Employer Payroll Tax
Employee Payroll Taxes
Employee Income Tax
The following wages are the minimum salary for untrained employees per region.
Region I: VND 4,420,000
Region II: VND 3,920,000
Region III: VND 3,430,000
Region IV: VND 3,070,000
The minimum salary for trained employees must be higher than at least 7% of the regional minimum base salary.
Salaries are paid on a monthly or semi-monthly basis on an agreed payday.
In case of prescribed force majeure events with no remedial actions are available, the payment can be delayed for 1 month.
Interest on late payment of salary must be paid to the employee if it is delayed by more than 15 days.
A bonus is not compulsory in Vietnam but is encouraged.
It is Vietnamese custom that the 13th salary is paid at Tet holiday or at the year-end.
Normal working time must not exceed 48 hours per week.
Overtime can be implemented with the agreement of both the employer and employee.
The number of overtime hours 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 in which overtime shall not exceed 300 hours per year.
The Overtime pay rate is as follows:
normal weekdays – 150%
weekend – 200%
public holidays – 300%
Overtime during a night shift will be according to the above classifications with the following rates respectively, 200% (or 210%), 270% and 390%.
Employees are entitled to a minimum of 12 days per year.
For every 5 years’ working for an employer, the annual leave increases by 1 day.
There is no specific regulation on the carryover policy in the law, however, it is interpreted by the authority that carryover is not allowed and unused leave must be paid in cash to the employee. In practice, many companies apply the carryover policy instead of making payment for the unused leave.
There are 10 official paid holidays.
Sick leave is covered by the Social Insurance Authority. Employees who join compulsory Social Insurance are entitled to sick leave of up to 30 days (in general) and to maximum of 60 days (in certain circumstances).
Sick allowances: 75% of the salary of the month preceding the employee’s leave.
There are a number of maternity-related leaves:
Prenatal Check-ups Leave: up to 5 occasions, 1 day for each occasion. If her fetus is unstable, the mother is entitled to 2 days off for each check-up. Maximum entitlement: 10 days.
Mothers are entitled to a 6-month maternity leave. In the event of twins, the leave is extended by one month for each infant from the second one.
Maternity allowance: 100% of the salary of the month preceding the employee’s leave paid by the Social Insurance Authority.
Paternity leave can be 5 to 14 days, depending on the specific case.
Paternity allowance: 100% of the salary of the month preceding to the employee’s leave paid by Social Insurance Authority.
Parents can take up to 20 days per year for parental leave until the child reaches the age of 3 and up to 15 days per year if the child is between the ages of 4 and 7.
Childcare leave allowances: 75% of the salary of the month preceding the employee’s leave paid by the Social Insurance Authority.
Marriage Leave – 3 days
Children’s Marriage Leave – 1 day
Personal Leave (Death of spouse, child, parents, parents-in-law) – 3 days
Unilateral termination from the employee side only requires advanced notice.
Unilateral termination by an employer is restricted except for the case of expiry of the labor contract or if the employee reaches retirement age and applies for a pension. In most of the other cases, bilateral termination shall be applied.
The notice period is 3 working days for the seasonal contract, i.e. contract of less than 1 year; 30 days for definite labor contract, i.e. contract with for 1-3 years; or 45 days for an indefinite labor contract.
In a probation period, the employer must give the results 3 days before the end of the probation period.
Severance pay is half a month’s salary per year of service.
When termination of the contract is due to changes in the structure or technology, or due to economic reasons, job loss allowance shall be applied in this case with the rate of 1 month salary for each year of work and at least equal to 2 months salary.
A probation period is optional and a common practice in Vietnam.
Employers and employees can negotiate a probationary contract, which must include the rights and responsibilities of both parties during the probationary period. The probationary period cannot be extended and each position can only have one probationary period.
The length of the probationary period is based on the complexity and skill required to do the work and varies between 6 to 60 days. The wage for an employee during the probation period must be agreed upon by both sides but cannot be less than 85% of the wage for the official job.
Employees working under seasonal labor contracts are not subject to probation.
VAT is 10% standard rate, with a reduced rate of 5% on essential goods and services.