Vietnam Employer Payroll Calculator
Estimate total employer costs for hiring in Vietnam.
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Employer Cost Breakdown
Understanding Payroll Taxes in Vietnam
In Vietnam, employers are required to contribute to several social security funds on behalf of their employees. These contributions are calculated based on the employee’s gross salary and are crucial for providing various social benefits to employees, including social insurance, health insurance, unemployment insurance, and trade union fees. Below is an overview of these contributions and their respective caps.
1. Social Insurance (SI)
Social Insurance is your investment in your employees’ long-term security, ensuring they’re protected during life’s unexpected turns and in their retirement years. Under that, your employees receive benefits such as such as sick leave, maternity leave, and pensions. The current employer contribution rate in Vietnam is 17.5% of the employee’s gross salary, with a maximum salary cap of VND 46,800,000.
2. Health Insurance (HI)
Health Insurance in Vietnam covers medical expenses for employees. Employers are required to contribute 3% of the employee’s gross salary, up to a maximum salary cap of VND 46,800,000.
3. Unemployment Insurance (UI)
Unemployment Insurance provides financial support to employees in the event of job loss. The contribution rate is 1% of the employee’s gross salary. However, there is a maximum salary cap for unemployment insurance contribution which varies by region:
- Region 1: VND 99,200,000
- Region 2: VND 88,200,000
- Region 3: VND 77,200,000
- Region 4: VND 69,000,000
4. Trade Union Fee (TU) / Labour Union Fee (LFU)
The Trade Union Fee also known as Labour Union Fee supports activities and benefits organized by trade unions. As per labor laws of Vietnam, Employers contribute 2% of the employee’s gross salary, with a maximum salary cap of VND 46,800,000. The trade union contribution is applicable regardless of whether you have an active trade union or not.
Regional Classification for Unemployment Insurance
- Region I: Urban/suburban districts of Hanoi, Ho Chi Minh, Hai Phong City, Dong Nai, Binh Duong, Ba Ria – Vung Tau Province
- Region II: Rural Hanoi and Ho Chi Minh City, Urban Can Tho, Da Nang, and Hai Phong
- Region III: Provincial cities and districts of Bac Ninh, Bac Giang, Hai Duong, and Binh Phuoc provinces
- Region IV: Remaining areas
For accurate employer contributions, make sure you have selected the correct region in our Payroll Tax Calculator.
Example Calculation for Employer Contributions in Vietnam
Let’s assume you are hiring a software developer in Vietnam with a gross salary of VND 50,000,000 in Region 1:
- Social Insurance: VND 8,190,000
- Health Insurance: VND 1,638,000
- Unemployment Insurance: VND 500,000
- Trade Union Fee: VND 936,000
Total Employer Contribution: VND 11,264,000
Total Cost to Employer: VND 61,264,000
Simplify Your Payroll Management in Vietnam with RecruitGo
Vietnam’s complex payroll tax system presents significant compliance challenges for businesses, especially those managing remote employees or expanding into the market. Furthermore, regional classifications, varying contribution caps, and frequent regulatory changes don’t make it any easier for the companies.
To make it simple, consider working with local experts such as RecruitGo who specializes in remote hiring and payroll management.
With RecruitGo’s employer of record service, you can hire, manage, and pay employees in Vietnam without setting up a legal entity while staying compliant with local regulations.
For more details, fill out the form below and we will put you in touch with one of our experts.
