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Minimum wage in Vietnam

Vietnam's payroll structure

Vietnam's social security

Vietnam's employee benefits

Seamless and compliant payroll in Vietnam and beyond

Payroll in Vietnam

Managing payroll in Vietnam is more than just paying salaries. It means staying on top of local labour laws and both required and optional employee benefits.

Vietnam enforces a region-based minimum wage system, which is revised periodically and varies by location. In 2024, monthly minimum wages range from approximately 3,250,000 VND to 4,680,000 VND depending on the region, forming the baseline for payroll calculations.

A standard payroll structure typically includes base salary, mandatory contributions (such as social, health, and unemployment insurance), allowances (for housing, meals, or transport), and performance-based bonuses. Employers must ensure compliance with statutory obligations including leave entitlements and retirement contributions.

On top of these legal requirements, employers are also offering non-statutory perks to stay competitive. These can include wellness allowances, flexible work options, or private health insurance — all of which help attract and retain great talent.

To manage these complex requirements efficiently, many international firms turn to payroll outsourcing in Vietnam. Working with a trusted payroll provider in Vietnam like CXC ensures timely processing, compliance with tax and labour codes, and accurate employee contributions. Several payroll companies in Vietnam offer end-to-end solutions, covering payroll computation, payslip distribution, tax filing, and statutory reporting.

Partnering with a specialist payroll agency in Vietnam can also reduce administrative burden and risk, especially for companies without a legal entity in the country. For multinational organisations, using global payroll Vietnam solutions helps unify payroll processes across borders while remaining compliant locally.

Selecting the right payroll service in Vietnam means choosing a partner with up-to-date regulatory knowledge and a strong track record in delivering accurate, secure, and scalable payroll support. CXC, as a trusted Employer of Record (EoR) and payroll solutions provider, offers tailored support to ensure full compliance and smooth operations.

Minimum wage in Vietnam

In Vietnam, the statutory minimum wage is determined by geographical zones, reflecting differences in living costs across the country. These wage levels are established by government decree and apply uniformly to all enterprises and employees, regardless of sector or ownership type.

Minimum wage zones in Vietnam

Vietnam’s four wage zones remain defined as follows:

Zone 1: Urban Hanoi and Ho Chi Minh City.
Zone 2: Rural Hanoi and Ho Chi Minh City, plus Da Nang and other major municipalities.
Zone 3: Provincial cities and districts such as Bac Ninh, Bac Giang, Hai Duong, Phu Tho, and Binh Phuoc.
Zone 4: All remaining localities.

Minimum monthly wages (effective from 1 July 2022, still applicable in 2026 unless revised):

Zone 1: 4,680,000 VND per month.
Zone 2: 4,160,000 VND per month.
Zone 3: 3,640,000 VND per month.
Zone 4: 3,250,000 VND per month.

Minimum hourly wages:

Zone 1: 22,500 VND per hour.
Zone 2: 20,000 VND per hour.
Zone 3: 17,500 VND per hour.
Zone 4: 15,600 VND per hour.

These rates, introduced under Decree No. 38/2022/ND-CP, remain in force as of 2026 pending further review by the National Wage Council.

Application and compliance

Employers must ensure that:

Employees paid by the hour, day, or week receive total pay that, when converted, is not below the applicable monthly or hourly minimum wage.
The minimum wage serves as a baseline for determining social insurance, health insurance, and unemployment insurance contributions.
Any wage supplements (such as skill-based or seniority bonuses) are calculated on top of the statutory minimum wage.

By adhering to these regional wage standards, employers can maintain compliance with Vietnamese labour laws while promoting fair and transparent pay practices.

Vietnam's payroll structure

Vietnam has a growing and dynamic labour market, with employment practices that reflect a balance of local customs and statutory obligations. For employers operating in or expanding to Vietnam, managing payroll effectively requires awareness of national laws and regional norms that shape how compensation is structured, calculated, and reported.

Vietnam’s payroll calculation

The country’s payroll cycle typically runs on a monthly basis, with salary payments made on the last working day of each month or on a mutually agreed date as per the employment contract. A 13th-month salary is commonly paid at the end of the year or during the Lunar New Year holiday as a bonus.

The employee payroll in Vietnam begins with calculating gross salary. From there, several mandatory deductions apply:

Social insurance (SI): 17.5% employer contribution and 8% employee contribution, capped at 46,800,000 VND.
Health insurance (HI): 3% employer and 1.5% employee, also capped at 46,800,000 VND.
Unemployment insurance (UI): 1% contribution from both employer and employee, with regional caps.

Employers also deduct personal income tax (PIT) from taxable income. PIT is calculated after deducting insurance contributions, a personal allowance of 11,000,000 VND per month, and 4,400,000 VND for each dependent. The remaining amount is taxed at progressive rates.

For instance, an employee earning 20,000,000 VND per month would have the following deductions:

SI: Employer – 3,500,000 VND; Employee – 1,600,000 VND.
HI: Employer – 600,000 VND; Employee – 300,000 VND.
UI: Employer and Employee – 200,000 VND each.

The taxable income after deductions would be 6,900,000 VND. PIT is then applied accordingly.

Vietnam’s payroll taxes

Vietnam’s payroll tax obligations extend beyond income tax. Employers are legally responsible for reporting and remitting social security contributions to relevant state agencies. These obligations apply to both local and foreign staff, although foreign workers may have different conditions depending on their visa and work permit status.

It is also important to factor in regional minimum wages, which vary by location, as well as special wage rules for night shifts or overtime. Payroll inaccuracies can result in fines or legal disputes, making compliance a priority.

Payroll processing in Vietnam

Processing payroll in Vietnam involves more than salary disbursement. Accurate recordkeeping, on-time tax reporting, and compliance with government decrees are all part of the process. Many employers choose to work with a local payroll provider or global Employer of Record (EoR) service to handle administrative complexity.

Foreign employees are subject to the same core contributions as local staff. Employers should closely monitor updates from Vietnam’s Ministry of Labour, as policy changes can affect salary caps, tax thresholds, and deduction percentages.

A well-managed payroll system supports employee satisfaction, reduces compliance risk, and aligns with Vietnam’s growing professionalism in the labour sector. Whether you are setting up your first team or scaling operations, having clarity on payroll expectations is a vital part of success.

Employers operating in Vietnam need to be aware of the country’s mandatory social security framework and broader statutory benefit obligations. These contributions not only support employees during retirement or periods of illness and unemployment but also ensure long-term workforce sustainability. Vietnam’s regulations are evolving to extend coverage and strengthen the safety net across more employment types.

Vietnam’s social security contributions

Social security contributions in Vietnam are compulsory for both employers and employees. They are made up of three main components: social insurance, health insurance, and unemployment insurance. These payments are calculated based on the monthly salary specified in the labour contract, capped at 20 times the statutory minimum wage. Contributions must be made for employees with contracts of three months or more.

Social insurance: Employers contribute 17.5% of the salary, which includes 14% for retirement and survivorship, and 3% for workplace accidents and disease. Employees contribute 8%, directed towards retirement and death benefits.
Health insurance: The employer’s contribution is 3% of the salary. The employee’s share is typically incorporated into this, especially in the case of short-term foreign hires.
Unemployment insurance: Both employer and employee contribute 1% each.

These Vietnam social security contributions are regulated by the Vietnam Social Security authority.

Other statutory benefits in Vietnam

Vietnamese labour laws also provide several other statutory entitlements, including paid annual leave, public holidays, maternity and paternity leave, and sick leave. Notably, retirement benefits play a major role in the system.

According to Decree No. 135/2020/ND-CP, the retirement age is increasing gradually to 62 for men (by 2028) and 60 for women (by 2035). Those in hazardous roles or facing reduced work capacity may retire up to five years earlier. Conversely, individuals with high technical qualifications may retire up to five years later. A monthly pension is available to those who have met the retirement age and contributed for at least 20 years.

Those who do not meet the contribution threshold may receive a lump-sum payout instead of a monthly pension. Vietnam’s social security system ensures equal pension rates for men and women who fulfil the same requirements.

Vietnam’s veterans pension benefits

Vietnam’s veterans pension benefits fall under a separate scheme and are handled by government authorities. Veterans may be entitled to preferential pension entitlements and additional veterans social security benefits, depending on their service period, injuries sustained, and contributions to the national effort. These programmes are distinct from the general social security scheme in Vietnam and are managed by the Ministry of Labour, Invalids and Social Affairs (MOLISA).

Vietnam's employee benefits

In Vietnam, competitive employee benefits are an important part of hiring and retention strategies, especially in industries facing talent shortages. While the law mandates a range of statutory benefits, many employers go beyond the minimum by offering non-statutory perks that help boost employee satisfaction, loyalty, and productivity.

Non-statutory benefits for employees in Vietnam

Non-statutory benefits, also referred to as fringe benefits, are not legally required but are commonly provided by employers aiming to attract and retain top talent. These benefits vary widely depending on company size, industry, and workforce demographics, but certain offerings are especially prevalent.

One of the most popular perks is the 13th-month salary, often paid around the Lunar New Year (Tet). Though it is not mandatory, this bonus is widely expected by employees and serves as a strong motivator. Similarly, meal allowances are a common benefit—monthly allocations (usually non-taxable) help employees cover daily food expenses.

Transportation support is also frequently offered. This can include petrol stipends, train or bus reimbursements, or company-arranged shuttle services. While these commuting expenses are considered part of taxable income, they remain a valued form of support, especially in cities with long commutes.

To support remote or hybrid teams, some companies provide home internet coverage as part of a connectivity stipend. Like transport, these are usually taxable but help offset the costs of working from home. Others extend home office stipends to improve comfort and productivity.
Additional benefits often include:

Private health and dental insurance, which supplements the statutory health scheme.
Accident insurance for added protection.
Training and development programmes to improve skills.
Company vehicles or transport reimbursements for key personnel.
Gym memberships or wellness programmes promoting physical health.
Travel allowances for holidays or business trips.

These Vietnam employee benefits are not just incentives—they signal an investment in the well-being and long-term commitment of staff.

Benefits for foreign employees in Vietnam

Benefits for foreign employees in Vietnam often mirror those provided to local staff, but may include tailored support such as relocation allowances, accommodation stipends, and international health coverage. Employers hiring international talent often go a step further to include tax advisory services or schooling support for dependents.

Foreign workers on contracts of three months or longer are generally subject to the same benefits of employee in Vietnam in terms of social security contributions. However, employers may supplement these with enhanced non-statutory benefits to remain competitive in international recruitment.

Seamless and compliant payroll in Vietnam and beyond

Handling payroll and employee benefits in Vietnam goes beyond compliance; it is also about aligning compensation packages with local market standards. Every country also has its own customs, norms and expectations about employee compensation. If your approach does not align with what employees are used to, you might struggle to keep top talent.

When you partner with CXC to hire workers in Vietnam, we will take care of everything from tax withholding and social contributions to bonuses and benefits. This way, you do not have to worry about getting it right and you can focus on growing your business.

Read about EoR services

FAQ's

How does payroll work in Vietnam for local and foreign employees?

Payroll in Vietnam starts with gross salary, then applies personal income tax and the statutory insurance contributions that apply to the employee. The treatment is different for Vietnamese and foreign employees.

For Vietnamese employees, the standard employee deduction is 10.5% of the contribution salary: 8% social insurance, 1.5% health insurance and 1% unemployment insurance. Employers contribute 21.5% for Vietnamese employees.

Foreign employees can also fall within compulsory social insurance where they have a Vietnamese fixed-term employment contract lasting at least 12 months with an employer in Vietnam, , subject to exceptions such as qualifying intra-company transfers. Foreign workers do not generally participate in Vietnam’s unemployment insurance scheme. Covered foreign employees generally contribute 8% to compulsory social insurance and 1.5% to health insurance.

Payroll also needs to account for allowances, bonuses, overtime, leave and any taxable benefits before the employee’s net pay is calculated.

How do employers set up compliant payroll in Vietnam?

To set up payroll in Vietnam, an employer needs a local employing structure, employee tax and insurance information, the correct salary base, and registrations for social, health and unemployment insurance where applicable.

The employee’s contract should clearly state salary, allowances and other regular payments because these can affect the amount used for compulsory insurance contributions.

For Vietnamese employees, employers must also apply the correct regional minimum wage based on the location where the employer operates. Vietnam uses four wage regions rather than one national minimum salary.

Foreign employees require an additional check because compulsory insurance treatment can change based on contract duration, work-permit status and whether an exemption applies.

Once payroll is set up, employers need to calculate monthly pay, withhold PIT, make the required insurance contributions and keep the employee’s payroll records aligned with their contract.

Do employers need a legal entity to run payroll in Vietnam?

A company that employs workers directly in Vietnam normally needs a local employing structure that can register employees, run payroll and meet Vietnamese tax and insurance obligations.

A foreign company without its own Vietnamese entity cannot simply appoint a payroll processor and treat that as local employment. Payroll outsourcing handles calculations and filings, but the underlying employer still needs to exist legally.

Companies that do not want to establish a Vietnamese entity can instead use a lawfully structured local employment arrangement with a provider commonly described as an Employer of Record. The provider may become the local legal employer and run payroll, but Vietnam does not recognise EOR as a separate statutory category. The arrangement must comply with the rules applicable to its substance, including labour-subleasing restrictions where relevant.

This distinction is important because payroll in Vietnam is not only a payment function. It is tied to the employment contract, compulsory insurance and personal income tax reporting.

What statutory payroll contributions must employers pay in Vietnam?

For a Vietnamese employee, employers generally contribute 21.5% of the salary used for compulsory insurance calculations.

This comprises:

17.5% social insurance, including the applicable work-injury and occupational-disease contribution.

3% health insurance.

1% unemployment insurance.

Vietnam Social Security confirms the 21.5% employer rate for Vietnamese employees. Employers may also need to pay trade-union funding, generally calculated at 2% of the applicable contribution salary, separately from these insurance contributions.

Foreign employees are treated differently. Qualifying foreign workers generally fall within compulsory social insurance and health insurance but not unemployment insurance. Under the Social Insurance Law, the employer pays 17% compulsory social insurance for covered foreign employees, with health insurance applying separately. The employer generally also pays 0.5% for occupational accident and disease insurance and 3% for health insurance, resulting in a standard total of 20.5% where all these contributions apply. Covered foreign employees generally contribute 8% social insurance and 1.5% health insurance.

Contribution ceilings apply, so employers should not automatically apply these percentages to the employee’s full basic salary in Vietnam where earnings exceed the statutory contribution base.

How is Personal Income Tax withheld from employee salaries in Vietnam?

Employers in Vietnam calculate and withhold Personal Income Tax (PIT) from employee salaries before paying net wages.

For tax-resident employees, employment income is subject to progressive rates. For the 2026 tax year, Vietnam moved to five PIT bands ranging from 5% to 35%, with the top 35% rate applying to monthly taxable income above VND 100 million. The revised rules apply to income from salaries and wages for the 2026 tax year, although the new Personal Income Tax Law took effect generally on 1 July 2026.

The current monthly bands are:

Up to VND 10 million: 5%.

Over VND 10 million to VND 30 million: 10%.

Over VND 30 million to VND 60 million: 20%.

Over VND 60 million to VND 100 million: 30%.

Over VND 100 million: 35%.

Taxable income is calculated after applicable deductions and reliefs. For 2026, the monthly personal deduction is VND 15.5 million and the deduction for each qualifying dependant is VND 6.2 million, subject to the applicable registration and documentation requirements.

Non-resident employees are treated differently. Employment income connected with work performed in Vietnam is generally taxed at a flat 20% rate.

What statutory employee benefits must employers provide in Vietnam?

Statutory employee benefits in Vietnam include compulsory social and health insurance, paid annual leave, paid public holidays, sick-leave benefits and maternity benefits for eligible employees.

Compulsory social insurance supports benefits including sickness, maternity, workplace injury, retirement and survivor benefits. The Social Insurance Law also provides specific maternity benefits for employees who meet the qualifying contribution requirements.

Female employees are generally entitled to six months of maternity leave, with an additional month for each child from the second child onwards in a multiple birth. Eligible fathers also receive paid maternity-related leave through the social insurance system.

Employees are also entitled to statutory annual leave and paid public holidays under the Labour Code. Employers can provide additional employee benefits in Vietnam, such as private health insurance, bonuses or enhanced leave, but these sit above the statutory minimum.

What are the 2026 minimum wage rates in Vietnam by region?

From 1 January 2026, Vietnam’s monthly minimum wage ranges from VND 3.7 million to VND 5.31 million depending on the employee’s wage region.

The current rates are:

Region I: VND 5,310,000 per month, or VND 25,500 per hour.

Region II: VND 4,730,000 per month, or VND 22,700 per hour.

Region III: VND 4,140,000 per month, or VND 20,000 per hour.

Region IV: VND 3,700,000 per month, or VND 17,800 per hour.

These rates took effect under Decree 293/2025/NĐ-CP on 1 January 2026.

The applicable minimum wage in Vietnam is based on where the employer operates. If a business has branches in different wage regions, each location can have a different minimum rate.

This is why employers should check the employee’s actual work location before setting the basic salary in Vietnam.

When should companies outsource payroll in Vietnam?

Companies should consider outsourcing payroll in Vietnam when they do not have local expertise in Vietnamese PIT, compulsory insurance and regional wage requirements, or when they are managing payroll across several countries.

Outsourcing can be particularly useful for companies with a mix of Vietnamese and foreign employees because their insurance treatment is not identical. Foreign employees may need social and health insurance but are generally outside unemployment insurance, while local employees are covered by all three schemes.

It can also help when salaries include bonuses, allowances, overtime or other payments that affect tax or the insurance contribution base.

For international HR and finance teams, outsourcing removes the need to keep up with local payroll changes internally while still allowing the company to control salary and compensation decisions.

How much does payroll administration cost in Vietnam?

Outsourced payroll in Vietnam commonly costs around VND 250,000 to VND 900,000 per employee per month, or roughly USD 10 to USD 35, for standard payroll administration.

The fee usually varies based on headcount, the complexity of the payroll and whether the service includes social insurance, PIT filings, employee payments or additional reporting.

Smaller workforces may also face a minimum monthly fee, while foreign employees or more complex compensation arrangements can cost more to administer.

The payroll service fee is separate from the employee’s salary and statutory employer contributions. For a Vietnamese employee, the employer should still budget for the applicable compulsory insurance costs on top of gross salary.

For comparisons, ask providers to separate the payroll administration fee from salaries, taxes and statutory employment costs.

How does CXC ensure employees are paid accurately and compliantly in Vietnam?

CXC combines local Vietnam payroll support with global payroll capability, helping companies manage employee payments, statutory deductions and local requirements without building a separate payroll operation in each market.

For Vietnam, our payroll support can account for local requirements such as compulsory insurance, Personal Income Tax, regional minimum wages and the different treatment of Vietnamese and foreign employees.

CXC can also support companies paying teams across multiple countries. Workers can be paid locally while HR and finance teams manage payroll through one workforce partner rather than appointing a different provider in every market.

This is particularly useful for businesses hiring in Vietnam as part of a wider APAC or international workforce, where payroll needs to stay local but reporting and workforce administration need to remain manageable across countries.

Speak to our team to learn more about payroll in Vietnam with CXC.

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