Monthly Minimum Wage
The monthly minimum wage in Vietnam depends on the region where the employee resides:
- Region I – VND 4,960,000 per month
- Region II – VND 4,410,000 per month
- Region III – VND 3,860,000 per month
- Region IV – VND 3,450,000 per month
Overtime Pay and Maximum Working Hours
The standard working hours are 8 hours per day and 40 hours per week. The standard working week is from Monday to Friday.
Overtime pay is mandatory. Hours worked outside of standard working hours are considered overtime. Employees may not work more than 12 hours per day, including normal working hours and overtime. For overtime hours, employees are entitled to the following compensation:
- 150% of the hourly wage on weekdays
- 200% of the hourly wage on weekly rest days
- 300% of the hourly wage on public holidays
Personal Income Tax
The personal income tax rate ranges from 5% to 35%. Income tax is calculated on a progressive basis. Various other factors such as family status and the number of children may affect the overall tax rate.
Annual Leave
Full – time and part – time employees are entitled to 12 working days of paid time off (PTO) per year. PTO accumulates at a rate of 1 day per month. For every five years of service with an employer, the annual leave increases by 1 day.
Public Holidays
Vietnam has 6 national public holidays (a total of 11 days), as well as some regional holidays depending on the employee’s location. The national public holidays include:
- New Year’s Day: 1 day
- Lunar New Year: 5 days (from February 8th to 14th in 2024, including two additional days off due to the weekend)
- Hung Kings’ Festival: 1 day
- Reunification Day: 1 day
- International Workers’ Day: 1 day
- National Day: 2 days
Other Types of Leave
Maternity Leave
Pregnant employees who have paid social insurance premiums for at least 3 months are entitled to 6 months of paid leave. They can take up to 2 weeks of leave before the child is born. Employees will receive 100% of their average salary based on their social insurance contributions over the past 6 months. Social security will be responsible for paying this salary.
If a pregnant woman has paid social insurance premiums for at least 3 months within 12 months before giving birth, she is entitled to 6 months of paid leave, of which up to 2 months can be taken before the child is born. She will receive 100% of her average salary based on her social insurance contributions over the past 6 months. Social security will be responsible for paying this salary.
Paternity Leave
Employees who have paid social security contributions for at least 3 months are entitled to 5 days of paid paternity leave. During this period, employees will receive 100% of their salary, and social security will be responsible for paying this salary.
Sick Leave
Employees are entitled to a maximum of 30 days of paid sick leave. Employees will receive 75% of their salary during sick leave paid by social security. An employee’s sick leave can be extended depending on the employee’s situation, but the extension is subject to specific circumstances.
Labor Contracts
The contract must be in Vietnamese and can be written in bilingual form (Vietnamese – English). The contract must be in writing and signed by both parties.
The contract must include:
- Names (both parties)
- Addresses (both parties)
- Start date
- End date (if applicable)
- Work location
- Job description
- Salary (including all allowances)
- Payment date
- Working hours
- Length of annual leave
- Notice period
Probationary Period
The probationary period varies depending on the employee’s position:
- Senior management positions: 180 days
- Positions requiring a university degree or higher professional and technical qualifications: 60 days
- Positions requiring intermediate professional and technical qualifications, skilled workers, or professional workers: 30 days
- Other positions: 6 days
The minimum probationary period is 6 days, and the maximum is 180 days.
Employer Costs
Employer costs amount to 23.5% of the employee’s salary. The maximum monthly salary for calculating social insurance, health insurance, and union fees is VND 46,800,000.
The maximum monthly salary for calculating unemployment insurance premiums is 20 times the monthly minimum wage in the employee’s place of residence (maximum VND 99,200,000).
- Social insurance – 17%
- Health insurance – 3%
- Accident insurance – 0.5%
- Union fees – 2% (not applicable to foreigners)
- Unemployment insurance – 1% (not applicable to foreigners)
Termination of Employment (Legal Requirements and Best Practices)
Notice Period
The notice period is 45 days.
Voluntary Resignation
Employees are allowed to resign at any time in accordance with the employment agreement.
Reason: No legal requirement
Compliance requirement: Employees must provide a written resignation letter with their signature.
Statutory notice period:
No notice is required if:
- The employee has not been assigned work or has not received the working conditions stipulated in the employment agreement.
- The employee has been abused or verbally insulted by the employer.
- The employee is pregnant but must stop working because the work may have an adverse effect on the pregnancy.
Otherwise: - For an open – ended contract: 45 days’ notice in advance
- For a fixed – term contract of 12 to 36 months: 30 days’ notice in advance
- For a fixed – term contract of less than 12 months: 3 working days
Severance pay: Yes, for employees with at least 12 months of service:
Half a month’s salary for each year of service.
Termination during Probation
✅ 1. Conditions for an employer to terminate an employment contract during the probationary period:
According to Article 27, Paragraph 3 of the Vietnamese Labor Code:
“During the probationary period, either party has the right to give notice in advance and terminate the probationary agreement without giving reasons or making compensation.”
That is:
- The employer can terminate the contract at any time during the probationary period;
- But must give notice in advance (the law does not mandate the number of days in advance, but it should be reasonable, usually 1 – 3 days are recommended);
- No compensation needs to be paid;
- No unemployment allowance or severance pay is required.
⚠ 2. Notes: - If a formal employment contract is signed without a probationary agreement, even if the employee is in the probationary stage, the termination of employment should be handled in accordance with the formal employment contract.
- The probationary salary must not be less than 85% of the official salary for the position.
- There are restrictions on the probationary period for each position (for example, the probationary period for management positions should not exceed 60 days, and for general positions, it should not exceed 30 days).
✅ Summary:
On the premise of signing a probationary agreement, the employer can terminate the employment relationship at any time during the probationary period without compensation, as long as notice is given in advance.
Termination by Agreement
The employer and the employee are allowed to mutually agree to terminate the employment relationship for any reason.
Common reasons:
- There may be disputes or lawsuits involving the employee.
- The employee cannot be dismissed for justifiable reasons, lay – offs, or other business reasons.
- The employee has negotiated the termination of the employment contract.
Statutory notice period: Mutually agreed
Severance pay: For employees with at least 12 months of service:
Half a month’s salary for each year of service.
Termination for Cause
The employer is allowed to immediately terminate the employment of an employee due to serious misconduct without prior notice.
Reasons:
- Serious misconduct or violation of discipline (such as theft, embezzlement, infringement of the employer’s intellectual property rights, repeated violations, 5 days of absence within 30 days or 20 days of absence within 365 days)
- The work permit of a foreign employee has expired.
- The employee is unable to work after treatment due to illness or accident:
- For an open – ended contract: 12 consecutive months
- For a fixed – term contract of 12 to 36 months: 6 consecutive months
- For a fixed – term contract of less than 12 months: more than half of the employment period
- Repeated failure to complete work according to established evaluation criteria.
Compliance requirements:
Disciplinary action cannot be taken against an employee if: - The employee is on leave with the employer’s consent or due to illness.
- The employee is pregnant, on maternity leave, or caring for a child under 12 months old.
- The employee has a mental illness when violating company policies (resulting in loss of control over their behavior).
The employer cannot impose more than 1 disciplinary action for a violation of company policies. If an employee commits multiple violations, the most severe disciplinary action should be taken for the most serious violation.
The employer must follow a disciplinary procedure before deciding to terminate employment, including recording violations within 6 months, notifying the union, holding meetings with the employee and the union to address violations, and recording the meeting minutes.
Statutory notice period: - For an open – ended contract: 45 days’ notice in advance
- For a fixed – term contract of 12 to 36 months: 30 days’ notice in advance
- For a fixed – term contract of less than 12 months, or if the employee is unable to work after treatment due to illness or accident: 3 working days
Note: No notice is required if the employee is absent without justifiable reasons for at least 5 consecutive working days.
Severance pay: For employees who have worked for at least 12 months and are terminated for the following reasons: - The employee fails to perform the work according to the standards set by the employer.
- The employee is unable to work after treatment due to illness or accident:
- For an open – ended contract: 12 consecutive months
- For a fixed – term contract of 12 to 36 months: 6 consecutive months
- For a fixed – term contract of less than 12 months: more than half of the employment period
The severance pay is half a month’s salary for each year of service.
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