While onboarding an individual from Vietnam, the employer must know about the labor laws, deductions, benefits, and allowances. This section provides all the information to help employers.
Employee Contract
Public and Provincial Holidays
Leave Information
Basic
Employee Contracts in Vietnam must be written in purely Vietnamese or dual language (Vietnamese and preferably English). The contract must contain all the employer’s details along with terms and conditions, benefits, leaves, and allowances.
Probation Period
The probation periods specified in Article 25 of the Labor Code 2019 in Vietnam are as follows: not exceeding 180 days for managerial positions, not exceeding 60 days for positions requiring a college level or above, and not exceeding 30 days for positions requiring an intermediate level, with a special provision that allows a 6-month probation period exclusively for managerial positions.
13th Month Pay
A 13th-month pay is not mandatory in Vietnam. But it is customary to pay a TET bonus or Lunar Year bonus given before the New year holiday.
Employee Benefits
Employers in Vietnam may provide the following benefits to their employees:
- Retirement benefit.
- Health Insurance.
- Maternity benefits.
The payroll cycle in Vietnam is generally Monthly.
The minimum wage varies per region. It ranges from 3,250,000 VND to 4,680,000 VND per month.
Overtime pay in Vietnam is determined by a 150% rate on normal weekdays, 200% on weekends, 300% on public holidays, and an additional 30% during night-time on weekdays.
Employer Payroll Cost:
| Category |
Contribution |
| Social Insurance |
17.5% |
| Health Insurance* |
3% |
| Unemployment Insurance |
1% |
| Trade Union |
2% |
Employee Payroll Cost:
| Category |
Contributions |
| Social Insurance |
8% |
| Health Insurance |
1.5% |
| Unemployment Insurance |
1% |
Employee Income Tax
| Annual Taxable Income (in million VND) |
Tax Rate (%) |
| From 0 to 60 |
5 |
| From 60 to 120 |
10 |
| From 120 to 216 |
15 |
| From 216 to 384 |
20 |
| From 384 to 624 |
25 |
| From 624 to 960 |
30 |
| More than 960 |
35 |
VAT
The standard VAT in Vietnam is 10%.
The termination process would include a reasonable notice period to be given by either of the terminating party. Some instances, such as enterprise operation cessation, do not need a filing. Below are some other requirements base on the reason for dismissal:Termination on the last day of employment due to the expiry of the labor contract requires no notice, while lawful unilateral termination by the employee necessitates a 30-day notice for definite contracts or a 45-day notice for indefinite contracts.
Vietnamese employees that are under their probationary period are to observe a notice period of up to 30 days when terminating their contract. For employees after their probationary period, the notice period will be up to 45 days.
Severance pay
Severance pay in Vietnam stipulates that employees who have worked for the company for 12 months can receive severance pay when they are dismissed, and the standard is half a month's salary for each year of service
There are two types of Vietnam work visas that foreign employees must comply with in order to work in the country: LD1 and LD2 visas. For the LD2 visa, the employer must also apply for a work permit. LD1 visa is an exemption for foreign workers in Vietnam from securing a work permit.