Employer of Record(EOR) in Vietnam

Employer of Record(EOR) in Vietnam

Vietnam Workforce Unlocked: How Employer of Record Makes Hiring Easy

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At a Glance

Capital City
Hanoi
ChaadHR entity
Own Entity
Languages
Vietnamese

Pricing

Hire employees
$299.00 / month
Hire contractors
$49.00 / month

Overview

Vietnam is known for scenic beaches, spectacular landscapes, rice terraces, and beguiling cities. The country's major economic contributor is the services sector, occupying 41.63% of their GDP. Vietnam holds the position of 18th among 39 countries in the Asia–Pacific region for its economic development.

Major Economic Hubs:

Hanoi, Ho Chi Minh City, Hoi An, Ha Long

Skills in Demand:

Data Analysts And Scientists, Software Engineers, Finance And Banking

Public and Provincial Holidays

Employee Leaves

Taxes

Resident Tax Information

All residents and non-residents in Vietnam are subject to Personal Income Tax.  

Personal income tax for residents in Vietnam is progressive up to 35%. The tax on nonresidents is at a flat rate of 20%.  

It is mandatory for individuals to self-declare and pay income taxes. Personal income tax  rates in Vietnam are as below:

Social Security

Vietnam has three obligatory social security systems:

  • Unemployment insurance
  • Social insurance
  • Health insurance

Employers must enroll their employees in Vietnam’s social security system after signing an  employment contract. However, the employment contract must be for an indefinite term,  i.e., exceeding 3 months.  

Employers must consider that social and unemployment insurance are currently applicable  only to employees residing in Vietnam. In contrast, health insurance must be provided to  both Vietnamese and foreign employees with whom a Vietnamese employment contract is  signed. Although, this provision does not apply to employees working overseas and then  posted to Vietnam. To enroll an employee with health insurance under Vietnamese social  security, an employer must have a valid employment contract.  

However, from 1 January 2018, if a foreigner has a work permit or other appropriate  certifications from the authorities, they will join the social insurance program.  

The employer and the employee's contribution toward Vietnamese social security are  calculated on an employee's base salary plus other monthly fixed allowances. There is no  cap or maximum to the contributions

All employees, including foreign employees who have worked in Vietnam for over six  months, must participate in the social security program.  

Contributions to social security in Vietnam are as below

ld-age allowance

Employees eligible for old age allowance include

  • Female employees above 55 years old
  • Male employees above 60 years old

However, individuals paying towards social insurance for more than 20 years are eligible to  

get an old-age allowance. Employees who do not are eligible for a lower old-age allowance  provided they meet secondary requirements as laid by provisions under Vietnamese social  security

The monthly old-age allowance is calculated according  

  • To the social insurance payment duration
  • The average monthly salary

The monthly maximum payment amount for the old-age allowance is 75% of the average  salary stipulated by the government. In contrast, the minimum payment amount for the  old-age allowance is the minimum salary standard set by the government.    

Male employees whose payment period for social insurance exceeds 30 years and female  employees, 25 years, are entitled to 0.5% of the average salary multiplied by the old-age  allowance for the extra contribution years. For example, the old-age allowance for a male  employee who retires after working for 34 years is 0.5% of the average salary * four years.

Health Insurance Clause:
  • According to Vietnam Labour law, Article 21, the employers must organize the following: Health check up for the employees performing toxic, heavy, hazardous  
  • work/occupations or extremely heavy, hazardous atleast once in a year.
  • Health check up twice in a year or one in six months for disabled, elderly or minor  employees.
  • Female workers must be provided with obstetric care and must receive occupational  disease test if there are factors likely to cause occupational diseases.
  • Health check up assigning or moving them to heavier, more hazardous, more toxic jobs  and also to conduct a test after they return. Unless, there are conclusions of the  Medical Assessment Council on the decrease of their work ability. 
  

Fail to provide the above, the employer shall be fined from VND 1,000,000 to VND  3,000,000 per each employee, but not exceeding VND 75,000,000.

Statutory Benefits

As per employment law in Vietnam, there are a few statutory benefits entitled to the  

employees in Vietnam. These benefits include

Health insurance

All employers must provide insurance for all employees. The labor law prescribes three major types of insurance that include

  • Unemployment insurance
  • Social insurance
  • Health insurance
Pension

Employers in Vietnam must contribute towards retirement benefits, especially pensions.  

Employers must do this through the state pension scheme called social and private life  

insurance. The Social Insurance Agency (SIA) administers the state pension scheme.

13th-month-salary

In Vietnam, it is customary to pay a 13th-month salary at the Lunar New Year or the end of the year.

Fringe Benefits

In Viet Nam, fringes benefits are given to employees. These can be either monetary or non-monetary depending on the business requirements and budgets set for providing them as well as what goals one might want their company reach through this practice of offering perks that help attract quality staff members who will work hard towards achieving those objectives.

  • Housing benefits
  • 13th-month pay
  • Gym membership
  • Meal vouchers
  • Additional paid
 time off
  • Flexible working hours
  • Company vehicle
  • Commuting expenses

Exempt Benefits

Employers provide fringe benefits as a part of an employee's salary to process payroll.  

Although employers don't need to provide fringe benefits as a part of their compensation  in Vietnam, it is a solution commonly used to incentivize their employees.  

Companies in Vietnam provide benefits that consist of in-kind compensation and flexible  work agreements.  

Companies know that incentivizing their employees is not always paying more but paying  better. In this regard, companies established in Vietnam use different types of in-kind  elements as a part of employees’ compensation to cater to every employee’s needs. In  Vietnam, employers and payroll policies have favorable tax treatment that focuses on  increasing the net salaried employees receive.

Although a few fringe benefits are exempt, these include

  • Training programs
  • Office set up
  • Company vehicles for senior executives
  • Transport vouchers for regular employees
  • Meal vouchers
  • Accident & dental insurance

Employers in Vietnam also offer private health insurance that includes private insurance plans, group insurance plans, accident & dental covers, etc. as a part of their employees’ compensation. This is because of the following reasons:

  • Insurance coverage boosts talent retention strategies and keeps the organization competitive in the industry
  • Productivity and morale surge when the health of the employees is secured by the  organization
  • Welfare benefits to the employees make them feel valued and send a positive signal
  • Lower staff turnover is significantly improved with better health coverages

Long-term Incentives

The mandatory long-term incentives listed in the above sections include best market practice benefits or benefits provided in collective bargaining agreements.  

Long-term benefits are offered to executives at this position or employees with exceptional talent, while their compensation may be too massive to be delivered in cash.  It is common for employees who hold strategic management positions (such as members of the board of directors, executive officers, non-statutory officers, general managers, and high-level managers) and non-employed statutory officers to participate in an employee share plan.  

Long-term incentives provided to employees and senior executives in Vietnam are stock options. The most commonly provided stock options include

  • Real equity
  • Full value
  • Phantom equity  

Vehicle types commonly used when providing stock options include

  • Appreciation only
  • Cash-based equity plan

Lastly, long-term incentive plans can be customized as per business requirements and the  company's budget to measure and motivate the performance goals, objectives, and  outcomes most strongly connected to a company’s long-term success. Regardless of a  company’s size, ownership, or stage in its lifecycle, a long-term incentive plan can be  designed to address all relevant facts and circumstances.  

The immediate increase in targeted compensation (while saving on short-term cash flow), multi-year retention, and connection to long-term value drivers make long-term incentives interesting. These are attractive options for all organizations as they enter an uncertain  landscape.

Termination/Severance in Viet Nam

Termination Process

The termination process would include a reasonable notice period to be given by either of the terminating party. Some instances, such as enterprise operation cessation, do not need a filing. Below are some other requirements base on the reason for dismissal

Notice Period

Vietnamese employees that are under their probationary period are to observe a notice period of up to 30 days when terminating their contract. For employees after their probationary period, the notice period will be up to 45 days.

Severance Pay

The severance allowance of 1/2 month worth of salary for each year of employment.

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With our Employer of Record(EOR) network you don't need to set up entities to hire full-time talent abroad. We help you hire in 150+ countries and ensure 100% compliance with local laws.

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Handle taxes, social contributions
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We take care of all the details to make sure you comply with local laws, including those related to taxes, social security, the minimum salary, termination regulations, and more.

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“ChaadHR is like a global-hiring specialist sitting by our side, and makes hiring globally as smooth as hiring on our local sites. We hire people, present requirements, and ChaadHR covers everything else.”

Yuki Akiyama
HR Director, Bimgoo

“Hiring compliance is always a complicated issue during global hiring. ChaadHR optimized this problem transparently and thoroughly. We no need to worry furthermore, and our employees and contractors also feel comfortable and give us positive feedback about ChaadHR."

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Hiring Manager, Wimton Logistics
PRICING PLAN

Pick plan that best suits your needs

Contractor
$ 49.00 USD
/mo
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per month, per contractor
Compliant contracts for 150+ countries
Free local payments in 70+ currencies
Manage payroll, compliance and onboarding, all in one place
International payments at low cost
Employee
$ 299.00 USD
/mo
Get started
per month, per employee
Leverage our EOR, Hire employee in 150+ countries.
Local tax, employment, accounting and legal expertise
Offer local benefits
24/7 customer service
Global Payroll
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Multi-country payroll in countries where you have entities
Streamline your global payroll processing
Ensure compliance with the latest local wage regulations
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Reduce costs by centralizing payroll management
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Dedicated to supporting the employment of employees in multiple countries simultaneously
Professional technical support team
Free consultations with our in-house HR and legal experts
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