Table of Contents


Table of Contents


Vietnamese Dong (VND)

Payroll Frequency

Monthly or Bi-Monthly

Employer Taxes


About Vietnam

Vietnam is a Southeast Asian country surrounded by Laos, China, and Cambodia. It has natural resources in phosphates, coal, offshore oil and gas deposits, manganese, timber, and hydropower. It has a population of 96 million people and Vietnamese is the official and most used language, followed by English, some French, and Chinese. Vietnam is not a religious country with almost 82 percent of the population preferring ‘none’. Over the 1950s and 60s, the communist North attacked the anti-communist South, and the United States got involved in what became a disastrous war for all involved. A 1973 cease-fire agreement allowed the American troops to withdraw and brought about a return to communism. The country is known for little to no civil liberties under its communist dictatorship. The personal income tax rate is 35 percent and the corporate tax rate is at 22 percent. Public debt is over 62 percent of the GDP.

Employment Relationship

• Permanent Employment

In Vietnam, the provisions for permanent employment are outlined under the designation of indefinite employment. It is defined as a permanent employment contract in which the two parties do not specify the duration and time at which the contract terminates. The Labor Code provides specific benefits for employees with an indefinite term contract – they are entitled to long-term sick leave of 12 months and a notice period of 45 days. If a fixed-term contract continues even after its expiry, it is converted to an indefinite term contract.

• Fixed-Term or Specific-Purpose Contracts

Fixed-term contracts are those in which the two parties fix the agreement term for up to 36 months. They can be renewed once for the same duration within 30 days of its expiry. After that, the contract becomes an indefinite term contract if not terminated. If a contract is not renewed within 30 days, but the employee continues to work, it becomes an agreement for an indefinite term. The provisions for fixed-term contracts differ from those of indefinite term contracts. The notice period is at least 30 days for fixed-term agreements of 12 to 36 months and at least 3 days for contracts under 12 months. Fixed-term employees are entitled to long-term sick leave of 6 months.

• Temporary Employment Contratcs

In Vietnam, temporary or seasonal work is defined as work performed for a duration of under 12 months. There are no extensive stipulations for temporary work within the Labor Code. Signing a seasonal or specific-job employment contract for a term of under one year for regular work that lasts 12 months or more is prohibited, except to replace an employee temporarily. Employers can utilize labor dispatch agencies to hire temporary employees under a contract for a maximum duration of 12 months. Temporary employees cannot be hired to replace another employee during a strike or settlement of labor disputes. Temporary employees cannot be hired at a lower compensation than comparable permanent employees in the user's company. 

Probationary Period

A probationary period may only be used once per employment contract and is not renewable. Probation is not allowed if the employee works under an employment agreement with a duration of less than 1 month. The duration of probationary period depends on the type of job. Employees must be paid at least 85% of the agreed salary while on probation. During the probationary period, either party has the right to terminate the concluded probation contract or employment agreement without prior notice and compensation obligation.

Working Hours

The regular working hours cannot exceed 8 hours per day (up to 10 for those on a weekly schedule) and 48 hours per week. The working hours of employees under 15 cannot exceed 4 hours per day and 20 hours per week. The statutory hours for a workweek may not be above 48 hours, but the state encourages employers to implement a 40-hour workweek. The working hours of employees under 15 cannot exceed 4 per day and 20 per week. 

Holidays / PTO

• Statutory Holidays

There are six public, paid holidays. If the holiday falls on a weekend, employees can take the next weekday off; New Year Eve (January 1st), Tet – Vietnamese New Year (From last day of the last lunar month to 5th day of the first lunar month) (5 to 9 days), Hung Kings’ Commemoration or Death Anniversary of the Hung Kings (10th day of the 3rd lunar month) (2 days), Reunification Day (April 30), International Labor Day (May 1), Independence Day (September 2).

• Paid Annual Leave

Employees are entitled to fully paid annual leave after 12 months of service with an employer: 12 working days for employees who work in normal working conditions 14 working days for minors and persons working in heavy or dangerous jobs 16 working days for workers doing extremely heavy or hazardous work Annual leave increases by one day for every five years of employment with the same employer. Employees who have worked for less than 12 months are entitled to paid leave proportional to the number of months worked. In the case of employment termination, job loss, or other reasons, an employee who has not used or not entirely taken their annual leave is entitled to receive compensation for the unused leave days. Employees who work voluntarily during their annual leave are entitled to additional payment to the amount of 200% of their regular income and those who are asked to work by their employers are entitled to 300% of their regular income.

• Sick Leave

Annual sick leave (with proof from a doctor) is as follows: 30 days – if contributions to the social insurance fund were made for less than 15 years 40 days – if contributions are between 15 and 30 years 60 days – contributions over 30 years 180 days for extended treatment For those working in heavy or hazardous occupations, the sick leave duration increases by 10 days for every category. Sick leave is compensated by the Social Insurance Agency. Sickness allowance is equal to 75% of the employee's wages. There is also a provision of convalescence leave of 5-10 days, and the sickness benefit during this time is 30% of the basic salary. If the sickness continues even after 180 days of extended leave, the benefit is reduced to 65% of the wages for employees who have paid social security contributions for 30 years or more, 55% for employees who have paid for 15-30 years, and 50% for employees who have paid for less than 15 years. 

• Maternity Leave

Employees who have paid social insurance premiums for six months or more within 12 months before childbirth are entitled to six months of paid maternity leave. In the case of multiple births, the mother is entitled to one additional month off for each child from the second child onwards. Maternity leave cannot begin earlier than two months before the expected date of delivery. Employees adopting a child younger than six months of age are entitled to take paid maternity leave until the child turns six months old. Employees are also entitled to paid leave when they experience miscarriage, abortion, or stillbirth. An employee can return to work before the end of the maternity leave period with approval from her employer if she has taken at least four months' leave.

• Paternity Leave

Male employees who have paid social insurance premiums for at least 6 months in the 12 months preceding childbirth or adoption are entitled to a fully paid paternity leave as follows: 5 days, under normal circumstances. 7 working days when the wife gives birth to a child requiring surgery or giving birth to a child under 32 weeks old 10 working days, in case the wife gives birth to twins, additional three working days for each infant from the third child onwards 14 working days when the wife has multiple births and requires surgery Fathers are also entitled to 6 months of leave in case of adoption if the mother is not eligible for leave. 

Termination of Employment

• Notice Period

An employment contract may be terminated at any time by either party by giving written notice to the other party in advance, as follows: A minimum of 45 days for an indefinite-term employment contract A minimum of 30 days for a definite-term employment contract with a fixed term of 12-36 months A minimum of 3 working days for seasonal work employment contracts or for specific tasks with a duration of under 12 months A party that fails to comply with the notice period provisions is required to pay compensation worth the employee's salary for the remaining notice period from the termination date to the other party. An employee who does not comply with the notice period requirements must pay half a month's salary to the employer.

• Severance Benefits

Employees who have worked at the same company for over 12 months are entitled to a severance payment of half a month's salary for each year worked. In the case of redundancy, 1 month's wage is paid for each year of work. Severance benefits are not paid if the employee terminates the contract unilaterally or is dismissed due to misconduct or during probation.