Hire Employees in Vietnam Without Setting Up a Company
Vietnam's young, tech-savvy workforce and competitive costs make it one of the fastest-growing hiring markets in Southeast Asia. RecruitGo handles employment contracts, payroll, social insurance, health insurance, and PIT compliance so you can hire in 7 business days.
What Is an Employer of Record in Vietnam?
An Employer of Record (EOR) is a locally registered company that legally employs workers in Vietnam on your behalf. RecruitGo's Vietnamese entity becomes the legal employer. We sign the labor contract (hop dong lao dong), register employees with social insurance (BHXH), health insurance (BHYT), and unemployment insurance (BHTN), withhold and file personal income tax (PIT), and manage all reporting required under the Labor Code 2019.
You retain full control over the employee's work, schedule, and responsibilities. They report to you, work on your projects, and function as part of your team. We handle everything that Vietnamese labor law places on the employer.
Without EOR: Setting up a foreign-invested company in Vietnam requires an Investment Registration Certificate, Enterprise Registration Certificate, charter capital, and typically takes 2 to 4 months with costs exceeding VND 500 million (~USD 20,000) in registration and setup fees. See full EOR vs entity comparison →
Who Should Use EOR in Vietnam?
What It Costs to Hire Through EOR
Vietnam's employer statutory costs are higher than Malaysia or the Philippines but remain competitive for the quality of talent available, particularly in technology and engineering. The total employer burden is predictable at approximately 23.5% above gross salary.
| Component | Monthly (VND) | Rate |
|---|---|---|
| Gross salary | 25,000,000 | — |
| Social insurance (BHXH) | 4,375,000 | 17.5% |
| Health insurance (BHYT) | 750,000 | 3% |
| Unemployment insurance (BHTN) | 250,000 | 1% |
| Trade union fee | 500,000 | 2% |
| Total loaded cost (before EOR fee) | ~30,875,000 | ~123.5% |
* Social insurance contributions are capped at 20x the base salary (currently VND 46,800,000/month for 2025). Trade union fee applies regardless of whether employees join a union. EOR management fee starts from $49.99/month and is not included above.
How this compares: Total employer cost in Vietnam is roughly 23.5% above gross salary. This is higher than Malaysia (~15-18%) and the Philippines (~18-22%), but lower than Indonesia (~30-40%) and Colombia (~35-45%). Vietnam compensates with significantly lower base salaries for equivalent skill levels, particularly in tech and engineering.
How Hiring Works Through EOR
You share the role, salary range, location (HCMC, Hanoi, or elsewhere), and start date. We confirm compliance requirements and return a cost breakdown within 24 hours.
We draft a bilingual labor contract compliant with the Labor Code 2019, register the employee with social insurance (BHXH), health insurance (BHYT), and unemployment insurance (BHTN), and set up PIT withholding with the General Department of Taxation.
We run monthly payroll, calculate and remit all insurance contributions and trade union fees, withhold PIT, and provide payslips. PIT returns are filed by the 20th of the following month. Year-end finalization is handled by us.
Vietnam's labor regulations are updated frequently through government decrees and circulars from the Ministry of Labor, Invalids and Social Affairs (MOLISA). We monitor changes to the Labor Code, insurance rates, minimum wages, and reporting requirements.
EOR vs Foreign-Invested Entity vs Contractors
| EOR | Own Entity (LLC) | Contractor | |
|---|---|---|---|
| Time to first hire | 7 business days | 2 to 4 months | Immediate |
| Setup cost | None | VND 500M+ (~USD 20K) | None |
| Charter capital | None | Required (varies by industry) | None |
| Compliance risk | Handled by EOR | Your responsibility | High |
| Insurance obligations | Handled by EOR | Your responsibility | None (risk) |
| Best for | 1 to 15 people, testing | 20+, permanent ops | Genuinely independent projects |
Contractor classification in Vietnam: Vietnamese authorities distinguish between labor contracts (hop dong lao dong) and service contracts (hop dong dich vu). If the person works under your direction, follows your schedule, and uses your tools, that is a labor relationship requiring a labor contract with full insurance registration. Misclassification can trigger backdated social insurance contributions (employer 17.5% + employee 8%) plus penalties and interest.
Labor Contract Types in Vietnam
The Labor Code 2019 (effective January 2021) simplified Vietnam's contract framework to two types. All labor contracts must be in writing for engagements of one month or more, and the Vietnamese-language version prevails in case of dispute.
Definite-term Contract
Hop dong lao dong xac dinh thoi han
Indefinite-term Contract
Hop dong lao dong khong xac dinh thoi han
The two-renewal rule: Vietnam's Labor Code is strict on this. A definite-term contract can only be renewed once. If the employee continues working after the second contract expires (or if you try to sign a third definite-term contract), the relationship automatically becomes indefinite-term. Your EOR tracks contract expiry dates and manages renewals or conversions proactively.
Probation
Vietnam allows probation periods that vary by position level: up to 6 days for simple work, 30 days for skilled technical roles, 60 days for roles requiring a college degree or higher, and up to 180 days for enterprise management positions. During probation, the salary must be at least 85% of the agreed wage. Either party can terminate the probation without notice or compensation.
Personal Income Tax (PIT)
Vietnam uses a progressive PIT system for employment income. Employers must withhold PIT monthly and file returns by the 20th of the following month. Year-end finalization is due by March 31 of the following year.
| Monthly taxable income (VND) | Rate |
|---|---|
| Up to 5 million | 5% |
| 5M to 10 million | 10% |
| 10M to 18 million | 15% |
| 18M to 32 million | 20% |
| 32M to 52 million | 25% |
| 52M to 80 million | 30% |
| Over 80 million | 35% |
Taxable income is calculated after deductions: VND 11 million/month personal deduction, plus VND 4.4 million/month for each dependent. Employee insurance contributions (10.5% of salary) are also deducted before PIT is calculated. Late filing penalties range from VND 15 million to 25 million. Your EOR handles all withholding, filing, and year-end finalization.
Social Insurance, Health Insurance & Unemployment Insurance
Vietnam has a comprehensive mandatory insurance system plus a trade union fee. Together, these make up the 23.5% employer burden and 10.5% employee burden on top of gross salary.
| Program | What it covers | Employer rate | Employee rate |
|---|---|---|---|
| BHXH (Social Insurance) | Sickness, maternity, occupational disease, retirement, survivorship | 17.5% | 8% |
| BHYT (Health Insurance) | National health insurance program | 3% | 1.5% |
| BHTN (Unemployment Insurance) | Unemployment benefits, job training | 1% | 1% |
| Trade Union Fee | Trade union operations (mandatory regardless of union membership) | 2% | 1% (if union member) |
| Total | 23.5% | 10.5% | |
Insurance contributions are capped at 20 times the base salary (muc luong co so), which is currently VND 2,340,000/month, giving a maximum insurable salary of VND 46,800,000/month. Salaries above this cap are not subject to additional insurance contributions. The trade union fee (2% employer) applies to all employers regardless of whether employees have formed or joined a trade union.
Employee Benefits and Leave Entitlements
Mandatory leave entitlements
Common additional benefits
Vietnam has no mandatory 13th month salary, but paying a Tet bonus (thuong Tet) equivalent to one month's salary is a deeply ingrained custom. Failing to offer one will make recruitment and retention very difficult. Beyond the Tet bonus, competitive employers typically offer:
Termination and Severance
Vietnamese labor law allows employers to unilaterally terminate a labor contract under specific conditions. The grounds differ from Western employment law and require careful documentation.
Employer-initiated termination grounds
Notice periods
| Contract type | Minimum notice |
|---|---|
| Indefinite-term contract | 45 days |
| Definite-term contract (12 to 36 months) | 30 days |
| Definite-term contract (under 12 months) | 3 working days |
Severance pay
Employees who have worked for 12 months or more are entitled to severance pay of half a month's salary for each year of service. This applies when termination is initiated by the employer for legitimate reasons or when the contract expires and is not renewed. Severance pay is not required for dismissal due to disciplinary violations.
Disciplinary termination: Vietnam requires a formal disciplinary process before termination for cause. This includes a hearing with the employee, trade union participation (if applicable), and documentation within specific timeframes. Failure to follow the process can result in the termination being voided and the employer being ordered to reinstate the employee and pay back wages. Your EOR manages the full disciplinary and termination process.
Regional Minimum Wages
Vietnam sets minimum wages by region. The most recent increase took effect in July 2025. Rates are set by the National Wage Council and approved by government decree.
| Region | Key cities | Monthly minimum (VND) | Approx. USD |
|---|---|---|---|
| Region I | Hanoi, HCMC, Hai Phong, Binh Duong | 4,960,000 | ~$198 |
| Region II | Da Nang, Can Tho, Bac Ninh, Quang Ninh | 4,410,000 | ~$176 |
| Region III | Provincial capitals, smaller cities | 3,860,000 | ~$154 |
| Region IV | Rural areas | 3,450,000 | ~$138 |
These are legal floors. Average salaries in HCMC and Hanoi are significantly higher, particularly for tech roles. A mid-level software developer typically earns VND 20 to 40 million/month. Customer support roles start at VND 8 to 15 million.
Working Hours, Overtime & Rest Days
Standard working hours are 8 hours per day and 48 hours per week. Most office-based employers use a 5-day, 40-hour schedule, but the 48-hour legal maximum applies to shift-based or manufacturing roles.
| Scenario | Rate |
|---|---|
| Normal day overtime | 150% of hourly rate |
| Weekly rest day overtime | 200% of hourly rate |
| Public holiday overtime | 300% of hourly rate |
| Night work (10 PM to 6 AM) | Additional 30% of hourly rate |
| Overtime during night work | Additional 20% on top of overtime rate |
Monthly overtime is capped at 40 hours and annual overtime at 200 hours (extendable to 300 hours in specific industries with government approval). Vietnam's night differential is higher than most Southeast Asian markets at 30%, plus an additional 20% premium when overtime falls during night hours. Your EOR tracks overtime limits and calculates premiums automatically.
Frequently Asked Questions
RecruitGo's EOR management fee starts from $49.99/employee/month. On top of that, you pay the employee's gross salary plus statutory contributions totaling 23.5% (social insurance 17.5%, health insurance 3%, unemployment insurance 1%, trade union 2%). For a VND 25 million/month role, total loaded cost before EOR fee is approximately VND 30.9 million.
Typically 7 business days from signed agreement to the employee's first day. This compares to 2 to 4 months for registering a foreign-invested entity with the Department of Planning and Investment.
No, there is no legal requirement. However, the Tet bonus (thuong Tet) is such a deeply embedded custom that it is practically mandatory. Not offering at least one month’s salary as a Tet bonus will make it very difficult to recruit or retain employees. Budget for it as a cost of doing business in Vietnam.
Under the Labor Code 2019, a definite-term contract can only be renewed once. If the employee continues working after the second contract, or if a third definite-term contract is signed, the relationship automatically converts to indefinite-term with stronger termination protections.
Probation periods vary by role: 6 days for simple work, 30 days for skilled technical roles, 60 days for college-educated positions, and up to 180 days for enterprise management. The probation salary must be at least 85% of the agreed wage. Either party can end probation without notice or compensation.
You can for genuinely independent service agreements. However, if the relationship involves direction and control of how the work is done (not just what work is done), it is a labor relationship under Vietnamese law. Misclassification triggers backdated social insurance contributions at 25.5% combined (employer + employee) plus penalties.
The 2% trade union fee is a mandatory employer contribution to the Vietnam General Confederation of Labor, regardless of whether your employees have formed or joined a trade union. This is unique to Vietnam in the region. It funds trade union operations at national and local levels.
Tet (Lunar New Year, usually late January to mid-February) involves 5 official days off, but many employees take additional leave. Expect reduced productivity for 2 to 3 weeks around Tet. Many companies pay the Tet bonus before the holiday and plan major projects around this period.
Employees with 12 or more months of service are entitled to severance pay of half a month’s salary per year of service when terminated for legitimate reasons or when their contract expires. Severance is not required for disciplinary termination, but the disciplinary process must be followed precisely.
