Vietnam
Min. wage
(x12 payments)
Varies by region
About the minimum wage
Employer tax
~23.5%
Understand employer tax
Annual leave
12 days
Learn about annual leave
Notice period
45 days min
Termination and notice info
Updated
Sep 2026
An indefinite-term (open-ended) labor contract has no fixed expiry date and is the default/preferred contract form under the 2019 Labor Code. It offers employees the greatest job security, requiring 45 days' notice and valid statutory grounds for termination by the employer, and it is the only contract type available for a role once an employee has completed two consecutive fixed-term contracts with the same employer.
Fixed-term (definite) contracts may run for any period up to 36 months. Under the 2019 Labor Code, an employer may only offer a maximum of one further fixed-term renewal after an initial fixed-term contract expires (with limited exceptions for elderly workers, foreign employees, temporary replacements, and a few other categories); if the employee continues working after a second fixed-term contract ends, it automatically converts to an indefinite-term contract.
Normal working hours may not exceed 8 hours/day and 48 hours/week (many employers voluntarily operate a 44-hour, 5.5-day week, and the government has floated moving toward a statutory 44-hour week). Overtime is capped at 40 hours/month and 200 hours/year (up to 300 hours/year in certain manufacturing, export, and other designated sectors), and requires employee consent plus premium pay (150%/200%/300% of normal wage depending on when it is worked).
Maximum probation length depends on role: up to 180 days for enterprise/branch director-level positions; up to 60 days for roles requiring a college degree or higher / technical or professional expertise; up to 30 days for roles requiring intermediate vocational qualifications, technical worker certificates, or skilled staff; and up to 6 working days for all other jobs. During probation, pay must be at least 85% of the official salary for the role, and either party may terminate the probationary arrangement at any time without notice or compensation, simply by notifying the other party.
Vietnamese labor law does not require a 13th-month salary, but paying one — typically equal to one month's basic salary, disbursed before Tet (Lunar New Year) — is a deeply embedded cultural and competitive norm. The vast majority of employers (including virtually all foreign-invested and multinational companies) pay it, and failing to do so is a significant retention and employer-branding risk even though it carries no legal penalty.
Vietnam does not maintain a general statutory list of restricted job titles for local hires, but the labor contract must accurately state the employee's job title/position and job description, as this determines applicable minimum wage region/category, probation length, and social insurance registration category. Certain regulated professions (e.g. legal, medical, accounting, education, work-permit-holding foreign roles) require specific licensed titles or qualifications to be used and registered with authorities.
Total statutory employer contribution is approximately 21.5% of the employee's monthly salary (capped at 20x the statutory base salary for Social/Health Insurance, and 20x the regional minimum wage for Unemployment Insurance): Social Insurance 17.5% (covering retirement & death, and sickness & maternity funds, plus the Work Accident & Occupational Disease Fund typically assessed within this rate at 0.5% for most enterprises), Health Insurance 3%, and Unemployment Insurance 1% (foreign employees are generally exempt from Unemployment Insurance). In addition, employers must pay a mandatory Trade Union Fee of 2% of the payroll base to the Vietnam General Confederation of Labour, regardless of whether a union is established at the company, bringing total employer payroll cost to roughly 23.5%.
Total statutory employee contribution is 10.5% of gross salary (subject to the same insurance caps as employer contributions), split as: Social Insurance 8%, Health Insurance 1.5%, and Unemployment Insurance 1% (foreign employees are exempt from the Unemployment Insurance portion). These amounts are withheld and remitted monthly by the employer.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Vietnam's social security system (referred to as SHUI) comprises three compulsory insurance schemes, funded jointly by employer and employee, totaling approximately 32% of gross salary (21.5% employer / 10.5% employee), based on the employee's official contribution salary (capped at 20x the statutory base salary for SI/HI, and 20x regional minimum wage for UI):
In addition, employers pay a mandatory 2% Trade Union Fee on top of the SHUI contributions, remitted to the Vietnam General Confederation of Labour regardless of whether an in-house union exists.
Work-related accident and occupational disease protection is funded within the Social Insurance employer contribution (bundled into the 17.5% Social Insurance rate for most enterprises, generally attributed at around 0.5% of payroll; qualifying lower-risk enterprises may apply for a reduced 0.3% rate). Employees make no contribution to this fund.
Vietnamese law provides for two distinct termination payments, both calculated on the employee's average salary over the 6 months preceding termination, and both covering only years of service not already covered by Unemployment Insurance (i.e., generally periods before 2009, or gaps where UI wasn't paid):
Because Unemployment Insurance has been compulsory since 2009 and covers most current tenure, actual cash severance amounts owed directly by employers are often modest for employees hired after that date, but must still be calculated and confirmed at termination.
A 13th-month salary (commonly called the "Tet bonus", paid ahead of Lunar New Year) is not required by Vietnamese labor law, but it is one of the strongest market norms in Vietnamese employment — practiced by the vast majority of local and foreign-invested employers.
P.S. our team speaks multiple languages and we'd love to chat in your preferred language if requested.
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
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.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
