How to Hire Employees in Vietnam (2026) — Employer & HR Guide
Hiring in Vietnam means navigating the Labor Code, mandatory social insurance, payroll and personal income tax, and — for foreign staff — work permits. This guide walks employers through compliant contracts, contributions, work permits, and the Employer-of-Record option for hiring without a local entity. It's an orientation, not legal advice — engage Vietnamese counsel or a payroll provider before hiring.
Step-by-step
- 1
Decide how you will employ
Hire through your own Vietnamese entity, or use an Employer of Record (EOR) / staffing partner if you have no local entity yet. An EOR lets you employ legally and quickly while you decide whether to incorporate.
- 2
Use compliant labor contracts
Vietnamese law recognizes definite-term and indefinite-term contracts, with rules on probation and renewals. Put role, salary, working hours, and terms in writing in line with the Labor Code.
- 3
Register and pay mandatory insurance
Employers must contribute to social insurance, health insurance, and unemployment insurance for eligible employees, with both employer and employee portions. Register with the social insurance authority and remit on schedule.
- 4
Run compliant payroll and PIT
Withhold and remit personal income tax (PIT) on a progressive scale, handle deductions, and pay salaries in Vietnamese dong. Keep records and issue payslips; most foreign employers use a local payroll provider.
- 5
Handle work permits for foreigners
Foreign hires generally need a work permit (or an exemption) plus an appropriate visa/temporary residence card. Plan lead time for documents, and confirm the role qualifies under work-permit rules.
- 6
Respect probation, leave, and working time
Observe statutory limits on probation length, standard working hours and overtime, annual leave, public holidays, and Tet bonus expectations. These materially affect cost and retention.
- 7
Manage termination carefully
Termination is regulated — valid grounds, notice periods, and severance can apply. Document performance and follow the Labor Code to avoid disputes; take local legal advice for dismissals.
What a hire actually costs
Budget beyond the headline salary: employer compulsory insurance adds about 21.5% on top of the gross (social, health and unemployment), while the employee has 10.5% withheld and pays progressive income tax. To size both the employer cost and the employee's net take-home from a gross salary, use the Vietnam hiring-cost calculator.
Entity vs Employer of Record
If you've already incorporated (see how to register a company in Vietnam), you can employ directly. If not, an Employer of Record lets you hire compliantly while you validate the market — a common path for foreign employers and SMEs testing Vietnam before committing to a full entity.
The compulsory-insurance bill, line by line
On top of the gross salary the employer pays 21.5% in compulsory insurance and the employee has 10.5% withheld. The chart splits both sides by insurance type.
- Gross salary
- Pension & death
- Sickness & maternity
- Work accident
- Health
- Unemployment
- Employee receives (before income tax)
Employer total 21.5%, employee total 10.5%. The rates shown are for Vietnamese employees; unemployment insurance is not collected for foreign employees. Some summaries add a 2% trade-union fee for employers (about 23.5% in total) that our hiring-cost calculator does not include, so confirm whether it applies to you. · Source: EY Vietnam People Advisory alert (June 2025) on the social insurance law effective 1 July 2025
Illustrative example: a 30,000,000₫ monthly gross salary for a Vietnamese employee
- Employer insurance (21.5%): 6,450,000₫ — total employer cost before any union fee or benefits 36,450,000₫
- Employee insurance (10.5%): 3,150,000₫ — take-home before personal income tax 26,850,000₫
The salary is an assumption chosen for illustration. Insurance is calculated up to caps, so contributions on very high salaries are capped: VND 50,600,000 a month for social and health insurance (20 × the statutory base salary of VND 2,530,000 from 1 July 2026) and VND 106,200,000 for unemployment insurance (20 × the Region I minimum wage), the figures used in our calculator and the regulation tracker. Use the hiring-cost calculator for your own numbers and the tax guide for the 2026 personal-income-tax deductions.
From offer to first payroll
-
Choose the employing entity
YouEmploy through your own Vietnamese company, or through an Employer of Record while you validate the market. Get quotes: EOR fees were not available from the sources we reviewed.
Gate: Whoever employs must be registered to pay insurance and tax in Vietnam.
-
Sign a compliant written contract
EmployerDefinite-term or indefinite-term, with role, pay, hours, probation and notice terms in writing under the Labour Code.
Gate: Probation length and pay respect the caps below (as summarised by law firms; verify in the Code).
-
Register for compulsory insurance
EmployerRegister the employee and remit employer and employee contributions on schedule.
Gate: Contributions are based on the insured salary, not just the base pay line.
-
Run payroll and withhold income tax
Employer / payroll providerWithhold personal income tax under the 2026 bands and deductions, deduct the employee insurance share, pay net salary in dong.
Gate: Pay at or above the regional minimum wage for the workplace.
-
Handle foreign staff separately
EmployerForeign hires need a work permit or exemption and a residence card before they start.
Gate: See the work-permit guide; no work before the permit is issued.
Steps summarised from the Labour Code as described by adviser guides; confirm current rules with counsel or a payroll provider.
Labour Code rules that drive cost and risk
| Topic | Rule as summarised by law-firm sources (not verified against the Code text) |
|---|---|
| Probation | Capped by role: up to 60 days for degree-level and professional roles, up to 180 days for enterprise managers. Pay during probation must be at least 85% of the agreed salary (reported). |
| Notice | Employee resignation notice, as reported by several law firms: at least 45 days for an indefinite-term contract, 30 days for a fixed-term contract of 12 to 36 months, and 3 working days for a fixed-term contract under 12 months. Longer periods are reported for certain sectors set by government decree; employers' notice duties differ. |
| Severance | Half a month's salary for each year of work for employees with 12 months or more of service (time covered by unemployment insurance is deducted). A separate job-loss allowance is reported for redundancies: one month per year of service, minimum two months (confirm which employees it covers). |
| Annual leave | 12 working days a year. Summaries disagree on whether it accrues from the start of work or after probation. |
| Public holidays | About 11 paid public-holiday days a year in one summary; the Tet block varies by year. |
Labour Code 45/2019 as summarised by RemotePass, Teamed, Tilleke & Gibbins and Letran Law. We found no 2026 amendment to the Code itself, but payroll rules changed (insurance cap from 1 July 2026, new PIT bands). Verify each rule in the current text before drafting a contract.
Hiring readiness checklist
Before the offer
- Employing entity (own company or EOR) chosen and quoted
- Salary at or above the regional minimum wage
- Total employer cost modelled with insurance and any union fee
Contract and compliance
- Written contract with probation within the cap
- Insurance registration completed before the first payday
- Payroll provider set up for PIT under the 2026 rules
Foreign hires and exit
- Work permit or exemption in hand before work starts
- Residence card and renewal dates in the calendar
- Termination steps and severance exposure reviewed with counsel
Frequently Asked Questions
How do I hire employees in Vietnam without a local entity?
Use an Employer of Record (EOR) or a licensed staffing/outsourcing partner. The EOR legally employs the worker on your behalf in Vietnam — handling contracts, social insurance, payroll, and tax — while the person works for you. It's the fastest compliant way to hire before (or instead of) incorporating a Vietnamese entity.
What are mandatory employer contributions in Vietnam?
Employers must contribute to social insurance, health insurance, and unemployment insurance for eligible employees, alongside employee-side contributions. There are also personal income tax (PIT) withholding obligations. Rates and caps are set by regulation, so confirm current percentages with a payroll provider or the social insurance authority.
Do foreigners need a work permit to work in Vietnam?
Generally yes. Most foreign employees need a work permit (or a formal exemption) plus an appropriate visa or temporary residence card. The employer typically sponsors the permit, and the role must meet eligibility criteria. Build in lead time for document legalization and approvals.
What types of employment contracts are used in Vietnam?
The Labor Code primarily recognizes indefinite-term contracts and definite-term contracts, with rules governing probation periods and how many times a fixed-term contract can be renewed before it effectively becomes indefinite. Contracts should be in writing and specify role, pay, hours, and conditions.
How does payroll and income tax work for employees in Vietnam?
Employers withhold personal income tax (PIT) on a progressive scale, deduct employee social/health/unemployment insurance contributions, and pay net salary in Vietnamese dong. Employers remit taxes and contributions to the authorities on schedule and keep payroll records. Many foreign companies outsource payroll to ensure compliance.
Sources
- Insurance rates: EY Vietnam People Advisory Services tax alert (June 2025); RemotePass and Slasify employer guides
- Minimum wage: Baker McKenzie (March 2026), Vietnam Briefing and ASEAN Briefing on Decree 293/2025/ND-CP
- Labour Code 45/2019 rules: RemotePass, Teamed, Tilleke & Gibbins, Letran Law, BIPO — adviser summaries, not the code text
Commercial and law-firm guides; confirm current percentages, caps and thresholds with a payroll provider or the social insurance authority. Not legal advice.