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How to hire and pay employees in Vietnam
Slasify
Jun 21, 2025
| Key Takeaways |
|---|
| 1. Regional minimum wages vary significantly from VND 4,960,000 (Region I) to VND 3,450,000 (Region IV), requiring location-specific compliance. |
| 2. Progressive income tax ranges from 5% to 35% for residents, while non-residents pay a flat 20% rate on employment income. |
| 3. Employer social contributions total 21.5% plus 2% trade union fee, covering social insurance (17.5%), health insurance (3%), and unemployment insurance (1%). |
| 4. Strict notice periods apply for termination ranging from 3–45 working days depending on contract type, with limited exceptions for immediate dismissal. |
| 5. Generous parental leave policies include 6 months maternity leave, 5–14 days paternity leave, and additional paid leave for child sickness. |
Non-residents are taxed at a flat rate of 20% on their gross employment income, whereas tax residents are subject to the following progressive tax rates:
| Taxable Income (VND) | Progressive Tax Rate (%) |
|---|---|
| Up to 5,000,000 | 5 |
| 5,000,001–10,000,000 | 10 |
| 10,000,001–18,000,000 | 15 |
| 18,000,001–32,000,000 | 20 |
| 32,000,001–52,000,000 | 25 |
| 52,000,001–80,000,000 | 30 |
| Over 80,000,000 | 35 |
Local Taxes
There are no local taxes on employment income in Vietnam.
Statutory Contributions
In determining the contributions that both employers and employees have to pay in Vietnam, it is important to know that the salaries and other fixed payments used to as the calculation base are subject to certain maximum.
| Contribution base | |
|---|---|
| Social Insurance, Health Insurance and Trade Union Fee | Up to 20 * Common Minimum Wage |
| Unemployment Insurance | Up to 20 * Regional Minimum Wage |
Effective July 1, 2024, the Common Minimum Wage is set at VND 2,340,000 per month, while Regional Minimum Wage varies according to each respective region.
Employer Contributions
| Contribution Rates for Locals | Contribution Rates for Expatriates | |
|---|---|---|
| Social Insurance | 17.5% | 17.5% |
| Health Insurance | 3% | 3% |
| Unemployment Insurance | 1% | - |
In addition to the above contributions, employers are obligated to pay a trade union fee equivalent to 2% of the employee's wage.
Employee Contributions
| Contribution Rates for Locals | Contribution Rates for Expatriates | |
|---|---|---|
| Social Insurance | 8% | 8% |
| Health Insurance | 1.5% | 1.5% |
| Unemployment Insurance | 1% | - |
If there is an established trade union in the workplace, employees are obligated to pay a trade union fee equivalent to 1% of their wage.
Payment of Wages
Employees who receive hourly, daily or weekly wages shall be paid upon the completion of the hour, day or week of work, or in a lump sum, provided that the payment is made within a period of 15 days. Otherwise, employees shall be paid at least once a month.
Minimum Wage
Minimum wage in Vietnam varies by region, as follows:
| Region | Monthly Minimum Wage (VND) |
|---|---|
| Region I | 4,960,000 |
| Region II | 4,410,000 |
| Region III | 3,860,000 |
| Region IV | 3,450,000 |
A listing of the various localities under each region can be found in the appendix to Decree No. 74/2024/ND-CP.
Statutory Bonus
There is no statutory bonus in Vietnam, though it is a common practice for employers to provide a 13th month salary.
Termination
Employers are obligated to notify their employees in writing of their termination, and they can unilaterally dismiss an employee only when they have a justified reason to do so.
| Justified reasons for unilateral dismissal |
|---|
| Repeated failure to fulfill work under the employment contract as determined by their poor performance |
| Inability to work due to prolonged sickness or accident, the threshold of which varies according to the employee's contract term |
| Redundancy, provided that the employer has exhausted all possibilities and is forced to downsize the workforce |
| Abandonment of duty after suspension |
| Reaching retirement age |
| Unjustified absence of more than 5 consecutive days |
| Provision of inaccurate information about an employee's profile, level of education, skills and qualifications, health conditions and other issues related to the contract |
On the other hand, employees can generally resign for any reason without penalty, provided that the proper notice period is observed.
Notice Period
Those who unilaterally terminate their employment contracts are subject to the following notice periods:
| Notice Period | |
|---|---|
| Indefinite-term employment | 45 working days |
| Fixed-term employment with a duration of 12 to 36 months | 30 working days |
| Fixed-term employment with a duration of less than 12 months | 3 working days |
However, no notice period is required if the termination is due to the following reasons:
| Resignation Without Notice | Dismissal Without Notice |
|---|---|
| Not being assigned work or a workplace or not being provided with the agreed working conditions | Abandonment of duty after suspension |
| Not being paid in full or on time | |
| Being maltreated, physically assaulted, or verbally or non-verbally insulted by the employer | |
| Being subjected to any actions by the employer that affect the health, dignity or honor of the worker, or being subjected to forced labor | |
| Being sexually harassed at the workplace | Unjustified absence of more than 5 consecutive days |
| Pregnant employees whose work is determined to be adversely affecting their health | |
| Reaching retirement age | |
| The employer provides inaccurate information with regards to the job, working conditions, and entitlements |
Severance Pay
Employees who have worked for at least a full year are entitled to severance equivalent to half of their monthly wage for each year of work upon termination. The reference wage for calculating severance is the average wage as stipulated on the contract over the preceding 6 months.
However, no severance shall be paid if the reason behind the termination is one of the following:
| Reasons for the non-entitlement to severance pay |
|---|
| Foreign employee being expelled by an effective verdict |
| Employee dismissed due to unexplained absences for at least 5 consecutive days |
| Employee dismissed for disciplinary reasons |
| Employee resigned due to operational changes or economic reasons, where they will receive redundancy allowance instead |
| Employee's retirement and them being entitled to receive pension |
| Expiry of work permit for foreign employees |
| Unsatisfactory probation |
Note: Employees who participate in the unemployment insurance are also generally not entitled to receive this severance payment.
Probationary Period
Unless it is for employees working less than a month, probation can be negotiated as a part of the employment contract or under a separate probation contract, and they shall be applied only once for each job.
The maximum duration of a probationary period varies according to the employee's job category, as follows:
| Job Category | Maximum duration of probation |
|---|---|
| Managerial positions of enterprises | 180 days |
| For jobs requiring college-level or higher professional or technical qualifications | 60 days |
| For jobs requiring intermediate-level professional or technical qualifications, technical workers or specialized workers | 30 days |
| Others | 6 days |
The wages paid to the employee during probation must be at least 85% of the wage for that job, and employees may be dismissed without any notice or severance if their performance during their probation are unsatisfactory.
Work Time Rules
Standard Working Hours
Normal working hours must not exceed 8 hours a day or 48 hours per week. However, if the working hours are determined on a weekly basis, the normal working hours shall not exceed 10 hours a day or 48 hours per week.
Female employees who are pregnant or are caring for a child less than 12 months old and usually perform work that could adversely affect their reproductive and child-rearing functions shall have an hour reduced from their daily working hours without reduction in wages.
Break Period
Employees working 6 hours or more per day are entitled to a break time of at least 30 consecutive minutes during the work period.
Moreover, female employees may also be entitled to the following break periods each day without any reduction in their wages:
| Duration of break | |
|---|---|
| Granted during the employee's menstruation period | 30 minutes |
| Granted for those caring for a child under 12 months old | 60 minutes |
Overtime
Overtime work is allowed as long as the employee consented to the additional hours and the overtime does not exceed 50% of their normal working hours in a day. Employees working overtime shall be paid as follows:
| Overtime pay | |
|---|---|
| On weekdays | 150% of the employee's regular wage |
| On weekends | 200% of the employee's regular wage |
| On public holidays or paid leave days | 300% of the employee's regular wage |
If the working hours are determined on a weekly basis, total working hours shall not exceed 12 hours per day and 40 hours per month. Moreover, unless otherwise exempted, total overtime hours shall not exceed 200 hours per year.
Weekly Rest Days
Employees are entitled to at least 24 consecutive hours of rest per week. However, if this is not possible, the employer has the obligation to ensure that the employee receives at least an average of four days off per month.
Holiday and Leave Entitlements
Public Holidays
Employees in Vietnam are generally entitled to be paid their regular wage during public holidays. There are 11 days of public holidays in Vietnam for 2025.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Lunar New Year | January 28–31, February 3 |
| Hung Kings Commemoration Day | April 7 |
| Victory Day | April 30 |
| Labor Day | May 1 |
| National Day | September 1–2 |
In addition to the above, foreign employees are entitled to have one traditional New Year's Day and one National Day of their country as a holiday.
Note: Public holidays that fall on the weekends are not paid as public holidays and shall instead entitle the employee to a paid day off in the next available working day.
Annual Leave
Employees who have completed a full year of service shall be entitled to 12 days of fully paid annual leave, and this leave entitlement shall increase by a day for every 5 years of service. Those who have not completed a full of service shall have their annual leave entitlements prorated according to the number of months worked.
Certain categories of employees may be entitled to different annual leave period, as follows:
| Category of employee | Leave entitlements |
|---|---|
| Minors, employees with disabilities or employees who perform heavy, harmful or hazardous work | 14 working days |
| Employees who perform extremely heavy, harmful or hazardous work | 16 working days |
Moreover, if the employee is to take their leave and travel by road, rail or water, any time in excess of 2 days in transit shall be added to their leave entitlement.
The employee and employer may agree to have any annual leave days not taken be accumulated for a maximum of 3 years before they expire.
Sick Leave
An employee's entitlement to sick leave shall be covered by the relevant social insurance scheme, and have the duration of their leave determined by their length of contribution for social insurance.
| Length of contribution | Duration of sick leave |
|---|---|
| Up to 15 years | 30 working days per year |
| 15–30 years | 40 working days per year |
| Over 30 years | 60 working days per year |
Employees doing heavy, hazardous or dangerous occupations are entitled to have an additional 10 days of sick leave per year.
If the leave is caused by a disease requiring long term treatment, the period of paid sick leave shall be 180 days, including public holidays and weekends. Any further extension must not exceed the period of social insurance premium payment.
Maternity Leave
Female employees are entitled to 6 months of maternity leave, with the leave taken before childbirth not exceeding 2 months. Furthermore, in the event of multiple births, the leave shall be extended by a month for each additional child.
Since maternity leave pay is covered by the relevant social insurance scheme, the employee is required to have made contributions for at least 6 months within a year before the date of delivery to receive the maternity pay.
This leave shall apply mutatis mutandis to mothers adopting children under 6 months old.
Paternity Leave
Male employees whose partners have given birth, or who have adopted a child less than 6 months old, are entitled to 5 days of paternity leave, and just like for maternity pay, the paternity pay shall be covered by the relevant social insurance scheme.
In certain cases, the employee may be entitled to enjoy an extended leave, as follows:
| Duration of leave | |
|---|---|
| When their partner undergoes surgical birth or has given birth to a child before 32 weeks of pregnancy | 7 working days |
| When their partner has given birth to multiple children | 7 working days + 3 days for each additional child |
| When their partner has given birth to twins and undergone surgical birth | 14 working days |
Paternity leave shall be taken within 30 days after childbirth. In the case of adoption, adopting fathers are only entitled to paternity leave until the child turns 6 months old if their partner does not take maternity leave.
Parental Leave
Employees with sick children are entitled to the following paid sick leave, the payment of which is covered by the relevant social insurance scheme:
| Child's age | Leave duration |
|---|---|
| Under 3 years old | 20 working days per year |
| 3–7 years old | 15 working days per year |
Other Leave
Employees are entitled to the following leaves, provided that they notify their employer of their intended absence from work:
| Leave | Paid/Unpaid | Duration |
|---|---|---|
| Marriage Leave | Paid | 3 days |
| Leave for the marriage of the employee's child | Paid | 1 day |
| Leave for the marriage of the employee's parent or sibling | Unpaid | 1 day |
| Leave for pre-natal check up** | Unpaid | 1 day * 5 |
| Leave to grieve the death of the employee's (or their spouse's) parents, spouse or child | Paid | 3 days |
| Leave to grieve the death of the employee's grandparent or sibling | Unpaid | 1 day |
| Leave to take contraceptive measures^ | Unpaid | 7–15 days |
**This leave is conditional on the employee meeting the qualifying conditions set by the relevant social insurance agency. Employees who meet the eligibility requirements can take a day off for each check up, and this can be taken up to 5 times.
^Employees with IUDs are entitled to 7 days of leave, while those taking sterilization measures are entitled to 15 days of leave.
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