Employment and labor laws vary from country to country. This guide is intended to provide the most up to date information available. We will update this guide as needed when changes are made to the laws.
Employment Contracts
Employers are legally required to provide formal written contracts for all employees that include salary/wage, termination terms, job title, etc. The contracts must be written in Vietnamese and use the Vietnamese Dong currency (VND).
Working Hours
In Vietnam, working hours must not exceed 8 hours a day or 48 hours per week.
Overtime
Work that exceeds the standard weekly working hours is optionally paid as overtime and is regulated by the employment contract or collective agreements. Overtime hours cannot exceed 50.00% of the total hours worked, 30 hours per month, or 200 hours per year.
Overtime pay is calculated at 150.00% on weekdays and increases to 200.00% for weekend overtime. Overtime worked during a public holiday is to be paid at 300.00% of the regular salary rate.
Public Holidays
Vietnam has 13 public holidays. Holidays falling on weekends are moved to the next working day. In addition to these public holidays, an expatriate employee is also entitled to one day off for the traditional new year and another day for the national day of his or her country.
For the year 2022:
- Jan 1: New Year’s Day
- Jan 3: Vietnamese New Year’s (Tet)
- Jan 31: Vietnamese New Year’s (Tet)
- Feb 1: Vietnamese New Year’s (Tet)
- Feb 2: Vietnamese New Year’s (Tet)
- Feb 3: Vietnamese New Year’s (Tet)
- Feb 4: Vietnamese New Year’s (Tet)
- Apr 10: Hung Kings Commemoration Day
- Apr 11: Day in lieu of Hung Kings Temple Festival
- Apr 30: Reunification Day
- May 1: Labor Day
- May 3: Day in lieu of Labor Day
- Spe 1: Independence Day
- Spe 2: Independence Day
Paid Time Off Mandatory Vacations
Paid leave in Vietnam is set in the employment contract as a minimum of 12 days paid leave a year, in addition to any public holidays. This increases by one day for every five years of completed service.
Sick Leave
All employees are entitled to up to 30 days of paid sick leave per year, increasing to 60 days in exceptional circumstances. Sick leave is paid by the Social Insurance Authority.
The social insurance fund pays the sick pay at 75.00% of the salary rate, based on the salary received in the month preceding the sickness absence.
All employees must provide a medical certificate within 48 hours of the first day of sickness.
Maternity and Paternity
Maternity Leave
A pregnant employee is entitled to 6 months of maternity leave, potentially increasing to 7 months for complicated/multiple births.
The maternity payment is paid by the Social Insurance Authority at a rate of 100.00% of the salary received in the month preceding the start of the maternity absence.
The new Labor Code stipulates that a female employee is entitled during her menstruation to a fully paid break of 30 minutes every day (for at least three working days in a month), and during the period of nursing, a child under 12 months is entitled to a fully paid break of 60 minutes every day during her working hours. However, Decree 145 states that where a female employee does not wish to take these breaks and the employer agrees for her to continue working, then the employee must be paid an additional salary according to the work that the employee has carried out during the time of the break.
Paternity Leave
New fathers are entitled to between 5 and 14 days paid paternity leave.
The leave is paid by the Social Insurance Authority at a rate of 100.00% of the salary received in the month preceding the start of the paternity absence.
Parental Leave
Parental leave in Vietnam is available for childcare and entitles employees to up to 20 days parental leave per year until the child reaches the age of 3 and thereafter up to 15 days per year until the child reaches the age of 7. The childcare leave is paid by the Social Insurance Authority at the rate of 75.00% of the employees’ salary in the month preceding the start of the leave.
Other Leave
Depending on the contract, employees may be allowed additional leave types, once approved between the employer and employee for the following:
- Bereavement: employees are entitled to 3 days of paid leave for the death of a family member.
- Marriage: Employees are entitled to up to 3 days in case of marriage and one day for a child’s marriage.
Employee Severance and Terminations
Termination Process
The termination process is standard in Vietnam and is based on the Labor Law requirements unless an employer can provide sufficient cause for dismissal without notice (due to misconduct, etc.)
Notice of termination must be in writing and sent to the relevant governmental authorities.
Upon termination of the labor contract, all employees are entitled to:
- receive the rest of the salary for the days worked in that month.
- an allowance when they leave the job due to termination of labor contract because of changes in structure, technology or economic reasons, division, separation, consolidation, or merger; sale, lease, conversion of types; transfer of ownership, right to use property and have worked regularly for the employer for one year or more.
- any untaken leave (pro-rata) entitled.
The employer is also responsible for paying the rest of the salary within 14 working days from the date of termination of the labor contract (Article 48 of the Labor Code 2019). This period may be extended but it shall not exceed 30 days.
The employer must provide copies of documents relevant to the process of the employee’s job if the employee so requests and pay the costs of copying and sending such documents, together with notice of terminations sent to the relevant governmental authorities.
Notice Period
Notice periods within Vietnam are generally between 30 and 45 days, but differ based on the type of contract:
- 3 working days for the seasonal contract (contract of less than one year);
- 30 days for a definite labor contract (between 1-3 years)
- 45 days for an indefinite labor contract.
Severance Pay
In Vietnam, severance pay is mandatory if applicable and determined by the employee’s contract terms and length of service.
Statutory severance pay is calculated at 50.00% of an employee’s regular monthly salary rate for each year of service. However, suppose the severance payment is due to changes in the company structure, technology, or economic reasons. In that case, the severance pay is calculated at one month’s salary for each year of service.
In addition, should an employee terminate their employment before being eligible for pension, they are to receive a severance allowance.
Probation Period
For permanent employees, the probation period in Vietnam is generally based on the complexity and skill required to do the role and varies between 6 to 60 days. The wage for an employee during the probation period must be agreed upon in writing but cannot be less than 85.00% of the full-time permanent salary for the role.
Employees working under seasonal labor contracts are not subject to probation.
Payroll Cycle
The payroll cycle in Vietnam is generally monthly and is usually paid on the last working day, or as agreed within the employment contract.
In Vietnam, the statutory minimum wage is set per region/zone as designated by the Government. For example, Zone 1 covers areas including urban areas of Hanoi, Ho Chi Minh City, and Hai Phong, along with some industrial regions of Binh Duong and Dong Nai.
Minimum wages per zone are as follows:
- Zone 1: 4,420,000 VND
- Zone 2: 3,920,000 VND
- Zone 3: 3,430,000 VND
- Zone 4: 3,070,000 VND.
13th Salary
In Vietnam, it is customary to pay a 13th-month salary at the Lunar New Year or the end of the year.
Income Tax
VISA
Foreign nationals typically require a work permit before entering Vietnam to take up employment. The Vietnamese work permit is a legal document authorizing the person to engage in employment and receive compensation from a company in Vietnam.
However, a foreigner may work in Vietnam without a work permit but a work permit exemption certificate in certain circumstances. This certificate is equivalent to the work permit, valid for up to 2 years, and serves as a basis for applying for a temporary residence card.
VAT
VAT is a 10% standard rate. (There is a 2% VAT reduction for goods and services which are currently subject to 10% VAT from 1 February to 31 December 2022, except for certain goods and services, e.g., telecommunications, IT services; finance and banking services, securities, insurance; real estate business; metal production and manufacture of prefabricated metal products; etc.)