditions and approval process. It is not automatic for office-based hires, so check the actual rate your provider applies.

Foreign employees

Foreign employees on qualifying fixed-term contracts of at least 12 months are covered by compulsory social insurance and the corresponding health-insurance category. Exclusions include qualifying intra-company transfers, retirement age at contract signing and applicable treaties. Unemployment insurance covers Vietnamese workers only. For a covered foreign employee, the usual shares are 20.5% employer and 9.5% employee on covered bases, before the separate union contribution.

Contribution base and ceilings

For employer-set wages, the social insurance base includes pay for the job or title, salary allowances and other supplements agreed to be paid regularly each pay period. It is not automatically the lowest regional wage or the employee's whole take-home pay. Have payroll identify the included components before applying rates and caps.

• The reference amount is VND 2,530,000 a month from 1 July 2026.
• The social insurance ceiling is 20 times that amount: VND 50,600,000 a month.
• Health insurance for covered employees uses the same social insurance base.
• Unemployment insurance has a different ceiling: 20 times the applicable regional monthly minimum wage.

What is not included

The contribution rates do not cover bonuses, overtime, equipment, additional benefits or exit costs. Vietnam has no general compulsory 13th-month salary. Private medical cover, allowances and extra leave are not universally mandatory unless a binding term or applicable rule requires them. State any promised benefit in the offer.

Worked cost example

Take a covered employee earning VND 30,000,000 a month. Assume the full amount is the base for each contribution, the standard 0.5% accident rate applies and no relief is available.

The subtotal is before EOR fees, additional benefits, equipment, overtime, bonuses and exit costs. The employee's VND 3,150,000 insurance deduction comes out of gross pay and is not an extra employer cost. Income tax is calculated separately.

Annual leave

After 12 months with an employer, an employee doing ordinary work is entitled to 12 paid working days of annual leave. The allowance is 14 days for specified groups, including minors, employees with disabilities and hazardous work, and 16 days for particularly hazardous work. Add one day for each five years with the employer. Employees with shorter service receive proportionate leave.

The employer sets the leave schedule after consulting employees and must notify them in advance. The parties may agree to take leave in parts or combine it over up to three years. Keep a usable leave record rather than assuming unused days disappear at year end. When employment ends, untaken annual leave is paid out, and it belongs in the final pay settlement.

Public holidays and personal leave

The Labour Code provides 11 paid public-holiday days: New Year's Day, five days for Tet, 30 April, 1 May, two days around National Day and Hung Kings Commemoration Day. The paid Vietnam Culture Day on 24 November brings the total to 12 in 2026. Foreign employees also receive one day for their own traditional New Year and one for their country's National Day. Check the annual Tet and National Day arrangements and the substitute-rest rules. Do not announce a four-day paid break for every private employee unless the applicable calendar or employer arrangement supports it.

Personal leave is separate. Employees receive three paid days for their own marriage, one for a child's marriage, and three for the death of a spouse, child or the specified parents and parents-in-law. Record the event and the entitlement instead of using one bereavement allowance for every relative.

Sick leave

Sickness is paid through social insurance, not as full salary from the employer. For eligible insured employees in ordinary working conditions, the annual limits depend on contribution years.

Medical and claim requirements apply. Higher limits apply to specified hazardous work, and continued treatment for listed long-term illnesses can qualify for further benefits at different rates. There is no rule requiring the employer to pay the first 30 days at full salary. Any top-up is an offer commitment.

For a child under seven, eligible insured employees can receive sickness benefit for up to 20 working days a year for each child under three, or 15 for a child aged three to under seven. Where both parents are insured, each has their own entitlement, at the ordinary rate of 75% with medical evidence.

Maternity, paternity and parental leave

Maternity leave is six months, with no more than two months taken before birth. Multiple births add one month for each child from the second child born. From 1 July 2026, a qualifying mother with one living biological child receives seven months for a single birth, subject to insurance eligibility. This follows the number of qualifying children, not the employee's second pregnancy.

Maternity benefit is generally 100% of the average salary used for compulsory social-insurance contributions over the six most recent months before leave. The ordinary condition is at least six months of contributions in the preceding 12, with special rules for prescribed pregnancy rest and infertility treatment. An extra employer top-up is a separate offer commitment.

An insured father normally receives paternity leave as follows:

• Five working days when his wife gives birth.
• Seven days for a surgical birth or birth before 32 weeks.
• Ten days for twins or a qualifying second child.
• 14 days for twins delivered surgically.

Additional days apply to births of three or more children. Leave must begin within 60 days of the birth, and if split, the final period must also begin within that window.

A mother may return early only after at least four months, with prior notice, employer agreement and medical confirmation, and she can keep receiving maternity benefit alongside pay. A mother nursing a child under 12 months has a paid 60-minute daily break.

Compliance risk in Vietnamese payroll sits in a few places: the legal employer model, the written contract, insurance and tax registration, working time records, and the exit process. Start with who actually employs the person, because that decides who owes the other duties.

Confirm the employing entity

Identify which Vietnamese entity employs the person, what authorisation it holds and whether the role can lawfully use that arrangement. Labour dispatch is a regulated activity, with a licence requirement and a dispatch period limit of 12 months. An EOR label does not make every role eligible or allow an indefinite assignment. Also check how the work will really be performed. An agreement can be an employment contract whatever it is called if it involves paid work, wages and management or supervision.

Employment contracts and written terms

Use a written employment contract, subject to the Labour Code's limited exceptions. It should name the legal employer and employee and set out the job and workplace, term, salary and payment arrangements, working time, rest, protective equipment, insurance and training terms. A Vietnamese or bilingual version helps both sides check the terms. Electronic contracts can have the same legal value as paper ones. The electronic-contract rules apply from 1 July 2026, and compliant providers send the contract to the government platform within 24 hours of the final signature. Paper contracts remain possible.

Fixed-term contracts run for no more than 36 months. If work continues after the term ends, the parties generally have 30 days to sign a new contract, otherwise it becomes indefinite. Normally only one further fixed-term contract is allowed. Foreign workers are among the statutory exceptions, so check the person's category first.

Probation is limited to one period for the same job. Pay during probation must be at least 85% of the agreed job salary.

Registration, contributions and payment

The dossier does not set out registration steps or filing deadlines for social insurance or tax, so confirm these with your provider or the local authority before the start date. What it does cover is the contribution split. An ordinary covered employee has 10.5% deducted from pay: 8% retirement and survivor, 1.5% health and 1% unemployment. Standard employer contributions total 21.5% of the relevant bases, and the 2% union contribution is separate. Identify which pay components form the contribution base before applying rates and caps. From 1 July 2026 the social-insurance ceiling is VND 50,600,000 a month.

Wages are stated and paid in Vietnamese dong, with an exception for foreign employees. Each payment needs a statement showing pay, overtime, night-work pay and any deductions. Foreign employees normally need a work permit unless an exemption applies, and the employment contract cannot outlast the permit.

Records

Record the day type, hours and pay basis for overtime, and keep a usable annual leave record. Employers with at least ten employees need written, registered internal labour rules. For personal data, the Personal Data Protection Law took effect on 1 January 2026. Collect applicant data with the required consent and delete unsuccessful applicants' data unless otherwise agreed.

Notice and termination

An employer needs a legal ground and must follow its procedure. Giving notice alone does not create a lawful reason to dismiss. Ordinary notice periods, for both employer and employee, are:

Special occupations have different rules. The parties generally have 14 working days from termination to settle payments, and extensions are capped at 30 days. Do not use the old seven-day deadline. Settlement includes outstanding wages and untaken annual leave. The employer must also complete insurance-record procedures and return retained original documents.