Vietnam Introduction

Vietnam is a country in southeast Asia bordered by China, Laos, and Cambodia. The country is divided into the highlands and Hong River Delta in the north, the Annamite Range and coastal lowlands in the center, and the Mekong Delta in the south. Vietnam is considered a developing country and one of the fastest growing economies of the 21st century.


23.5% (estimated)

★  17% – Social Insurance

★  3% – Medical Insurance

★  0.5% – Work Accident Insurance

★  1% – Unemployment Insurance

★  2% – Labor Union Fee

Employment Terms

Types of Contracts

The standard working hours in Vietnam are 8 hours per day, 48 hours per week. If an employee works beyond the maximum of 48 hours, they will be paid overtime as follows:

The maximum overtime hours that can be worked are 12 hours per day, 40 hours per month, 200 hours per year.

Paid Leave

Vietnam has 2 types of minimum wages: National and Regional

National minimum wage: The minimum wage in Vietnam is currently 1,800,000 Vietnamese Dong (VND) per month.

Regional minimum wages: For employees without professional training the wages are as follows:

For employees with professional training, add 7% to each amount above. Minimum wages are subject to change each year in July, and tend to increase.

Region definitions

  1. Region I: Including cities, districts, and towns with developed economies(such as Hanoi, HCMC, and central cities of province/prefecture)
  2. Regions II: Including districts, provinces, and suburban cities with relativelydeveloped economies (2-ranked cities of the province or prefecture).
  3. Region III: Including districts, and towns, with a decent economic level butlower than in Region II.
  4. Region IV: Including districts and towns with undeveloped, difficult, andextremely difficult economies (remaining regions and areas)

Probation Period

The maximum probation allowed in Vietnam is 2 months, or 60 days.

Probations are usually managed by a probation contract, which is not subject to labor law. All terms depend on agreements between employee and employer. During probation, there is no mandatory notice period and there is no notice given unless agreed in the contract.

13th Month Salary

In Vietnam, it’s common to pay employees a 13th-month salary, but not required. Overall, 99% of employers pay employees on this salary. This salary can be paid either at the end of the calendar year or on a rolling 12-month basis from the start of employment.

The amount paid is equivalent to 1 month of basic salary. If paid on a calendar-year basis and the employee has completed less than 12 months of service, the amount distributed is based on the number of months worked.

Taxes & Local Employment Costs

Please note that the contributions below all apply after probation is completed, as probation contracts are separate agreements that are not subject to labour law in Vietnam.

Employee Taxes

Income tax is based on the employee’s taxable income (gross salary minus deductions based on personal circumstances). Progressive tax bands range from 5% to 35%.

In addition to income tax, the employee must contribute to the following social security insurances from their salary:

Employer Taxes & Contributions

*Note that these are often rolled up into social insurance for a total of 17.5%.

Types of Leave

Annual Leave

Employees are entitled to a minimum of 12 days of annual leave per year. This is distributed on a monthly basis for employees with less than 1 year of service.

Sick Leave

Employers are not required to pay for sick leave in Vietnam. Social and medical insurance usually cover necessary payment for sick leave. However, some companies may add sick leave as an additional benefit

In order to claim social insurance for sick leave, employees have to show official documentation from a doctor as proof.

The maximum amount of sick leave that can be taken is 30 days per month, 180 days per year.

Maternity Leave

Pre-birth Leave

In the case of female employees with prenatal care: they are entitled to take leave from work to go to prenatal care 5 times, 1 day each time. (If the employee is far from the medical examination and treatment facility or the pregnant woman has a medical condition or an abnormal pregnancy, she is entitled to 2 days off for each prenatal check-up.)

Postbirth Leave

The mother is entitled to 6 months of leave, though can voluntarily come back to work after 4 months. This cannot be enforced by the employer.

During this leave, the government pays approximately 100% of the salary used to contribute to social security over the previous 6 months (see Taxes and Contributions for more information). In addition, 80% of the hospital fees associated with the birth are reimbursed by the government.

In case the employee has twins or more and has to have surgery, she is entitled to an additional 14 working days off. If a female employee has a child less than 1 year of age, their contract cannot be terminated.

Paternity Leave

Employees are entitled to the following leave after becoming a father:

Public Holidays

 17 days. If public holidays fall on a weekend, the following working day(s) will be given as time off.


Private Pension

Employees do not typically contribute towards their own retirement schemes in Vietnam as there is a comprehensive state-run retirement scheme.

Termination Process

Notice Period

During probation, there is no mandatory notice period and there is no notice given unless agreed in the contract. For fixed-term contracts, if the contract is due to expire, the employer should announce this 15 days before the end date.

For termination before the contract end date, the employer must show evidence for a reason for termination, such as:

For fixed-term contracts terminated before the end date, the employer must give notice of termination at least 30 days. For indefinite contracts, the employer must give a notice of at least 45 days. If a female employee has a child less than 1 year of age, their contract cannot be terminated.

Statutory Payments

Employees should be paid any unused leave in the final salary, including any leave carried over from previous years.

If the contract is terminated illegally (without cause), employees can take the company to court, with a minimum payment of 2 months’ salary, increasing by 1 month per year of service. The maximum payment that can be awarded is the pay that would be due to the employee for the remainder of their contract.

Additional Information

While not mandatory, it is customary in Vietnam to pay a 13th-month salary bonus for the Lunar New Year or the end of the year.

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