Employer of Record in Vietnam

Working Hours and Overtime

The standard rules for working hours in Vietnam are the following:

• Up to 8 hours a day
• Maximum 48 hours per week
• At least one full rest day per week

It’s quite common for employers to operate on a 40-hour, five-day week basis. However, the legal limit is 48 hours.

Any employee who is working shifts longer than 6 hours must receive a break of at least 30 minutes, which is extended to a 45-minute break for night shifts.

Overtime normally requires the employee’s consent and is limited to the following:

• Maximum 40 hours of overtime a month
• 200 hours per year
• For certain industries, up to 300 hours per year.

Here is an overview of the different rates at which overtime is paid:

Employees cannot be compelled to work overtime beyond 40 hours per month, and written employee consent is required for any overtime arrangement under Article 107. Overtime compensation is calculated on the contractual hourly wage, including fixed allowances but excluding occasional bonuses and benefits in kind. Companies in the 300-hour per-year sectors must notify the Department of Labour, Invalids and Social Affairs within 15 days of organising the additional overtime.

Minimum Wage

Vietnam generally uses four regional minimum wage levels. The applicable rate depends on the work location of the employee.

From 1st Jan 2026, the minimum wages are:

• Region I: VND 5,310,000 per month or VND 25,500 per hour
• Region II: VND 4,730,000 per month or VND 22,700 per hour
• Region III: VND 4,140,000 per month or VND 19,900 per hour
• Region IV: VND 3,700,000 per month or VND 17,800 per hour

Probation Period

Probation periods fully depend on the seniority and qualifications required for the job positions. Here is a general breakdown of the entitlement for each seniority:

• Enterprise managers: Up to 180 days
• Roles requiring a college degree or higher: Up to 60 days
• Technical or vocational roles: Up to 30 days
• Other roles: Up to 6 working days

Overall, employees must receive at least 85% of their agreed salary during their probation period. Employees are only required to undergo one probation period per job position.

Leave Entitlements in Vietnam

Employees in Vietnam are usually entitled to annual leave, sick leave, maternity and paternity leave, and leave to care for a sick child. These are usually paid through the Social Insurance Fund, provided the employee meets all of the requirements.

Annual Leave

Employees receive at least 12 working days of paid annual leave after completing 12 months of service.

This increases to:

• 14 days for employees under 18, employees with disabilities, and those performing heavy or hazardous work
• 16 days for especially heavy or hazardous work

Employees with less than 12 months of service receive leave in proportion to the time worked. They also receive one additional day of annual leave for every five years spent with the same employer.

Unused leave is normally paid out when employment ends.

Sick Leave

Eligible employees receive sick pay through Vietnam’s Social Insurance Fund. The annual entitlement depends on their contribution history and working conditions:

• Less than 15 years of contributions: 30 days
• 15 to 30 years: 40 days
• More than 30 years: 60 days

Employees in heavy or hazardous roles may receive an additional 10 days.

Sick pay is generally equal to 75% of the salary used to calculate social insurance contributions. Employees must provide a valid medical certificate to make a claim.

Maternity Leave

Eligible employees receive six months of maternity leave. Up to two months can be taken before the birth.

For multiple births, the employee receives an additional month for each child from the second child onwards.

The Social Insurance Fund pays the benefit at 100% of the employee’s average contribution salary, subject to the applicable ceiling. Employees are also protected from dismissal because of pregnancy or maternity leave.

Paternity Leave

Eligible fathers receive:

• 5 working days for a standard birth
• 7 working days following a caesarean birth or a birth before 32 weeks
• 10 working days for twins
• Up to 14 working days when twins or more are delivered by caesarean section

The leave must generally be taken within 30 days of the birth and is paid through the Social Insurance Fund.

Other Statutory Leave

Employees in Vietnam may also be entitled to:

• Marriage leave: Three full paid days for their own marriage and one paid day for a child’s marriage
• Bereavement leave: Three paid days following the death of a parent, spouse, or child, and one day for certain other close relatives
• Sick-child leave: Up to 20 days per year for a child under three, or 15 days for a child aged three to under seven
• Unpaid personal leave: This is subject to agreement with the employer

Statutory Employee Benefits

Beyond leave and base pay, Vietnamese employers must provide a defined package of statutory benefits funded through mandatory social contributions to Vietnam Social Security and the trade union system. The core benefits are as follows:

• Social insurance (Bảo hiểm xã hội): a consolidated social security scheme covering retirement pensions, survivorship, sickness and maternity benefits, and occupational accident and disease insurance. Employers contribute 17.5% of contribution salary, employees contribute 8%, with the contribution ceiling set at 20 times the reference salary of VND 2,340,000 (ceiling of VND 46,800,000 per month) under Decree 73/2024/NĐ-CP.
• Health insurance (Bảo hiểm y tế): universal health coverage under the Health Insurance Law. Employer contribution is 3% and employee contribution is 1.5% of contribution salary, capped at the same 20-times reference-salary ceiling. Covers primary care, hospital treatment, and partial drug reimbursement at registered public and private facilities.
• Unemployment insurance (Bảo hiểm thất nghiệp): provides income support to redundant workers for up to 12 months. Employer contribution is 1% and employee contribution is 1% of contribution salary, capped at 20 times the regional minimum wage.
• Trade union fee (Phí công đoàn): employers pay 2% of the total salary base used for social insurance to the Vietnam General Confederation of Labour under Decree 191/2013/NĐ-CP, regardless of whether the employees have formed a workplace union. Union-member employees contribute membership dues of 1% of contribution salary, capped.
• Occupational accident and disease insurance: included within the 17.5% employer social insurance rate at a default 0.5%, with the option to apply a reduced 0.3% rate for low-risk enterprises that meet the conditions in Decree 58/2020/NĐ-CP.

The individual rates feed directly into the Employer Contributions and Employee Contributions tables in H2 4 below, which give the full breakdown. Employers must remit contributions by the last day of the month following the payroll month and report discrepancies to Vietnam Social Security within 30 days.

Recent Regulatory Updates

Several important employment changes took effect in 2025 and 2026:

• Minimum wages increased: New regional rates were implemented on 1 January 2026
• Social insurance rules changed: The Social Insurance Law 2024 reduced the minimum pension contribution period from 20 years to 15 years and expanded certain employee benefits
• Personal income tax changed: The 2025 law introduced five new tax bands and increased personal and dependent deductions
• Work permits were simplified: Decree 219/2025 introduced a single application process and transferred more responsibility to provincial authorities

Employers should check the latest rules before hiring a new employee to ensure that the minimum wage rate, contributions, and immigration procedures remain the same.

Work Permits and Visas in Vietnam

Who Needs a Work Permit?

Most foreign nationals working in Vietnam need a work permit. Alternatively, if this is not permitted, they should provide formal confirmation that they qualify for an exemption.

Exemptions may apply to certain:

• Company owners and capital contributors
• Board members
• Heads of representative offices
• Intra-company transferees
• Short-term experts
• Other workers covered by specific legal exemptions

Please note: A business or tourist visa does not provide the right to work in Vietnam.

Eligibility and Documents

To qualify for a work permit, a foreign employee generally needs to meet the following requirements:

• Be at least 18 years old
• Meet the health requirements
• Have no disqualifying criminal record
• Hold the qualifications or experience required for the role

The application for a work permit normally includes the following:

• A valid passport
• A criminal-record certificate
• A medical certificate
• Evidence of qualifications and experience
• Passport photographs
• An employment or appointment document
• A request from the Vietnamese employer

Documents issued outside Vietnam may need to be legalized and translated into Vietnamese.

Processing Time and Validity

A complete work-permit application is generally processed within 10 working days.

Permits are normally valid for up to two years and may be renewed once for a further period of up to two years.

Applications can take longer when documents require legalization, translation, or further evidence of the employee’s qualifications.

Common Visa Types

The main visa categories relevant to foreign workers include:

Please note: Tourist visas, e-visas, student visas, and family-reunion visas do not normally authorize employment.

How an EOR Handles Work Permits

An EOR acts as the employee’s legal employer and can help to sponsor the necessary work authorization.

The EOR typically takes care of the following:

• Confirms whether the employee needs a permit
• Prepares and submits the application
• Coordinates the appropriate work visa and Temporary Residence Card
• Communicates with the relevant Vietnamese authorities
• Tracks permit and visa renewal dates

Its important to remember that the client remains responsible for providing the employee’s documents and accurate information. Hiring a foreign worker will also usually extend the onboarding process, particularly when overseas documents need to be legalized.

Payroll, Taxes, and Social Security in Vietnam

Employer Contributions

For Vietnamese employees, employers generally contribute:

Foreign employees are generally exempt from unemployment insurance, reducing the usual employer contribution.

Contribution ceilings apply and may differ between social insurance and unemployment insurance.

Employee Contributions

The employer withholds the following contributions from a Vietnamese employee’s gross salary:

Foreign employees on qualifying contracts generally contribute to social and health insurance but not unemployment insurance.

Personal income tax is deducted separately.

Income Tax

Vietnamese tax residents pay personal income tax on worldwide income. Non-residents generally pay tax only on income earned in Vietnam.

Residents can deduct a monthly personal allowance of VND 15,500,000 and VND 6,200,000 for each qualifying dependent before tax is calculated.

The 2026 monthly tax bands are:

Non-residents are generally taxed at a flat rate of 20% on Vietnam-sourced employment income.

Payroll Cycle

Payroll is normally processed monthly in Vietnamese dong. Employees should receive a payslip showing:

• Gross salary
• Social contributions
• Personal income tax
• Other deductions
• Net salary

The employer withholds the required amounts and submits them to the relevant tax and social insurance authorities.

13th-Month Salary and Tet Bonuses

Vietnamese law does not require employers to pay a 13th-month salary or Tet bonus.

However, these payments are common and are often expected by employees. If a bonus is promised in the employment contract, company policy, or collective agreement, the employer may be required to pay it.

Bonuses are generally subject to personal income tax.

Cost of Hiring Through an EOR in Vietnam

The total cost of hiring through a Vietnam Employer of Record includes the EOR’s monthly service fee, the employee’s gross salary, mandatory employer contributions, and any agreed benefits or bonuses. 

Let’s break the fees down:

EOR service fees

EOR fees in Vietnam typically range from USD 300 to USD 600 per employee per month.

Pricing depends on various factors: the number of employees hired, the role, the employee’s nationality, and the level of HR support required. Work-permit sponsorship may also affect the price.

The monthly fee usually covers employment contracts, payroll processing, tax withholding, social insurance administration, payslips, statutory reporting, and basic employee support.

Work permits, document legalisation, and immigration services may cost extra, so check what’s included before signing a contract.

Total employment cost

Beyond the service fee and gross salary, you’ll need to budget for mandatory employer contributions and any agreed bonuses or benefits.

For Vietnamese employees, mandatory employer contributions can add approximately 23.5% of the salary used to calculate those contributions.

This may differ from the employee’s full gross salary because contribution caps can apply. The percentage is generally lower for foreign employees, as unemployment insurance does not apply.

Ask the EOR for an itemised quote covering the service fee, salary, employer contributions, benefits, and any one-off charges.