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Before hiring employees in Vietnam, there are a few important things you’ll need to know. Firstly, in Vietnam, notice periods vary depending on the type of role. For example, the notice period is three working days for seasonal contracts, 30 days for fixed-term labor contracts, and 45 days for indefinite-term labor contracts.
It’s also important for employers to know that in Vietnam, overtime work can be implemented with the agreement of both the employer and employee, but cannot exceed 50% of the normal working hours in a day.
We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform.
Get an overview of what you need to know when hiring in Vietnam below.
At a Glance
13th / 14th SALARY
It is common in Vietnam to offer a 13th month salary bonus across all sectors.
Good to know
- A bonus is not compulsory in Vietnam but is encouraged. It is customary to pay all employees a “13th salary” before the Lunar New Year holiday or at the year-end.
- Apart from salary and bonuses, Vietnamese employees may also be entitled to other allowances and benefits. Some such taxable benefits include payments for power and water, transportation allowances, premiums for life insurance, housing rent, healthcare services, and even membership fees to golf clubs, tennis courts, and other exclusive clubs.
- Post-employment non-compete agreements are not enforceable in Vietnam.
Employees in Vietnam work eight hours a day, 48 hours per week.
Overtime work can be implemented with the agreement of both the employer and employee, but cannot exceed 50% of the normal working hours in a day. Overtime cannot exceed 30 hours per month and a total of 200 hours per year, except for some cases stipulated by the government.
Overtime work is paid at the following rates:
- Normal weekdays: 150% of regular wages
- Weekend: 200%
- Public holidays: 300%
In Vietnam, the probationary period ranges between six and 60 days.
The notice period is three working days for seasonal contracts (contracts lasting less than one year), 30 days for fixed-term labour contracts, and 45 days for indefinite-term labour contracts.
Post-employment non-compete agreements are not enforceable in Vietnam. They may, in some cases, be enforceable in a civil contract between employer and employee.
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Paid time off
Employees in Vietnam are entitled to a minimum of 12 days of vacation leave per year. They earn one additional annual leave day for every five years of consecutive service for an employer.
In Vietnam, sick leave entitlement depends on how long an employee has paid their social insurance premiums. It is:
- 30 days if they have paid social insurance premiums for less than 15 years;
- 40 days if they have paid social insurance premiums for 15 years to less than 30 years; and
- 60 days if they have paid social insurance premiums for 30 years or more.
Sick leave is paid at 75% of the salary of the month preceding the employee’s leave.
Employees are entitled to six months of maternity leave. For the birth of more than one child at a time, an employee is entitled to take an additional one month of leave for every additional child calculated from the second child onwards.
Maternity allowance is equal to 100% of the average monthly salary on which social insurance premiums were based for the six months preceding the leave, and is capped at 20 times the base salary.
Employees are also entitled to five to 14 days of paternity leave, depending on the specific case, and are paid a prorated amount of the monthly allowance by the social insurance fund.
Employers in Vietnam are required to pay 21.5% on top of an employee’s salary in social contributions. This includes:
- Social Insurance: 17.5%
- Health Insurance: 3%
- Unemployment Insurance: 1%
Corporate employers also pay 2% to a Trade Union Fund.
In Vietnam, employees pay between 5% and 35% in taxes depending on their income bracket. They also pay 10.5% in social security taxes.
Termination of employment
Terminated employees (except those dismissed for a breach of company's rules) who have been working for an employer for at least one year are entitled to severance payments. This must be equal to half a month's wage for each year of employment.
Severance is not required if the employee is absent from work without justifiable reason for five consecutive working days or more.
If the employer made contributions to the employee's unemployment insurance fund, they are not required to pay severance for the duration of time that the employees participated in the unemployment insurance fund.
Start hiring employees in
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.
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