Vietnamese employees are in high demand in various industries, especially in tech, finance, sales, business management, and customer service. International employers are able to hire these skilled professionals at a low cost. For this reason, more and more companies are looking to add Vietnamese employees to their teams.

Whenever a company hires employees outside of their country, they have to follow (1) domestic labor laws and (2) the labor laws and regulations of that employee’s home country. So, prior to starting the recruitment process and targeting Vietnamese workers to fill employment gaps, it’s wise to learn about employee benefits in Vietnam.

If you’re unclear on the Vietnam labor law and what it means for your company, this is the guide for you. In it, we’ll give you an overview of Vietnamese labor laws, mandatory and supplemental benefits, and more so you can create a benefits package that satisfies these laws and entices Vietnamese professionals to work for you.

An Overview of Labor Laws in Vietnam

In Vietnam, the employer-employee relationship is governed by the Ministry of Labor, War, Invalids, and Social Affairs (MOLISA). The entity’s latest labor law, Labour Code 2019, was published to ensure that Vietnamese employees and employers operate in a harmonious and fair manner. The law went into effect on January 1, 2021. This is the law you’ll reference when determining how to structure your benefits package for employees.

Mandatory Employee Benefits in Vietnam

You can find information about important mandatory employee benefits surrounding social, health, and unemployment insurance in Labor Code Chapter XII. We’ll cover them below.

Social, Health, and Unemployment Insurance

Every employer who hires Vietnamese employees must provide social, health, and unemployment insurance through the Vietnamese government’s compulsory schemes (systems). The employer will pay regular contributions over time to fund each of these accounts. And so will the employee. 

The amount that the employer will pay depends heavily on the worker’s location, how much the worker is being paid, and government-set limits.

Social Insurance

Employer-provided social insurance funds cover the following benefits for employees:

  • Pension allowance
  • Maternity leave
  • Sick leave
  • Mortality allowance
  • Workplace accident and disease allowances

Employer contribution amount: 17.5% of the employee’s salary

Health Insurance

Health insurance funds for Vietnamese workers cover medical treatments and examinations as well as some preventive care. The funds in this account may only be used to cover services and treatments from a state-approved facility.

Employer contribution amount: 3% of the employee’s salary

Unemployment Insurance

Unemployment insurance in Vietnam is meant to replace severance pay. It’s paid to employees who have lost their jobs and don’t have an active income.

Employer contribution amount: 1% of the employee’s salary

These contributions should be made at the same time the employee’s wages are paid.

Trade Union Fee

In addition to the above insurance benefits, employees and employers are required to pay a trade union fee that goes towards supporting the Vietnamese trade union, worker welfare initiatives and programs, and more.

Employer contribution amount: 2% of the employee’s salary

Employee Benefit Employer Contribution Percentage (as a percentage of employee salary)
Social Insurance 17.5%
Health Insurance 3%
Unemployment Insurance 1%
Trade Union Fee 2%
Total Contribution 23.5%

Monthly Minimum Wage

Per Vietnam Briefing, there’s no single minimum wage in Vietnam – there are two.

  • Common monthly minimum wage – This type of wage is typical of workers in businesses and enterprises that are state-owned. As of the time of this writing, it sits at VND 2,340,000 per month (same as $93 per month).
  • Regional monthly minimum wage – This wage type is for those who work in non-state businesses. There are four regions:
    • Region 1 – $4,960,000 ($196 USD)
    • Region 2 – $4,410,000 ($175 USD)
    • Region 3 – $3,860,000 ($153 USD)
    • Region 4 – $3,450,000 ($137 USD)

To see hourly minimum wage rates, see this Vietnam Briefing resource.

Working Hours

Vietnamese workers should not be allowed, or required, to work for longer than 8 hours in one day. Work hours also shouldn’t exceed 48 hours per week – 40 hours/week is the sweet spot according to the State. It’s fine for employers to divvy up the work hours as they see fit so long as the employee is informed.

Overtime is allowed and must be paid at 1.5 times the base salary on weekdays and double the base salary on weekends.

There are specific guidelines to meet with regard to overtime. They are outlined in Chapter VII of Labour Code 2019.

Leave Allowances

Employers should be prepared to offer the following leave allowances:

Vacation Leave

Employees should receive 12 days of paid vacation per year minimum (plus one extra day for every 5 years they’ve worked for you). Employees who work in positions with high safety risk will usually receive a few more paid vacation days.

Paternity Leave

Starting within 30 days of the baby’s date of birth, male employees are eligible to take paid leave for the below durations:

Birth OutcomeLength of Leave
Normal delivery5 days
Delivery via surgery7 days
Twin birth10–14 days

Employers must also pay a $128 lump sum per child.

Maternity Leave

The employer should allow six months of paid maternity leave for live births. The employee will receive their full salary for the duration of the leave. In certain circumstances (miscarriage, stillbirth, or abortion), the leave duration will be shorter:

Pregnancy ProgressionLength of Leave
1 to 3 months20 working days
3 to 6 months40 working days
6+ months50 working days

In addition to the paid leave, the employer should also pay a lump sum of 2 months of the common minimum salary per child.

How to Make Contributions to Your Employee’s Benefit Accounts

According to Article 12 of the Vietnam Labour Code, you have 30 days to report your new hire’s employment to the State agency specialized in labour under the provincial People’s Committee. You’ll also need to send notification to the social insurance agency.

Optional Employee Benefits in Vietnam

The above benefits are standard for employers that hire Vietnamese talent. But you can make your employee benefits package more attractive by offering some of the non-mandatory extras below:

  • Health and wellness benefits (gym memberships, private health insurance, mental health support, etc.)
  • Bonuses based on performance
  • Travel allowances for jobs that require substantial travel
  • Extra paid leave for certain situations outside of the governmental requirements
  • Childcare provided on-site
  • Tuition reimbursement
  • Employee of the month perks
  • Expanded life or retirement insurance
  • Housing allowances
  • Professional development and promotion opportunities.

Be sure to explore the Vietnam labor law so that your business can maintain legal compliance. It also helps to consider your budget, your employees’ preferences, and your competitors’ benefit packages.

Building a Benefits Package for Employees in Vietnam

What many employers know all too well is that constructing a benefits package for employees in Vietnam isn’t easy. And it’s even more difficult if you don’t have much experience in this area of HR or sifting through international regulations.

But with the right information and guidance, you can build a compliant, well-constructed benefit package for employees in Vietnam. Here are some tips to help you along the way:

  • Get knowledgeable on employee benefits in Vietnam. The mandatory benefit information we’ve shared in this article is only the tip of the iceberg. Vietnam’s labor legislation is extensive, containing highly detailed requirements in numerous scenarios. Before drafting and setting anything up, be sure to comb through the Labour Code of 2019. If you’re not well-versed in legal jargon, link up with a lawyer who knows their way around international law. They will be able to answer your questions.
  • Include all the mandatory Vietnam employee benefits in your company’s benefit plan. Refer back to the information you gleaned in step 1. Be careful to offer all of the benefits required by Vietnam’s government.
  • Add non-mandatory benefits to sweeten the benefit plan. Choose relevant supplementary benefits that connect with candidates. The benefit package could be the one thing that makes a preferred candidate choose your company over another. Refer to the list under the previous heading for ideas.
  • Ensure compliance from end to end. As you build your benefit package, double and triple-check whether it’s in line with Vietnamese government regulations. It’d be frustrating to get close to the finish line and have to go back to the drawing board to tweak one or more benefit elements.
  • Reach out for help as needed. Throughout the benefit package creation process, you may find yourself stuck. Depending on the issue you come across, the following professionals and organizations could come in handy:

So, there you have it – everything you need to know upfront about employee benefits in Vietnam and how to build a good benefit plan for Vietnamese employees. We trust that the information we’ve shared will be helpful to you in your efforts to expand your workforce to the Land of the Blue Dragon.