What you'll learn
- Country Introduction
- Tax Breakdown for Employers
- Statutory Leave Laws
- Minimum Wage and Working Hours
- Termination Process
- Additional Information
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.
Paid Leave and Statutory Leave
Parental Leave
Pregnant employees are entitled to 6 months of maternity leave, paid at 100% of the full salary by social insurance. New fathers can receive between 5-14 days of paid paternity leave.
Vietnam has parental leave that entitles employees to 20 days of parental leave per year before the child turns 3, and up to 15 days per year before the child turns 7. This leave is paid by social insurance at 75% of the regular salary.
Sick Leave
Employees are can receive up to 30 days of paid sick leave each year, increasing to 60 days for exceptional circumstances. This leave is paid by social insurance at around 75% of the regular salary.
Paid Leave
Vietnam has 13 public holidays, and employees can receive 12 days of paid time off each year. The amount increases by 1 day every 5 years of employment. Employees can also take leave for bereavement or marriage.
Wage Requirements and Working Hours
The minimum wage varies in Vietnam, but the average is VND 4,680,000 per month. A standard workweek is 48 hours at 8 hours per day. Overtime work has a maximum of 200 hours per year, paid at between 150%-300% of the regular salary.
Termination Process
Process
Terminations in Vietnam have to be done for just cause, and notices must be given in writing and sent to the relevant government authorities.
Notice Period
Notice periods are generally 30-45 days, and vary based on the type of employment contract.
Severance Pay
Severance pay depends on the employment contract terms and length of time worked at the company, and is usually calculated as 0.5 month of wages for each year worked at the company, (1 month of wages per year if the termination is due to economic reasons or restructuring).
Additional Information
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.
★ 0.5% - Accident Insurance
★ 17% - Social Insurance
★ 3% - Health Insurance
★ 1% - Unemployment Insurance
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Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
