An Overview of Employing in Vietnam
Vietnamese Dong (VND)
Salary Pay Date
Salaries are paid monthly on the last working day of the month, unless otherwise stipulated in the contract of employment.
Employers have the legal right to establish their own pay scales and salary structures, provided that the minimum wage requirements are met.
The minimum wage in Vietnam is regional and varies dependent on the job role.
Region i: urban Hanoi and Ho Chi Minh City
Region ii: covers rural Hanoi and Ho Chi Minh; urban Can Tho, Da Nang and Hai Phong
Region iii: includes provincial cities and districts of Ban Ninh, Bac Giang, Hai Duong, and Binh Phuc provinces
Region iv: all remaining localities
A 13-month salary bonus is common and is traditionally paid prior to the Lunar New Year or at the end of the calendar year.
There are no legal guidelines for bonus payments; however, they typically range between 1 to 3 months’ salary.
Any additional bonus entitlement should be outlined in the contract of employment.
The Vietnam (Viet Nam) Social Security System (VSS) manages all funds relating to social, health and employment benefits.
Both employers and employees are required to pay monthly contributions to social insurance, health insurance and unemployment insurance.
Basic healthcare insurance is paid through the social security contributions and entitles all employees to basic public healthcare. Employees will be provided with a health insurance card, granting them access to healthcare and treatment.
It is common for employees to provide supplementary private healthcare and life insurance for employees.
Employers are required to pay monthly contributions to Viet Nam Social Security to cover social, health and unemployment insurance.
Social insurance provides cover against sickness, maternity, retirement, occupational diseases, invalidity, and death.
The employer is additionally obliged to withhold the employee’s contribution from their salary and is responsible for the payment of all insurance contributions each month.
The rate of contribution varies dependent on whether the employee is a Vietnamese national (local employee) or a foreign employee residing in Vietnam.
The threshold for Social Security contributions and Health Insurance is 20 times the minimum base salary (VND 29,800,000.00 – January 2022). Unemployment Insurance is capped at 20 times the regional minimum wage.
Please note: Social Insurance contributions are reduced by 0.5% until 30th June 2022, applying the 0% contribution rate to the Labour Accident and Occupational Disease Fund. This contribution should instead be used to support employees affected by COVID-19.
A written contract detailing all terms of employment is a legal requirement in Vietnam. Contracts should be drawn up in Vietnamese or dual English- Vietnamese.
There are two types of labour contract identified by the Vietnam Labour Code:
- Definite-term: terms of 36 months or less. These can only be renewed once.
- Indefinite-term: no fixed period
Employees should be registered with the Vietnam Social Security (VSS) prior to their start date.
Foreign employees will be required to undergo a medical check as part of their work permit application.
Employers may choose to provide a probationary period in the contract of employment.
This must not exceed 60 days, in accordance with the revisions made in the Labour Code 2019.
For employees in high-managerial positions, the probation period may be extended up to 180 days.
During the probationary period, either party may cancel the signed agreement without prior notice or compensation.
Normal working hours should not exceed eight hours per day and 48 hours per week.
Current government guidance encourages employers to offer a 40-hour working week.
Employees are entitled to a 30-minute break during day shifts that exceed six hours.
It is customary to record working hours.
Vietnam Labour Laws identify the maximum overtime hours as 12 hour per day; 40 hours per month and 200 hours per year. (In certain sectors this is extended to up to 300 hours per year).
Overtime hours should be compensated at a minimum rate of 150% of the employee’s contracted hourly wage. This is increased to 200% if overtime is carried out on a weekly day off and 300% on a public holiday.
Employees are entitled to paid leave for: their wedding (3 days); the wedding of their child (1 day); the death of a parent, spouse, or child (3 days).
The termination process in Vietnam is complex and favours the employee unless grounds for termination are legally identified. The dismissal of an employee by an employer is permitted for a breach of ‘labour discipline’ and strict procedures must be adhered to.
Female employees cannot be dismissed for any reasons involving pregnancy or marriage.
Both male and female employees are protected from dismissal whilst caring for a nursing a child under 12 months of age.
Employees may terminate their contract without reason, provided that they serve the notice period stipulated in their contract.
The Labour Code identifies the minimum statutory notice periods for both employers and employees:
- Definite term contracts: 30 days
- Indefinite term contracts: 45 days
- Contracts with duration of less than 12 months: 3 days
In specific cases, outlined by the Labour Code, employees may resign without providing advance notice.
Employees with over one year of service are entitled to severance pay equal to one-half of their month’s salary for every year of continuous employment.
Severance payment will not be granted if the employee has been dismissed for breach of contract.
Employees are entitled to a minimum of 12 days of paid annual leave, excluding public holidays.
The holiday year in Vietnam runs from January to December. Employees with less than twelve month’s service will be granted a pro-rata entitlement equal to one day for every month worked.
Following this, employees will receive an additional paid day of leave for every five years of service.
Employees may wish to carry leave forward up to 31st March of the following year, or payment may be taken in lieu of untaken leave.
In addition to the 11 public holiday days observed in Vietnam, a foreign employee is entitled to one day off for the traditional new year and for the national day of their own country.
If a public holiday should fall on a weekend day, the employee is entitled to take the next working weekday off.
Public Holidays 2022
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