How to Hire in Vietnam: Complete Employer Guide (2026)

Vietnam has a labor force of 52.4 million workers, with average monthly wages of VND 7.9 million ($316) as of 2025. Employers must comply with the Vietnam Labor Code 2019 (Law No. 45/2019/QH14), register with the local Department of Labour, Invalids and Social Affairs (DOLISA), and make contributions to Vietnam Social Insurance (VSI). This guide covers every step from choosing a hiring structure to managing statutory obligations.

What Are the Hiring Options for Foreign Companies in Vietnam?

An EOR in Vietnam is the most common entry point for foreign companies. Vietnam's Labor Code prohibits foreign companies from directly employing Vietnamese workers without a local entity. The EOR acts as the legal employer and handles all statutory compliance. For co-employment, a PEO in Vietnam shares employer responsibilities while the client retains operational control.

What Employment Laws Govern Hiring in Vietnam?

The Labor Code 2019 replaced the 2012 code on January 1, 2021. Key changes include: recognition of only 2 contract types (eliminating seasonal contracts), expanded maternity leave, new overtime limits, and formal recognition of employee organizations beyond the Vietnam General Confederation of Labour (VGCL). Decree 145/2020/ND-CP provides implementation guidance. The Ministry of Labour, Invalids and Social Affairs (MOLISA) oversees enforcement through provincial DOLISA offices.

What Types of Employment Contracts Are Used in Vietnam?

The Labor Code 2019 recognizes only two contract types: indefinite-term and definite-term. Seasonal contracts were eliminated. All contracts must be written (verbal allowed only for work under 1 month).

Article 21 requires 9 mandatory clauses: employer name/address, employee name/DOB/ID, job description, workplace, contract duration, salary, working hours, social insurance, and occupational safety. Salary must be in VND. Contracts must be in Vietnamese (bilingual versions allowed; Vietnamese prevails). For detailed contract rules, see the article on Vietnam employment contracts in our topical library.

What Are the Mandatory Employer Costs in Vietnam?

Vietnam has one of the highest statutory employer contribution rates in Southeast Asia at 23.5% of gross salary. This covers social insurance, health insurance, and unemployment insurance.

Foreign employees with work permits contribute to SI (retirement + survivor: 8% employer, 8% employee), HI (3% + 1.5%), but not UI. The base salary cap is 20 times the statutory base salary published by MOLISA. Region I minimum wage is VND 4,960,000/month (effective July 2024). For complete cost breakdowns see the Vietnam employer costs guide.

How Does Payroll Work in Vietnam?

Vietnamese payroll typically runs monthly. Employers must pay wages on the agreed date (no later than 7 days after the pay period for piecework). Personal income tax (PIT) follows a progressive scale from 5% to 35% for residents. Non-residents pay a flat 20%.

PIT deductions include a personal allowance of VND 11 million/month and VND 4.4 million per dependent. Foreign employees on a work permit must obtain a tax code. For detailed payroll processing, see the Vietnam payroll guide. For salary data, see average salary in Vietnam.

What Work Permits Do Foreign Employees Need in Vietnam?

Foreign workers in Vietnam need a work permit issued by DOLISA. The permit is valid for up to 2 years and tied to a specific employer and position. Exemptions exist for intra-company transferees (under 90 days), technical experts (under 30 days), and certain other categories.

For comprehensive work permit guidance, see the Vietnam work permit guide. Employers must apply for the work permit before the foreign employee begins working. Working without a permit results in deportation and fines of VND 30-75 million for the employer.

What Are the Termination Rules in Vietnam?

The Labor Code 2019 specifies valid termination grounds for both employer and employee. Employers must provide written notice and follow specific procedures depending on the termination type.

Severance pay equals half a month's salary per year of employment, minus any periods covered by unemployment insurance. Employers must pay all outstanding wages, leave balance, and severance within 14 working days of termination (30 days in special circumstances). For details see the Vietnam termination guide.

What Are the Leave Entitlements in Vietnam?

Vietnam's maternity leave of 6 months is among the most generous in Southeast Asia. The Social Insurance Law funds maternity and sick leave benefits. For Vietnam labour law for foreigners, foreign employees with SI contributions receive the same leave benefits.

What Are the Salary Benchmarks in Vietnam?

HCMC and Hanoi command the highest salaries. Da Nang is emerging as a tech hub with salaries 15-20% below HCMC. For foreigner salaries in Vietnam, expect 2-5x local rates for equivalent roles. Executive search in Vietnam targets C-level positions at $3,000-10,000+/month.

What Is the Step-by-Step Process to Hire in Vietnam?

Step 1: Choose hiring structure. Register an LLC (4-8 weeks) or use an EOR (3-5 days). Step 2: Apply for work permit if hiring foreigners (2-4 weeks total). Step 3: Draft a Labor Code compliant employment contract in Vietnamese. Step 4: Register the employee with VSI for social, health, and unemployment insurance. Step 5: Set up monthly payroll with PIT withholding and SI contributions. Step 6: Register with the local tax authority and obtain tax codes.

For companies entering Vietnam, an employer of record in Vietnam handles all five steps. For entity setup, see company registration in Vietnam. Top employment agencies in Vietnam can assist with candidate sourcing.

Frequently Asked Questions

Can a foreign company hire directly in Vietnam without an entity?

No. Vietnam's Labor Code requires a local legal entity to employ workers. Foreign companies must register an LLC/representative office or use an employer of record.

What is the minimum wage in Vietnam for 2026?

Vietnam has 4 regional minimum wages. Region I (Hanoi, HCMC): VND 4,960,000/month. Region II: VND 4,410,000. Region III: VND 3,860,000. Region IV: VND 3,450,000. These rates took effect July 1, 2024.

How long can a fixed-term contract be?

A definite-term contract can be 12-36 months. It can be renewed once. After two consecutive definite-term contracts, the employer must offer an indefinite-term contract.

Is 13th month pay mandatory in Vietnam?

No. Vietnam does not have mandatory 13th month pay (unlike the Philippines). However, most employers provide a Tet bonus of 1-3 months salary. This is contractual, not statutory.

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