Guide to employment, payroll and benefits in

Viet Nam

Rivermate offers complete payroll, benefits and compliance services for

Viet Nam

01. Overview

Last updated: 

August 19, 2021

Currency
Vietnamese Dong
Capital
Ha Noi
Ease of doing business
Language
Vietnamese
Population
97338579
GDP growth

02. Grow your team in

Viet Nam

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Viet Nam

, particularly if you don't have established local relationships. You can hire employees in

Viet Nam

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Vietnam is a country in Southeast Asia that is officially known as the Socialist Republic of Vietnam. It is situated on the eastern edge of the Indochinese Peninsula and is divided into 58 provinces and five municipalities, covering 331,699 square kilometers and home to over 96 million people, making it the world's sixteenth most populous nation. Vietnam has land borders with China to the north, Laos and Cambodia to the west, and maritime borders with Thailand via the Gulf of Thailand and the Philippines, Indonesia, and Malaysia via the South China Sea. Hanoi is the capital, and Ho Chi Minh City is the largest city. Vietnam was inhabited as early as the Paleolithic period, according to archeological excavations. The Han dynasty annexed the ancient Vietnamese republic, which was based on the Red River valley and nearby coastal areas, in the 2nd century BC, making Vietnam a division of Imperial China for over a millennium. In the 10th century AD, the first independent monarchy was created. This paved the way for successive imperial dynasties as the country spread southward until the French colonized the Indochina Peninsula in the late nineteenth century. The Proclamation of Independence from France in 1945 gave birth to modern Vietnam. After defeating the French in the First Indochina War, which ended in 1954, Vietnam was split into two opposing states: communist North and anti-communist South. Conflicts became more intense during the Vietnam War, which saw extensive American involvement in support of South Vietnam while the Soviets and Chinese backed the North. The war ended in 1975 with the North Vietnamese victory. Following the reunification of North and South Vietnam as a communist state under a unitary socialist government in 1976, the country was economically and politically isolated until 1986, when the Communist Party implemented a series of economic and political reforms that aided Vietnamese integration into world politics and the global economy. Vietnam has experienced high economic growth as a result of successful reforms, consistently ranking among the world's fastest growing economies. Vietnam is a regional power and a middle power in international relations. It is a developing nation with a high Human Development Index, but it faces problems such as corruption, pollution, poverty, insufficient social security, and a weak human rights record, which includes increased persecution of religious groups and human rights activists, as well as increased restrictions on civil liberties. Vietnam is a member of a number of major international and intergovernmental organizations, including the United Nations, ASEAN, APEC, the CPTPP, the Non-Aligned Movement, the OIF, the RCEP, and the World Trade Organization, and has twice taken a seat on the UN Security Council.

04. Public holidays

05. Types of leave

Paid time off

After 12 months of service, employees are entitled to 12 days of paid yearly leave, plus one additional day for every five years of work with the same company. Vacation is prorated for employees with fewer than 12 months of service. If annual leave is not taken by the end of the year, employees may be paid in place of it.

Public holidays

The following public holidays are observed in Vietnam:International New Year’s DayVietnamese New Year’s EveVietnamese New Year’s DayTetLiberation Day, also known as Reunification DayInternational Labor DayIndependence DayHùng Kings’ Temple Festival (10th day of the third lunar month)

Sick days

Employees are entitled to anywhere from 30 to 70 days of paid sick leave, depending on how much they contribute to Vietnam's social security system and the sector. Employees in dangerous work conditions, as well as those who have contributed more, are entitled to additional sick leave. While on leave, employees are paid a proportion of their regular salary.

Maternity leave

In the case of the birth of twins or multiples, female employees are entitled to six months of paid maternity leave, plus an extra 30 days for each subsequent kid. Depending on whether the infant was born spontaneously, via C-section, or as a single or multiple birth, male employees are entitled to five to fourteen days of paid leave.

Paternity leave

There is no statutory paternity leave.

Parental leave

Apart from the already mentioned terms regarding maternity leave, there are no other provisions in the law of Vietnam regarding parental leave.

Other leave

06. Employment termination

Termination process

Employers and employees both have the right to cancel an employment contract with notice. The notice time varies between three and forty-five days, depending on the nature of the contract and who is providing notice. No notice is necessary in certain cases.


Employers are generally required to pay severance to employees with at least 12 months of service, unless the individual is terminated for breaching business regulations, retires with a pension, or terminates the contract illegally or unilaterally. Severance pay is equivalent to one-half month's salary for each year of service.

Notice period

According to the Vietnam labor code, an employer may terminate a labor contract by providing 30 working days' advance notice for a fixed-term labor contract and 45 working days for an indefinite labor contract. Employers, on the other hand, must have adequate legal grounds for terminating employees.

Severance pay

When a worker has worked for more than one year, he or she is entitled to severance pay equal to half a month's wages plus any other benefits, if any, for each year of service. Severance pay must be paid within seven days of termination.

Probation period

In Vietnam, it is customary to provide new employees with a probationary period. A probationary period of no more than 60 days for work requiring specialized or highly technical skills, or 30 days for other types of work, is required.

07. Working hours

General

In Vietnam, the standard work week is eight hours per day and 48 hours per week spread over six days, though this may be reduced in certain industries. Each employee is entitled to at least one day of paid time off per week.

Overtime

Overtime can be implemented with both the employer and employee's consent. Overtime hours cannot exceed 50% of a day's normal working hours. Overtime is limited to 30 hours per month and 200 hours per year, except in certain instances specified by the government, in which overtime is limited to 300 hours per year.


Overtime is compensated at 150 percent of the regular pay rate on normal weekdays. Weekend overtime is compensated at 200 percent of the regular rate of pay. On public holidays, overtime is compensated at 300 percent of the regular rate of pay. Overtime during a night shift will be paid at least twice the regular pay rate.

08. Minimum wage

General

The following wages are the minimum salary for untrained employees per region.


In Region I, the minimum wage is VND 4,420,000. In Region II, the minimum wage is VND 3,920,000. In Region III, the minimum wage is VND 3,430,000. In Region IV, the minimum wage is VND 3,070,000.


The minimum salary for trained employees must be higher than at least 7% of the regional minimum base salary.

09. Employee benefits

General

The national system provides basic insurance.

Employers are required by law to offer health insurance to their workers and to conduct yearly health exams.

Supplementary health and life insurance is often given to workers as a perk in order to provide greater coverage than the mandatory health insurance. Small businesses may offer a stipend in place of obtaining insurance.

Extra vacation time is often requested. Employees often anticipate team excursions and business vacations, which are seen as a perk. Such team activities must be regarded essential in a nation with considerable employee turnover.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Viet Nam

to hire a team takes time, money, and effort. The labor law in

Viet Nam

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Viet Nam

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Viet Nam

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Viet Nam

via our Employer of Record / PEO solution.

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