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To increase international competitiveness, Vietnam is focused on developing infrastructure including increased support for the construction sector and continued investment in manufacturing. The regulatory business environment has also undergone significant change to make it easier and more attractive for businesses to operate in Vietnam.

Doing Business in Vietnam

Some of the positive changes made to attract more international business include lowering the cost of starting a business and lowering employer contributions to the labour fund tax. However, despite the many improvements and the positive direction taken, there are restrictions and challenges to be aware of in this developing nation. Download PDF

Setting up a new business or expanding an existing one in Vietnam is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banks are open from Monday to Friday 8 am to 4 pm.

The standard working week is 40 hours per week usually worked from Monday to Friday

The primary piece of legislation that regulates employment relationships in Vietnam is the Labour Code 2019 which came into force on 1 January 2021. The Labour Code explicitly states that it applies to foreign nationals working in Vietnam. However, the Code does not apply to foreign nationals who are working in Vietnam through an internal company transfer under a foreign employment contract.

Main Industries Food processing, garments, textiles, shoes
GDP Growth 6.88%
Dates & Numbers dd/mm/yyyyy
Official State Name Socialist Republic of Vietnam
Population 97.34 million
Capital Hanoi
Major Languages Vietnamese
Currency Vietnamese dong
Internet Domain .vn
International Dialing Code +84



The most significant payroll-related obligations for employers include minimum wages, overtime, income tax withholding and social security. Vietnam operates a progressive rate of income tax which is capped at 35%. Multinational companies who operate global payroll should be aware that Vietnam’s minimum wage rates (for which there are two wage types) play a significant role in payroll compliance. There is the common minimum wage and the regional private sector minimum wage.

It is acceptable to provide employees with online payslips


45 days prior notice

Employee Termination

Payroll reports must be kept for seven years


It is common to pay a 13th month salary at the end of the lunar year

13th month salary

12 days

Annual Leave

This is set by region and therefore, there is no overall fixed rate

Minimum Wage

A maximum of 180 days in a year

Sick Leave

Employees must be paid at a rate of at least 150% during rest days or the weekend


6 months of paid maternity leave and 5-14 days of paid paternity leave

Maternity & Paternity Leave

The severance payment is equal to one-half of one month's wages for each year of employment.

Severance Pay

Tax and Social Security

Social, health and unemployment insurance contributions are compulsory for all employers. Health insurance is also applicable to foreigners who work in Vietnam under labour contracts. Taxable revenue includes income from sale of goods, provision of services, leasing or sale of assets, joint venture operations and more.


Residents are taxed on worldwide income while non-residents are taxed on Vietnam-sourced income at a flat rate of 20%. The schedule for taxes is capped at 35%.





Corporate Income Tax Personal Income Tax Sales Tax VAT

Social Security

There are three types of mandatory social security in Vietnam: social insurance, health insurance and unemployment insurance. Payable amounts differ depending on the employee’s wages and a wage ceiling for the calculation of contributions is imposed at 20 times the wage for both wage types. While social and unemployment insurance are compulsory for Vietnamese workers, health insurance applies to both local and foreign staff employed.




Social Security Rate Social Security Rate for Employers Social Security Rate for Employees
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Employment Law

Vietnam’s labour laws do not distinguish between different categories of worker. However, employees are defined more expansively. Businesses, global or otherwise, must take note of this when drafting employment contracts with independent contractors or other types of workers who they do not want to regard as employees as they may be considered as employees if criteria are met.

Employment agreement
All employment agreements must be made in writing except those for temporary work of less than a month which can be agreed upon orally. There are a number of mandatory provisions including the details of both employer and employee, the work to be performed, work hours and holidays, details of insurance for the employee as well as training and skills improvement.

Working condition
There is a restriction on the maximum regular working hours of employees which no party can waive away. Employers are permitted to grant overtime but this is capped at 40 hours of overtime per month. There is no specific provision that gives employees the right to request to work flexibly. However, the law encourages employers to create conditions for women employees to have regular employment and to have systems that include flexible work arrangements.

By law, employees working under normal conditions are entitled to 12 days of paid annual leave exclusive of public holidays. Employees working under heavy, hazardous or toxic work conditions are entitled to 14 days of paid annual leave and those working under extremely heavy, hazardous or toxic work conditions are entitled to 16 days of paid annual leave.

Employment termination
Termination of employment by an employer, when permitted, must provide advance notice to the employee within the minimum statutory time limit. Employees who resign are also required to provide advance notice within the statutory time limit. However, in specific circumstances, employees who resign are not required to provide advance notice (such as where the work is not the same as was agreed in their contract, if the salary was not paid in full or on time, if the employee is subject to sexual harrasssment at work).

45 days

Minimum notice period for terminating an employee


Working hours per week

1 day

Total number of days for Compassionate & Bereavement Leave


Total number of public holidays


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In order to work in Vietnam, foreign nationals must have a work permit unless they qualify for an exemption under law. Foreign workers are also required to carry a visa or temporary residence card.

Residency permits
In order to get a visa to work in Vietnam, a worker must obtain an invitation letter issued by a Vietnamese, Vietnam-based sponsor. Foreign nationals who wish to work in Vietnam on a long-term basis may be eligible to apply for a temporary residence card instead of a work visa.

Work Permit validity 2 year
Required Documents

EU national requirements:

Passport with at least 6 months validity

Passport-size picture

Proof of payment of the Vietnam visa fee

If the permit is applied for through the embassy: Vietnam visa application form, the letter of sponsorship or other documents (such as the Letter of Invitation)

If the permit is applied for through Vietnam Visa on arrival: a pre-obtained letter of approval, the entry and exit form and cash to pay the Vietnam visa stamping fee.

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