Your guide to Vietnam payroll

For companies paying employees in Vietnam, getting payroll right is key to attracting and retaining local talent. Managing payroll in Vietnam isn’t just about paying people on time; it’s about staying compliant with local labor laws, tax regulations, and reporting requirements.

However, navigating the country’s rules can be complex, especially for USA businesses paying employees in Vietnam. That’s why many global companies choose to work with an Employer of Record (EOR). 

An EOR like Payoneer Workforce Management assists with payroll, benefits, and compliance on your behalf, offering a simple and reliable way to pay local talent in Vietnam.

Payroll in Vietnam: Wages and other payments

From payroll cycles and minimum wage to leave entitlements and bonuses, here’s what employers need to know.

Payroll cycle

The payroll cycle in Vietnam is usually monthly, with employees being paid by the last working day of the month via bank deposit in Vietnamese Dong (VND).

According to the Labor Code, employers can set their own payment cycle. Workers can be paid on a monthly, fortnightly, or weekly basis, so long as both the employee and the employer agree on the schedule. 

Minimum wage

Vietnam enforces regional minimum wages. As of 2025, the common minimum wage in Vietnam is VND 2,340,000 per month. This applies to employees working for state-owned organizations.

Otherwise, the following regional minimum wage rates apply:

Region	Minimum wage per month  (VND)
1	4,960,000
2	4,160,000
3	3,640,000
4	3,250,000

Converted hourly rates hover around VND 23,800 (roughly $0.97) in Region 1 and lower in other regions.

Overtime should not exceed 50% of the employee’s normal working hours in 1 day, and must be compensated at premium rates. Rates may vary depending on the type of day.

Sick pay

According to Vietnam payroll regulations, employees are entitled to sick leave.

This is paid by the Social Insurance Fund, not the employer. The exact allowance depends on the employee’s length of social insurance contributions:

• Up to 30 working days per year if they have paid social insurance for less than 15 years.
• Up to 40 working days per year if they have paid social insurance for 15 to 30 years.
• Up to 60 working days per year if they have paid social insurance for 30 years or more.

Maternity pay

Female employees are entitled to 6 months of maternity leave, covered by the Social Insurance Fund. For multiple births, leave extends by 1 month per additional child.

This leave can be extended beyond the initial 6 months if agreed to by the employer, but maternity payments are capped after 6 months.  

Paternity pay

Fathers who contribute to social insurance may take 5 working days of leave for a natural birth, increasing to 7 days in the case of surgery, premature birth, or complications, and up to 14 days for multiple births, depending on circumstances. 

This is paid through the Social Insurance Fund, not the employer.

Severance packages

Provided termination is lawful and not due to serious misconduct, employees with at least 12 months of service are eligible for severance pay. 

The exact amount is calculated based on tenure, equal to ½ their monthly salary for every year they have worked for their employer.

Minimum notice periods are also mandatory, depending on the employee’s contract type:

Contract type	Notice period
Indefinite-term	45 days
Fixed-term (12 to 36 months)	30 days
Fixed-term (up to 12 months)	3 days

Employees on maternity leave, pregnant employees, or those on sick leave cannot be terminated unless for valid legal reasons.

Bonus payments

While Tết (Lunar New Year) bonuses are not legally required, they are deeply ingrained in Vietnamese work culture and widely expected. This is typically equivalent to 1 month’s salary. 

Payroll taxes in Vietnam

To pay employees in Vietnam, employers are legally required to carefully follow local taxes and social security contributions. These can change often, so it’s important to stay up-to-date on the latest regulations. An EOR like Payoneer Workforce Management can offer support with tax compliance. 

Income tax

Employers are responsible for withholding income tax from employees’ salaries and remitting it to the tax authorities at a progressive rate from 5% to 35%.

Non-residents are taxed at a flat rate of 20% on Vietnam-sourced income.

Employers must deposit these withholdings by the 20th of the following month and provide employees with an annual tax statement summarizing income and deductions.

Social Security 

Vietnam’s social security system consists of 3 mandatory insurances: Social Insurance (SI), Health Insurance (HI), and Unemployment Insurance (UI). 

Employers and employees each contribute a percentage of the employee’s base salary. 

Employers must register and submit these contributions monthly to Vietnam Social Security (VSS). 

Vietnam payroll compliance best practices

Compliant payroll services in Vietnam require accuracy, timeliness, and a good understanding of the country’s labor and tax laws. To reduce risks and penalties, companies should:

• Monitor tax law and labor law changes: Vietnam updates its statutory requirements regularly, so keeping track of them is essential.
• Perform regular payroll audits: Spot and correct errors before they lead to fines.
• Provide ongoing payroll training to staff: Keep your finance and HR teams up-to-date.

Or, you could use an EOR that offers global payroll. Partnering with a provider like Payoneer Workforce Management helps simplify payroll in Vietnam, helping you handle payments, deductions, and reporting accurately.

Your options for payroll services in Vietnam

When hiring in Vietnam, companies have three main payroll options:

• Set up a local entity: This allows you to hire and pay employees directly, but is a lengthy process that involves registration and ongoing compliance.
• Hire contractors: This can be simpler and more flexible, but it comes with risks if the contractor relationship is misclassified under Vietnamese law.
• Use an EOR: An EOR like Payoneer Workforce Management can onboard employees on your behalf, handle payroll services in Vietnam, benefits, with compliance support.

Book a demo today.

FAQs

1) What is the payroll process in Vietnam?

Payroll in Vietnam typically runs monthly. Employers must calculate gross salary, deduct personal income tax and social insurance contributions, and then remit these payments to government authorities.

2) How do salaries work in Vietnam?

Salaries are usually paid once per month, often on the last working day. 

A standard salary package may include base salary, paid vacation leave, and a yearly bonus at the Vietnamese New Year. Foreign companies can pay Vietnamese employees through an EOR, with compliant support.

3) Can an EOR help with payroll services in Vietnam?

An EOR can hire employees on your behalf, manage payroll, taxes, benefits, and compliance, and support smooth payments, without you needing a local entity. Book a demo to see how Payoneer Workforce Management’s EOR services can simplify payroll in Vietnam for your business.