Vietnam is a country in southeast Asia bordered by China, Laos, and Cambodia. The country is divided into the highlands and Hong River Delta in the north, the Annamite Range and coastal lowlands in the center, and the Mekong Delta in the south.

Vietnam is considered a developing country and one of the fastest growing economies of the 21st century.

Types of Contracts

• Fixed-Term Contract (from 3 to 36 months)
• Indefinite
• Part-time contracts are possible (e.g. a 24-hour week) for both fixed-term and indefinite contracts, and follow the same rules governing entitlements, social security contributions etc.

Working Hours

The standard working hours in Vietnam are 8 hours per day, 48 hours per week. If an employee works beyond the maximum of 48 hours, they will be paid overtime as follows:

• op of theRegular days: an additional 50% of salary
• Weekends: an additional 100% of salary
• Holidays: an additional 200% of salary
• Night shifts (10 pm-6 am): an additional 30% on the top of regular shift rate.
• For overtime on a night shift, an additional 20% on top of the regular overtime rate (and night shift)
• Overtime cannot exceed 50% of normal daily working hours (i.e., max 4 extra hours on an 8-hour day), and total work (regular + overtime) must not exceed 12 hours/day, 40 hours per month, 200 hours per year.

Minimum Wage

Vietnam has 2 types of minimum wages: National and Regional

National minimum wage: The minimum wage in Vietnam is currently VND 2,340,000, effective 1 July 2024.

Regional minimum wages: For employees without professional training, the wages are as follows:

• Region I (e.g., Hanoi, Ho Chi Minh City): 4,960,000 VND/Month

• Region II (e.g., Da Nang, Hai Phong): 4,410,000 VND/Month

• Region III (e.g., Vinh, Quang Ngai): 3,860,000 VND/Month

• Region IV (e.g., rural and remote areas like Bac Kan, Lai Chau): 3,450,000 VND/Month

Current minimum wages apply equally, regardless of training level. The last update was July 2024; the next planned increase is under discussion for Jan 2026.

Region definitions

1. Region I: Including cities, districts, and towns with developed economies(such as Hanoi, HCMC, and the central cities of provinces/prefecture)
2. Regions II: Including districts, provinces, and suburban cities with relatively developed economies (2-ranked cities of the province or prefecture).
3. Region III: Including districts and towns, with a decent economic level but lower than in Region II.
4. Region IV: Including districts and towns with undeveloped, difficult, and extremely difficult economies (remaining regions and areas)

Probation Period

Probation in Vietnam is regulated by the Vietnam Labour Law and depends on the Job/Qualification level.

• Enterprise executive (as defined under relevant enterprise/state investment laws)- 180 days maximum.
• Positions requiring a college degree or higher (professional & technical qualifications at this level)- 60 days maximum.
• Positions requiring intermediate vocational/secondary vocational certificate; technical workers; skilled staff- 30 days maximum.

All terms depend on agreements between the employee and the employer. During probation, there is no mandatory notice period, and there is no notice given unless agreed upon in the contract. In Vietnam, the employer cannot extend the probationary period. At the end of the period, the employer must notify the employee whether the probation has been passed. If passed, convert to a full labour contract or continue as agreed. If not, the contract ends.

13th Month Salary

In Vietnam, it’s common to pay employees a 13th-month salary, but it's not mandatory. It is widely practised. Many companies offer it, especially around Tet (Lunar New Year) or the end of the calendar year.

The amount paid is equivalent to 1 month of basic salary. If paid on a calendar-year basis and the employee has completed less than 12 months of service, the amount distributed is based on the number of months worked. The 13th-month salary is liable to personal income tax under Vietnamese law. But it is not included in calculating social insurance contributions.

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Taxes & Local Employment Costs

Probation contracts are covered under labour law if the contract is ≥1 month; many social insurance contributions begin once the employee is under a valid labour contract. Recent laws (2024-SI Law, Employment Law 2025) clarify that for private employees under contracts of 1 month or more, social insurance, health insurance, UI, etc., apply.

Labour law in Vietnam.

Employee Taxes

Income tax is based on the employee’s taxable income (gross salary minus deductions based on personal circumstances). Progressive tax bands range from 5% to 35%.

In addition to income tax, the employee must contribute to the following social security insurances from their salary:

• Social insurance: 8% of gross salary, capped at 20 times the national minimum wage (VND 2,340,000/month)
• Medical Insurance: 1.5% of gross salary, capped at 20 times the national minimum wage (VND 2,340,000/month)
• Unemployment Insurance: 1% of gross salary, capped at 20 times the regional minimum wage (VND 4,680,000/month with our local partner

Employer Taxes & Contributions

• Social Insurance (retirement & death): 14% of gross salary, capped at 20 times the national minimum wage (VND 2,340,000/month)
• Sickness & Maternity Insurance: 3% of gross salary, capped at 20 times the national minimum wage (VND 2,340,000/month)*
• Work Accident Insurance: 0.5% of gross salary, capped at 20 times the national minimum wage (VND 2,340,000/month)*
• Health Insurance (HI): 3%: HI contribution bases are capped at 20 times the national minimum wage (VND 2,340,000/month)
• Unemployment Insurance: 1% of gross salary, capped at 20 times the regional minimum wage (VND 4,680,000/month with our local partner)
• Labour Union Fee: 2% of gross salary, capped at 20 times the national minimum wage (VND 2,340,000/month)
• Health Check: Once a year, with the cost varying according to the employer’s choice of contribution (typically around USD 100)

*Note that these are often rolled up into social insurance for a total of 17.5%.

Total employer cost: approx 21.5% of gross salary (excluding non-standard costs like health checks). With union fee added, the total becomes about 23.5% of gross salary.

Annual Leave

Law requires at least 12 working days of paid annual leave per year for employees under “normal conditions.” For employees working less than a full year with the employer, leave is prorated by months of service

Sick Leave

Employers are not required to pay for sick leave in Vietnam. Social and medical insurance usually covers the necessary payment for sick leave. However, some companies may add sick leave as an additional benefit

In order to claim social insurance for sick leave, employees have to show official documentation from a doctor as proof.

The sick leave maximum days per year remain tied to years of social insurance contribution and working conditions. For employees under normal conditions: 30 / 40 / 60 working days depending on whether <15, 15-30, ≥30 years of contribution.

Long-term illness regime: Formerly allowed up to 180 days; after July 1, 2025, it is restricted to specific diseases on the Ministry’s list; the general automatic 180-day entitlement is removed. Benefit level generally ~75% of insurance salary for sick leave; lower rates or conditions for continuation after exceeding max, etc.

Maternity Leave

Pre-birth Leave

In the case of female employees with prenatal care, they are entitled to take leave from work to go to prenatal care 5 times, 1 day each time.

(If the employee is far from the medical examination and treatment facility or the pregnant woman has a medical condition or an abnormal pregnancy, she is entitled to 2 days off for each prenatal check-up.)

Post-birth Leave

The mother is entitled to 6 months of leave, though she can voluntarily come back to work after 4 months. This cannot be enforced by the employer.

During this leave, the government pays approximately 100% of the salary used to contribute to social security over the previous 6 months (see Taxes and Contributions for more information). Under Vietnam’s Health Insurance Law, insured employees generally have 80% of medical costs covered (sometimes 95% or 100% depending on category/condition). This is part of health insurance benefits, not a maternity-specific rule.

The law grants an additional 1 month (30 days) leave per additional child from the second onward. If giving birth by surgery or multiple births, +14 working days per case.

The Labour Code prohibits the dismissal/unilateral termination of female employees who are pregnant, on maternity leave, or raising a child under 12 months.

Paternity Leave

Employees are entitled to the following leave after becoming a father:

• 5 working days with a normal birth of 1 child.
• 7 working days when the wife gives birth to a child requiring surgery or gives birth to a child under 32 weeks old;
• 10 working days for twins
• For 3+ births, each additional child increases the entitlement by an additional 3 working days, up to a maximum of 14 working days.
• Under the new Social Insurance Law (2024, effective 1 July 2025), the window has expanded to 60 days from the date of delivery, in which paternity leave can begin.

Public Holidays

Public Holidays 2025. If public holidays fall on a weekend, the following working day(s) will be given as time off.

• 1st Jan to 2nd Jan 2025: New Year’s Day 2025
• Jan 25 – Feb 2: Lunar New Year (Tet) 2025
• April 7 2025: Hùng Kings Commemoration Day
• 30th April 2025 to May 2 2025: Liberation Day and International Labour Day
• 1st Sep to 3rd Sep 2025: Vietnam's Independence Day.

Benefits

Summary

Employers in Vietnam can typically offer the following benefits:

• Medical Insurance
• 13th-month salary
• Expense allowances (phone, internet, meals, uniform, transportation) - considered taxable

Private Pension

Employees do not typically contribute towards their own retirement schemes in Vietnam, as there is a comprehensive state-run retirement scheme.

Notice Period

During probation, either party can terminate (cancel) the probation or the employment contract without prior notice or compensation.

For fixed-term contracts, if the contract is due to expire, the employer should announce this 15 days before the end date. The law provides that when a fixed-term contract expires and the worker continues to work, the contract must be renewed or a new contract concluded within 30 days; if not renewed after these 30 days, the fixed-term contract may convert into an indefinite-term contract.

For termination before the contract end date, the employer must show evidence for a reason for termination, such as:

• The person cannot do the job, causing loss/damage for the company as stipulated in the registered Internal Regulations recognised by the law.
• The person commits a crime.
• The person resigns.
• The company has an organisational structure change, a case of unforeseen circumstances that prevents fulfilment of the contract, or bankruptcy.

For fixed-term contracts terminated before the end date, the employer must give notice of termination at least 30 days. For indefinite contracts, the employer must give a notice of at least 45 days. If a female employee has a child less than 1 year of age, their contract cannot be terminated.

Statutory Payments

Law requires employers to pay out unused annual leave when employment ends / when the employee is laid off / job is lost. The base for the payment is the salary in the month immediately prior to termination. When an employment contract ends (resignation, lay-off, etc.), the employer must pay the employee for any unused annual leave (according to contract/preceding month’s salary) within 14 working days (or up to 30 in certain cases)

If the employer illegally terminates the contract unilaterally, the employee may seek reinstatement; meanwhile, the employer must pay salary + insurance contributions for the period of wrongful dismissal, plus at least 2 months’ salary

While not mandatory, it is customary in Vietnam to pay a 13th-month salary bonus for the Lunar New Year or the end of the year.