Vietnam Employer Costs: Complete Breakdown for 2026

Employers in Vietnam pay mandatory contributions totaling 23.5% of gross salary. These contributions cover social insurance (17.5%), health insurance (3%), unemployment insurance (1%), and trade union fee (2%). The contribution base is capped at 20 times the base salary for social and health insurance. These costs apply to all employees with employment contracts.

What Are the Mandatory Employer Contributions in Vietnam?

Vietnamese employers must pay four mandatory contributions on top of every employee's gross salary. Social insurance costs 17.5% of gross salary. Health insurance costs 3%. Unemployment insurance costs 1%. Trade union fee costs 2%. The total mandatory employer contribution is 23.5% of gross salary.

*Employee trade union contribution of 1% applies only to union members. **Total employee rate is 10.5% for non-union members.

The contribution base for social and health insurance is capped at 20 times the base salary (currently 1,800,000 VND/month × 20 = 36,000,000 VND/month). The unemployment insurance contribution base is capped at 20 times the regional minimum wage. Salary components above these caps do not incur contributions.

How Is Social Insurance Calculated in Vietnam?

Social insurance in Vietnam covers five regimes: sickness, maternity, occupational accident/disease, retirement, and survivorship. The employer pays 17.5% broken down as: retirement and survivorship fund (14%), sickness and maternity fund (3%), occupational accident/disease fund (0.5%). The employee pays 8% toward retirement and survivorship only.

Social insurance contributions are calculated on the salary stated in the employment contract including position-based allowances, seniority allowances, and other regular allowances. One-time bonuses, productivity bonuses, and meal allowances are excluded from the contribution base under Decree 115/2015/ND-CP.

What Is the Total Cost of Hiring an Employee in Vietnam?

The total employer cost in Vietnam equals gross salary × 1.235 (adding 23.5% for mandatory contributions) plus any additional benefits. For an employee with a gross salary of 20,000,000 VND/month ($800), the mandatory employer cost is 4,700,000 VND ($188), bringing the total to 24,700,000 VND ($988).

Additional common costs include 13th month bonus (not legally required but expected, adds 8.3% annually), meal allowance (730,000 VND/month tax-free limit), transportation allowance, and private health insurance. Total cost including benefits typically reaches 130-145% of gross salary.

Aniday's EOR Vietnam service (Aniday EOR Vietnam) includes all mandatory contributions within the EOR fee structure. Aniday's outsourced payroll service (Aniday Outsourced Payroll Vietnam) handles all contribution calculations and filings for companies with their own entity.

What Are the Regional Minimum Wages in Vietnam?

Minimum wages were last updated effective July 1, 2024 under Decree 74/2024/ND-CP. The government reviews minimum wages annually. Employers must pay at least the regional minimum wage for the location where the employee works. Minimum wage applies to the simplest job requiring no training.

What Overtime Costs Apply in Vietnam?

Vietnam's overtime premiums are among the highest in Southeast Asia. Normal overtime (weekday) pays 150% of the regular hourly rate. Weekend overtime pays 200%. Public holiday overtime pays 300%. Night work (10 PM to 6 AM) adds an additional 30% premium. Night overtime on a holiday pays 390% of the regular rate.

Maximum overtime is 40 hours per month and 200 hours per year (300 hours for specific industries with government approval). Vietnam has 11 public holidays per year. Employers must pay the full daily wage plus the overtime premium for employees working on public holidays.

What Is the 13th Month Salary in Vietnam?

Vietnam does not legally require a 13th month pay in Vietnam salary. The Labor Code does not mandate year-end bonuses. The 13th month bonus is a market practice: approximately 90% of companies in Vietnam pay a 13th month salary equivalent to one month's base salary. Some companies pay up to 15-18 months annually depending on performance.

The 13th month bonus is subject to personal income tax. It is not subject to social insurance contributions if classified as a performance bonus rather than a regular salary component. Companies should structure the bonus carefully in employment contracts to optimize tax treatment.

Are meal allowances subject to social insurance in Vietnam?

No. Meal allowances are excluded from the social insurance contribution base under Decree 115/2015/ND-CP. The tax-free meal allowance limit is 730,000 VND/month per employee. Amounts above this limit are subject to personal income tax but not social insurance contributions.

How often are social insurance contributions filed in Vietnam?

Social insurance contributions are filed and paid monthly to Vietnam Social Security (VSS). The employer submits a contribution report by the last working day of each month. Late payment incurs interest of 2% per month on the outstanding amount. VSS audits employer compliance annually.

Do employers pay social insurance for foreign workers in Vietnam?

Yes, since December 2018 under Decree 143/2018/ND-CP. Foreign workers with work permits and employment contracts in Vietnam are subject to compulsory social insurance. Employer contributions for foreign workers are: retirement/survivorship 14%, sickness/maternity 3%, occupational accident 0.5%, health insurance 3%, totaling 20.5%.

What is the personal income tax rate in Vietnam?

Vietnam uses progressive tax rates for resident employees: 5% (up to 60M VND/year), 10% (60-120M), 15% (120-216M), 20% (216-384M), 25% (384-624M), 30% (624-960M), 35% (above 960M VND/year). Non-residents pay a flat 20% on Vietnam-sourced income. The personal deduction is 11,000,000 VND/month.

Are part-time employees subject to the same employer costs?

Part-time employees with employment contracts of 1 month or longer are subject to social insurance, health insurance, and unemployment insurance at the same rates. Contributions are calculated on actual salary paid. Part-time employees working less than 1 month are not subject to mandatory social insurance but the employer should provide health insurance.

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