Hire employees in Vietnam

Quick answers

The questions leadership teams ask first, answered directly. Detail follows further down the page.

Hiring routes compared

Here is how the three routes stack up on speed, capital, tax exposure and labor compliance.

What an employee costs in Vietnam

Vietnam runs a three-part compulsory insurance scheme administered by Vietnam Social Security (VSS), plus a trade union levy every employer pays. Social and health insurance are capped at 20 times the statutory base salary (mức lương cơ sở), unemployment insurance at 20 times the regional minimum wage; the union levy has no cap.

For an employee on VND 50,000,000 a month (VND 600 million a year), budget roughly VND 766 to 791 million all-in, about 27.5% to 31.8% above base. Ask us for a cost model with current ceilings applied.

Payroll and tax

Payroll is strictly monthly and strictly in dong. Under State Bank of Vietnam foreign exchange rules, every contract, offer letter, payslip and salary payment to a Vietnamese resident must be in VND; quoting or paying in USD or EUR attracts penalties. Salaries are usually paid between the 25th and the last day of the month, or on the 5th of the next month, by bank transfer. Each cycle needs an itemised payslip (phiếu lương) showing gross pay, overtime, allowances, SHUI deductions and PIT. SHUI and the union levy are due by the last day of the month, the monthly PIT declaration by the 20th of the following month, and annual PIT finalisation by 31 March.

Personal income tax

The employer withholds PIT from tax residents (183 days or more in Vietnam, or a registered or leased residence for 183 days) on a progressive scale from 5% on monthly taxable income up to VND 5 million to 35% above VND 80 million. Non-residents pay a flat 20% on Vietnam-sourced pay. Before tax, employees deduct their own 10.5% SHUI, a personal relief of VND 11,000,000 a month and VND 4,400,000 a month per registered dependant. Lunch allowances are PIT-free up to VND 730,000 a month. The Tet bonus is taxable but exempt from SHUI if structured as a performance bonus.

Statutory minimum wage

Vietnam sets monthly and hourly minimum wages for four geographic zones by government decree on the recommendation of the National Wage Council. Zone I covers urban Hanoi, Ho Chi Minh City, Hai Phong and the Binh Duong industrial belt; Zone IV covers rural and remote districts. Base salary must not fall below the zone rate, and that base drives overtime, paid leave and severance calculations.

Leave and mandatory benefits

• Paid annual leave. 12 working days for normal conditions (Article 113), 14 to 16 for hazardous work, plus 1 extra day for every 5 full years with the same employer. Unused days are paid out on termination.
• Public holidays. 11 paid days across 6 events: New Year's Day, 5 days for Lunar New Year (Tết), Hung Kings Commemoration, Reunification Day, International Workers' Day and 2 days for National Day, with substitute days for weekends. Foreign employees get 2 more for their own national and new year holidays.
• Sick leave. 30 to 60 days a year (180 for long-term illness), paid by VSS at 75% of the insured salary, not by the employer.
• Maternity. 6 months, paid by VSS at 100% of the insured wage plus a lump sum of twice the base salary. Mothers of infants under 12 months get a paid 60-minute daily nursing break and cannot be dismissed.
• Paternity. 5 to 14 working days depending on the delivery, paid by VSS.
• Family leave. 3 paid days for the employee's marriage, 1 for a child's marriage, 3 for the death of a parent, spouse or child.
• Tet bonus. A 13th-month salary paid before Lunar New Year (lương tháng 13). Discretionary under Article 104, but tech, finance and executive candidates will reject offers without it. Prorated for under 12 months' service.
• Annual health check. Employers must fund at least one full medical examination a year for every employee.
• Working time. Maximum 8 hours a day and 48 a week, with 40 the office standard. Overtime needs consent and pays 150% on a normal day, 200% on a rest day and 300% on a public holiday, plus 30% at night. Caps are 40 hours a month and 200 a year (300 in notified sectors).

Termination and notice periods

Vietnam recognises only two contract types: definite-term (maximum 36 months, renewable once, then it converts to indefinite) and indefinite-term. Probation runs up to 180 days for enterprise managers, 60 for degree-level roles, 30 for vocational roles and 6 working days otherwise, at no less than 85% of full salary, and either side can end it without notice or severance. After probation, an employer can only terminate unilaterally on an Article 36 ground: repeated failure to perform against registered criteria, illness beyond 12 months (6 on a definite contract), force majeure, failure to return after a suspension, retirement age, or 5 consecutive days of unexplained absence.

• Vietnamese text prevails. Contracts with Vietnamese citizens must be in Vietnamese (Article 14). Bilingual versions are allowed, but the Vietnamese wording governs in any dispute.
• Internal Labour Regulations. With 10 or more staff you must register written regulations (nội quy lao động) with the provincial labor department after consulting employee representatives. Performance dismissals rely on criteria written into them.
• Severance versus job-loss allowance. Severance (Article 46) is half a month's wage per year of service on contract expiry, lawful termination or mutual separation. Job-loss allowance (Article 47) is one month per year, minimum 2 months, on restructuring or economic grounds. Both cover only periods not insured by unemployment insurance, at the average wage of the last 6 months.
• Disciplinary dismissal. Reserved for theft, embezzlement, gambling, disclosing trade secrets or absence of 5 days in 30 or 20 in 365. It requires a hearing with written minutes and the employee representative body present.
• Unlawful termination (Article 41). Reinstatement, full back pay and SHUI, plus at least 2 months' wages. If the employee declines to return, severance plus damages.

Can I use independent contractors?

Only if the person runs a genuine registered business household (hộ kinh doanh) or company, serves several clients, issues electronic VAT invoices and controls how and when the work is done. Article 13.1 of the Labour Code says that any agreement, whatever its title, is an employment contract if it involves paid work under the management, direction or supervision of the other party. Inspectors, tax auditors and the courts look for fixed hours, KPIs and reviews, a single income source, a regular monthly fee, company email or equipment, and a job title used externally. On reclassification you owe the full employer and employee SHUI back to day one (21.5% plus 10.5%) with interest of 0.03% a day, 2% union levy arrears, progressive PIT of up to 35% plus a 20% underpayment penalty, fines of up to VND 75,000,000 per violation under Decree 12/2022, and accrued leave and severance. An EOR is the compliant alternative for anyone who works like an employee.

The legal framework in brief

Vietnamese employment law is a civil law system built on one code, implementing decrees and circulars, and enterprise-level instruments such as Internal Labour Regulations. The sources you will hear referenced most:

• Labour Code 2019 (Law 45/2019/QH14). Contracts, probation, working time, leave, discipline and termination.
• Decree 145/2020/ND-CP. Implementing rules on working conditions, collective bargaining, discipline, overtime and female worker protection.
• Decree 12/2022/ND-CP. Administrative fines for labor and social insurance violations.
• Decrees 152/2020 and 70/2023/ND-CP. Work permits and exemptions for foreign nationals, including the 15-day domestic recruitment posting.
• Decree 13/2023/ND-CP on Personal Data Protection. Explicit consent, impact assessments and a transfer impact assessment filed with the Ministry of Public Security within 60 days of moving employee data offshore.
• Law on Social Insurance, Law on Health Insurance, Law on Employment. The three-part SHUI scheme.
• Law on Occupational Safety and Health 2015. Mandatory OSH training and safety officers.

Where the talent is

Vietnam is one of Southeast Asia's fastest growing economies, with a population over 100 million and more than 55,000 software engineering and IT graduates a year from institutions such as Vietnam National University, Hanoi University of Science and Technology and FPT University. Software and shared services compensation runs 40% to 65% below Singapore, Hong Kong or Australia. Vietnamese is the mandatory contract language; English is common in tech and multinational teams.

This guide is general information, not legal, tax or immigration advice. Vietnamese labor, social insurance, tax and data protection rules change regularly through decrees, circulars and provincial resolutions. Confirm current figures with a qualified adviser or with Dryft before acting. Last reviewed September 2026.