Employer of Record in Vietnam

How an Employer of Record works in Vietnam

Expanding into Vietnam offers growth potential but navigating the local legal landscape can be challenging. An Employer of Record (EOR) like Rivermate acts as the legal employer for foreign companies’ staff in Vietnam. While the foreign company recruits and manages their team members, Rivermate handles all legal, payroll management, tax, and HR duties, such as concluding compliant employment agreements as well as completing mandatory social, health and unemployment registrations of new hires. Local HR experts manage the full employment lifecycle and ensure that all legal requirements are adhered to so that foreign businesses can hire with confidence.

Vietnam labor market: At a glance

The hiring market
Greatest hiring activity:	Vietnam is one of the top remote work destinations in the region. Popular cities for hiring include Ho Chi Minh City, Da Nang and Hanoi.
Hiring timelines:	Locals: around 1 week Foreign nationals: 2-4 months
In-demand sectors:	Banking, technology, software, cybersecurity and tourism.
Sectors with skills shortages:	Mid-level and specialized professional talent, advanced engineering.

The salary market
Employer tax contributions:	22.5%-23.5% on top of gross salary
Monthly minimum wage:	Depending on region tier (four tiers exist), ranges from VND 3.7 million to VND 5.31 million per month.
Average gross monthly salary:	VND 8,426,370 (2025 country average). Certain provinces exhibit much higher averages.
Personal income tax rates:	Progressive rates 5%-35%; personal deduction VND 15,500,000 per month and VND 6,200,000 per dependent. Rates applicable on annual taxable income (after applicable deductions): Up to VND 120 million: 5% VND 120-360 million: 10% VND 360-720 million: 20% VND 720 million - 1.2 billion: 30% Above VND 1.2 billion: 35% Non-residents pay a flat 20% rate.

The real cost of hiring in Vietnam

Minimum and average salaries in Vietnam

Decree 293/2025, in force since 1 January 2026, defines the minimum wage in Vietnam. Four region-based tiers apply, with each one specifying a different minimum wage. Therefore, determining the appropriate region is the first step in ensuring the minimum wage requirements are fulfilled.

Region	Regional minimum wage
I: highly urbanized major metropolitan areas (Hanoi, Ho Chi Minh City, Hai Phong, some parts of Da Nang, some parts of Dong Nai)	VND 5.31 million per month
II: surrounding developing urbanized areas and satellite cities (Binh Duong, some parts of Dong Nai, Can Tho, central parts of Da Nang)	VND 4.73 million per month
III: smaller provincial cities and emerging industrial or agricultural districts (parts of Hai Duong, Khanh Hoa, Long An)	VND 4.14 million per month
IV: rural, mountainous, less-developed localities	VND 3.7 million per month

Given the different borders between provinces and regions and their potential changes, foreign employers are advised to check the correct applicable region per Decree 293/2025/ND–CP, prior to onboarding.

The National Statistics Office publishes periodic analyses of average income across multiple dimensions such as income source, sector and region. According to aggregate national 2025 data, the average monthly gross earnings from wages and salaries amounted to VND 8,426,370. However, many of Vietnam’s provinces exhibit significantly higher averages, with the top 6 province/region averages shown below:

Province/region	2025 average monthly income of employees
Ha Noi	VND 12,133,150
Ho Chi Minh City	VND 10,680,680
Hai Phong	VND 10,291,980
Binh Duong	VND 10,242,790
Red River Delta	VND 10,220,560
Dong Nai	VND 10,137,990

Similarly, average salaries across sectors show a great deal of variability, with some indicative sector averages listed below:

Sector	2025 average monthly income
Activities of extraterritorial organizations and bodies	VND 16,472,970
Information and communication	VND 14,567,410
Financial, banking and insurance activities	VND 13,812,570
Professional, scientific and technical activities	VND 12,479,440
Construction	VND 9,101,550
Manufacturing	VND 9,057,660
Accommodation and food service activities	VND 7,783,000
Agriculture, forestry and fishing	VND 4,955,990

It is worth noting that local practice shows that employers typically review salaries at least once a year, with some performing mid-year adjustments as well.

Monthly employer social contribution costs

Contributions are paid by both employer and employee in Vietnam. One aspect requiring attention before they are even calculated is ensuring that the correct base applies. The base on which contributions are calculated must include the contractually defined salary as well as any allowances that are of a salary-like nature. This is a key step before running the first payroll as the correctly calculated base is used throughout the employment lifecycle, including for calculations of severance and unemployment benefits.

On the calculated base, an employer contribution of 21.5% (20.5% for foreigners) is payable each month. The rate is made up of several mandatory components:

• Social insurance: 17.5%
• Health insurance: 3%
• Unemployment insurance: 1%

With the exception of unemployment insurance (which is capped at 20x the regional minimum wage), the other two contributions are capped at a fixed amount, currently VND 50.6 million a month. Caps and maximum ceilings are related to the base wage adjustments, the last of which is applicable since 1 July 2026. Foreign employees generally do not participate in unemployment insurance so the 1% may or may not be applicable.

In addition to the 21.5% contribution, a 2% union fee is applicable as well. The base to be used for calculation is the amount used for social insurance fund contributions.

Employee contributions are set at a total 10.5% rate (9.5% for foreigners). The employer remits all contributions at the same time, along with withheld personal income tax.

Statutory benefits, premiums and protections

The standard working hours limit in Vietnam is eight hours a day and 48 hours per week.

• Overtime: voluntary and requires the employee’s consent. It is generally capped at 50% of the normal working hours; the monthly maximum is set at 40 hours a month while the annual limit is 200 hours per year. In some sectors, the limit may be higher. Overtime is paid at a rate of 150% when performed on a regular working day; 200% on a weekly rest day and 300% on a public holiday or paid leave day.
• Night work: a 30% premium applies to night work (between 22:00 and 06:00)
• Sick leave: paid by the state from the first day, at a rate of 75%. Between 30 and 70 working days are allowed per year, depending on the length of service and the job category.
• Maternity leave: six months (seven months in case of a second birth), paid at 100% of the average salary of the last six months, paid by the state.
• Paternity leave: anywhere from 5 to 14 working days (depending on factors), paid at a rate of 100% by social insurance.
• Annual leave: Typically set at 12 working days per year, may be extended to 14 or 16 working days for work in hazardous conditions. The eligibility increases by one additional day for every five years of service.
• Public holidays: 11 public holidays are observed in Vietnam each year.

Additional bonuses and benefits

Tet bonus
A voluntary bonus which is very commonly paid in Vietnam, the Tet Bonus is usually disbursed right before the Vietnamese Lunar New Year according to local customs. The amount is at the discretion of the employer. Generally expected from all employees despite its voluntary character.

Private health insurance
Even though the public healthcare in Vietnam is of a high level, supplementary private health benefits are common.

Calculate employment costs

Insights into hiring in Vietnam

Easier to navigate	More challenging to navigate
🟢 Hiring momentum: popular destination for remote work	🟡 Immigration complexity: no quotas but location restrictions and mandatory job advertising before application
🟢 Economic growth: strong economic growth over two decades; expanding sectors: technology, banking, and tourism	🔴 Employer cost: about 23.5% plus customary Tet bonus
🟡 Salary pressure: typically reviewed annually, no significant inflation pressure	🔴 Probation rules: defined by law; typically shorter than other markets (except for senior managerial roles)
🟡 Candidate expectations: Tet bonus and private health benefits	🔴 Fixed-term contracts: can only be renewed once, maximum of 36 months.

Vietnam-specific issue to be aware of: personal income tax finalization and registration of dependents

One thing employers must be aware of is the obligation of the company to ensure that proper personal income tax has been withheld and paid to the state. As the Vietnamese framework applies tax deductions for family members, having dependents registered with the authority is a prerequisite to claiming such deductions. Even though the registration is the responsibility of the employee, the employer may be required to make retroactive corrections should an unregistered dependent be discovered.

Related to personal income tax but as a separate aspect requiring attention, employers also must ensure that the Annual Personal Income Tax Finalization is performed accurately.

Hiring foreigners in Vietnam

Foreigners planning to work in Vietnam generally require a work permit before commencing employment in the country. Immigration departments in Vietnam review each application on a case-by-case basis, considering factors such as the sponsoring employer’s revenue, the number of locals it employs (even though no quota is in place), and how long it has been in business. For this purpose, using an EOR with an already established local legal entity may be a faster or more viable process compared to a work permit application submitted by a newly registered entity.

The role and the nature of the job are generally what determine the outcome of the application. A job posting advertising the position in the local labor market may be a prerequisite for certain job categories. Minimum salary levels apply and are worth confirming with local experts before starting the procedure.

The process takes two to four months. Work permits are typically valid for up to two years and can be renewed once.

Certain scenarios such as intra-corporate transfers or short-term assignments may be eligible for a work permit exemption certificate which still requires an application procedure to be carried out.

Compliance risks important for employers in Vietnam

Onboarding documentation

Certain onboarding process documentation is required in order for our local HR experts to compliantly register the employment. These include an ID, the Vietnamese tax code of the employee and their bank details.

Employment contracts

Employment contracts in Vietnam can be bilingual. If they are concluded for a fixed-term as opposed to indefinite duration, they can only be renewed once. A second renewal converts the employment to an indefinite-term contract, thereby altering other employment aspects such as notice period and severance pay. A maximum of 36 months applies to fixed-term contracts.

Probation

Probation periods are common but depend on seniority and are defined by the law. Intermediate-level jobs can have a 30-day probation period, 60 days are applicable for most college-level qualifications requiring roles, while enterprise managers may have a trial period of up to 180 days. All other jobs have a six-working-day limit. Employers should be aware that the law regulates that the pay during a probation period must be at least 85% of the full rate, even though in practice the pay is typically the full amount.

Terminations

Notice periods in Vietnam are governed by the law and depend on the contract type. Indefinite contracts define a 45-day notice period while for fixed-term contracts lasting from 12-36 months, that period is at least 30 days. Terminating employment contracts shorter than 12 months requires at least a 3 working day notice period.

Any employer-initiated termination requires statutory grounds for separation. Legal grounds include repeated performance issues, prolonged illness or force majeure. The employer is also required to complete an administrative process for the insurance book closure. Rivermate’s practice is to conclude mutual termination agreements for separations regardless of the grounds for termination.

The severance allowance in Vietnam is set at half a month's salary for each year spent in service. Eligibility depends on whether the employee has completed at least one year of service. Periods covered by unemployment insurance (which is in force since 2009) are generally excluded from the service period used to calculate the allowance.

Benefits of hiring through an EOR in Vietnam

The attractiveness of the labor market in Vietnam prompts many foreign companies to consider setting up their own entity in the country. For many of them, a local entity makes sense, particularly when local employees may conclude contracts or sign on behalf of the entity. A taxable presence and permanent establishment is a risk worth considering in such cases.

However, as the company setup procedure can take two to four months before being able to employ locals, using EOR services may be a better solution for small teams or for companies looking to scale quickly before full-blown setup.

Ready to take the next step in Vietnam?

Finding your ideal candidate in Vietnam is only the first step to hiring in Vietnam. Let local experts manage payroll, taxes and employee benefits in a compliant manner so that you can focus on growing your business by finding the right local talent. Talk to a Vietnam Hiring Expert today.

Sources:
National Statistics Office: Monthly average income per capita from salary/wages
National Statistics Office: Monthly average income per capita at current prices by income source and by province
National Statistics Office: Monthly average income per employee worker by kind of economic activity by Economic activity
PwC Tax Summary Vietnam
Labor Code, Law No. 45/2019/QH14
Decree 293/2025/ND-CP prescribing minimum wage levels
Law on Trade Unions No. 50/2024/QH15 (Trade Union Law)
Regulations on personal income tax deductions for dependents
July 2026 change on social contribution caps