Outsource Vietnamese Payroll to RecruitGo.
Vietnam has one of the highest statutory employer burdens in Southeast Asia at approximately 23.5% above gross salary. Social insurance, health insurance, unemployment insurance, and a mandatory trade union fee all apply. This guide breaks down each component, the 2026 PIT deduction increases, and what your EOR handles for you.
How Vietnamese Payroll Works
Vietnamese payroll requires employers to calculate and remit four types of mandatory contributions each month: Social Insurance (SI), Health Insurance (HI), Unemployment Insurance (UI), and the Trade Union Fee. On top of these, employers must withhold and remit Personal Income Tax (PIT) to the General Department of Taxation. All contributions are managed through the Vietnam Social Security agency (VSS) and the local tax authority.
Pay frequency is monthly, with wages paid in VND. Vietnam's employer contribution rate is the highest among the five ASEAN markets in our payroll series: approximately 23.5% above gross salary (17.5% SI + 3% HI + 1% UI + 2% Trade Union). Employee contributions add another 10.5% (8% SI + 1.5% HI + 1% UI). Both employer and employee contributions are capped based on multiples of the reference salary (for SI/HI) or regional minimum wage (for UI).
Vietnam does not have a statutory 13th month salary. However, a Tet bonus (Lunar New Year bonus) is deeply customary. Most employers pay at least one month's salary before Tet. If the bonus is specified in the employment contract, it becomes a legal obligation.
Major 2026 PIT change: Resolution 110/2025/UBTVQH15 significantly increases the personal income tax deductions. The taxpayer deduction rises from VND 11,000,000 to VND 15,500,000/month. The dependent deduction rises from VND 4,400,000 to VND 6,200,000/month per dependent. This reduces taxable income and PIT liability for most employees, particularly those in the mid-salary range.
Social Insurance, Health Insurance, and Unemployment Insurance
Contribution rates
| Type | Employer | Employee | Cap Basis |
|---|---|---|---|
| Social Insurance (SI) | 17.5% | 8% | 20x reference salary (VND 50.6M/mo from 1 Jul 2026) |
| - Regular SI | 17% | 8% | Retirement, sickness, maternity, survivorship |
| - Occupational accident/disease | 0.5% | 0% | Work injury and occupational disease coverage |
| Health Insurance (HI) | 3% | 1.5% | 20x reference salary (VND 50.6M/mo from 1 Jul 2026) |
| Unemployment Insurance (UI) | 1% | 1% | 20x regional minimum wage (varies by zone) |
| Total (excl. Trade Union) | 21.5% | 10.5% | Plus 2% employer Trade Union fee |
Contribution caps
SI and HI contributions are capped at 20 times the reference salary, which equals the statutory base salary. The base salary rose from VND 2,340,000 to VND 2,530,000/month on July 1, 2026 (Decree 161/2026/ND-CP), lifting the cap from VND 46,800,000 to VND 50,600,000/month. For employees earning above this cap, contributions do not increase further. UI contributions are capped at 20 times the regional minimum wage, which varies across Vietnam's four wage zones (Zone 1 being highest).
| Zone | Minimum Monthly Wage (2026) | UI Cap (20x) |
|---|---|---|
| Zone 1 (Ho Chi Minh City, Hanoi, etc.) | VND 5,310,000 | VND 106,200,000 |
| Zone 2 (major cities, incl. central Da Nang) | VND 4,730,000 | VND 94,600,000 |
| Zone 3 (provincial towns) | VND 4,140,000 | VND 82,800,000 |
| Zone 4 (rural areas) | VND 3,700,000 | VND 74,000,000 |
Regional minimum wages are updated by government decree. The figures above reflect Decree 293/2025/ND-CP effective January 1, 2026. The SI/HI reference salary is separate from the regional minimum wage and is set by a different mechanism.
Foreign employees: Under Article 2(2) of the Social Insurance Law 2024 and Decree 158/2025/ND-CP (which replaced Decree 143/2018/ND-CP from July 1, 2025), foreign employees on a labor contract of 12 months or more must participate in Social Insurance and Health Insurance at the same rates. However, foreign employees are exempt from Unemployment Insurance. Intra-company transferees and employees who have reached retirement age are exempt from compulsory SI. Foreign employees can claim SI as a lump sum when their labor contract ends or their work permit expires without renewal.
Trade Union Fee
Vietnam is unique among the ASEAN markets in our payroll series in requiring a mandatory Trade Union contribution from employers. The employer pays 2% of the total salary fund to the Trade Union, regardless of whether a grassroots trade union has been established at the company. This is not optional and is enforced by the Vietnam General Confederation of Labour.
If a grassroots trade union exists at the company, employees also contribute 1% of their salary to the union. If no union has been established, only the employer's 2% applies. The employer portion is calculated on the total insurable salary fund (the sum of all employees' insurable salaries), not on individual salaries.
| Contribution | Rate | Notes |
|---|---|---|
| Employer Trade Union fee | 2% of total salary fund | Mandatory for all employers. Paid regardless of whether a trade union exists at the company. |
| Employee Trade Union fee | 1% of salary | Only applies if a grassroots trade union has been established. Deducted from employee salary. |
Including the Trade Union fee, the total mandatory employer contribution in Vietnam is approximately 23.5% above gross salary (17.5% SI + 3% HI + 1% UI + 2% Trade Union). This is the highest statutory employer burden among the five ASEAN markets covered in our payroll series.
Personal Income Tax (PIT)
Employers in Vietnam must withhold PIT from employee salaries monthly and remit it to the tax authority. Tax residents (183+ days in Vietnam per 12 months) are taxed on worldwide income using progressive rates from 5% to 35%. Non-residents pay a flat 20% on Vietnam-sourced income with no deductions. Before applying the tax brackets, the employee's gross income is reduced by mandatory insurance contributions (SI, HI, UI employee shares) and personal/dependent deductions.
Progressive PIT rates (residents, from 2026)
The Personal Income Tax Law 2025 (Law 109/2025/QH15) cuts the schedule from 7 brackets to 5 for salary income from January 1, 2026.
| Monthly Taxable Income (VND) | Tax Rate |
|---|---|
| Up to 10,000,000 | 5% |
| 10,000,001 to 30,000,000 | 10% |
| 30,000,001 to 60,000,000 | 20% |
| 60,000,001 to 100,000,000 | 30% |
| Over 100,000,000 | 35% |
Personal deductions (updated 2026)
| Deduction | Previous (to 2025) | New (2026 onwards) |
|---|---|---|
| Taxpayer deduction | VND 11,000,000/month | VND 15,500,000/month |
| Per dependent deduction | VND 4,400,000/month | VND 6,200,000/month |
Impact of the 2026 deduction increase: Under Resolution 110/2025/UBTVQH15, the taxpayer deduction rises 41% from VND 11M to VND 15.5M/month, and the dependent deduction rises 41% from VND 4.4M to VND 6.2M/month. For a married employee with 2 dependents, the total monthly deduction increases from VND 19,800,000 to VND 27,900,000. This significantly reduces PIT for mid-range earners and may bring some lower-paid employees below the taxable threshold entirely.
What It Actually Costs to Employ Someone
Complete monthly payroll breakdown for a Vietnamese employee in Ho Chi Minh City (Zone 1) earning VND 25,000,000/month gross (~USD 990). Uses 2026 PIT deductions and current contribution rates.
| Component | Employer Pays | Employee Pays | Notes |
|---|---|---|---|
| Social Insurance (SI) | VND 4,375,000 | VND 2,000,000 | 17.5% ER + 8% EE (below cap) |
| Health Insurance (HI) | VND 750,000 | VND 375,000 | 3% ER + 1.5% EE (below cap) |
| Unemployment Insurance (UI) | VND 250,000 | VND 250,000 | 1% each (below Zone 1 cap) |
| Trade Union Fee | VND 500,000 | VND — | 2% of salary fund. No grassroots union assumed. |
| PIT (Income Tax) | VND — | VND ~344,000 | 2026 deductions: VND 15.5M taxpayer. Taxable ~VND 6.9M at 5%. |
| Totals | VND ~30,875,000 | VND ~2,969,000 | Employer cost ~123.5% of gross. Take-home ~VND 22,031,000. |
PIT is approximate and depends on marital status, dependents, and other deductions. Uses 2026 deduction thresholds (VND 15.5M taxpayer). Trade Union assumes no grassroots union (employer 2% only). Tet bonus not included (not mandatory but culturally expected). EOR management fee not included above.
Use our interactive calculator to compute net pay, SI/HI/UI, PIT, and employer cost.
Deadlines, Forms, and Common Mistakes
Filing deadlines
| Obligation | Deadline | Method |
|---|---|---|
| SI / HI / UI contributions | By end of each month | Vietnam Social Security (VSS) online portal |
| PIT withheld on salaries | Quarterly, by the last day of the month after the quarter | Quarterly for all employers from July 1, 2026 (Circular 89/2026/TT-BTC) |
| Trade Union fee | Monthly, with SI/HI/UI | Via VSS or direct to Trade Union federation |
Key annual obligations
| Obligation | Deadline |
|---|---|
| Annual PIT finalization (employer) | March 31 of the following year |
| Annual PIT finalization (individual) | April 30 of the following year (if filing directly) |
| Annual PIT statements to employees | End of each tax year or upon request |
| Annual unemployment insurance report | Before January 15 of the following year |
| Regional minimum wage update | Annually by government decree (effective January 1 or July 1) |
Common payroll mistakes
You Pay One Invoice. We Handle the Rest.
When you hire in Vietnam through RecruitGo's Employer of Record, all payroll processing is managed by our local team. You do not interact with the Vietnam Social Security agency, the tax authority, or the Trade Union federation directly.
We calculate gross-to-net pay, deduct employee SI, HI, UI contributions and PIT, and pay your employees in Vietnamese Dong on the agreed pay date. Itemized payslips issued monthly.
We register each employee with the VSS, calculate contributions using the correct caps (reference salary for SI/HI, regional minimum wage for UI), and remit monthly. Foreign employees are correctly excluded from UI.
We calculate monthly PIT using the 2026 progressive rates and updated deductions (VND 15.5M taxpayer, VND 6.2M per dependent). Returns filed quarterly, by the last day of the month after each quarter. Annual PIT finalization by March 31. PIT statements issued to all employees.
We calculate and remit the 2% employer Trade Union fee monthly. If a grassroots trade union is established, we also handle the 1% employee deduction and reporting.
You receive a single consolidated invoice covering gross salary, all employer contributions (SI, HI, UI, Trade Union), Tet bonus provision (if agreed), and EOR fee. No VND bank accounts or multi-agency payments needed.
We monitor reference salary adjustments, regional minimum wage increases, PIT deduction changes, new social insurance law provisions, and Trade Union regulations. Payroll calculations update automatically when rules change.
Frequently Asked Questions
Approximately 23.5% above gross salary: 17.5% Social Insurance + 3% Health Insurance + 1% Unemployment Insurance + 2% Trade Union fee. This is the highest statutory employer burden among the five ASEAN markets in our payroll series (Philippines ~14-18%, Indonesia ~15-18%, Malaysia ~13-15%, Thailand ~5.5-6.5%). For high-salary employees, the effective rate drops because SI and HI contributions are capped at 20x the reference salary.
No. Vietnam does not have a statutory 13th month pay requirement. However, a Tet bonus (Lunar New Year bonus) is deeply embedded in Vietnamese work culture. Most employers pay at least one month’s salary before Tet. If the bonus is written into the employment contract or collective labor agreement, it becomes a legally enforceable obligation. For cost planning, budget for at least one month as a Tet bonus.
Resolution 110/2025/UBTVQH15 increases the taxpayer deduction from VND 11,000,000 to VND 15,500,000/month and the dependent deduction from VND 4,400,000 to VND 6,200,000/month. These deductions are subtracted from gross income (after insurance contributions) before applying progressive PIT rates. For a married employee with 2 dependents, the monthly deduction goes from VND 19.8M to VND 27.9M, meaning employees earning below that threshold pay zero PIT.
Foreign employees on a labor contract of 12 months or more pay Social Insurance and Health Insurance at the same rates as Vietnamese employees, under Article 2(2) of the Social Insurance Law 2024 and Decree 158/2025/ND-CP, which replaced Decree 143/2018/ND-CP from July 1, 2025. They are exempt from Unemployment Insurance. Intra-company transferees and employees who have reached retirement age are exempt from compulsory SI. Foreign employees can claim their SI as a lump sum when their labor contract ends or their work permit expires without renewal.
Under Vietnamese labor law, the employer’s 2% Trade Union contribution is mandatory regardless of whether employees have established a grassroots trade union. This funds the broader trade union system and labor rights infrastructure. The employee’s 1% contribution only applies if a trade union actually exists at the company. This makes Vietnam unique among the ASEAN markets in our payroll series.
Vietnam divides the country into four wage zones with different minimum monthly wages. Zone 1 (central and inner Hanoi and Ho Chi Minh City, plus parts of Hai Phong, Quang Ninh, Dong Nai and Tay Ninh) has the highest minimum at VND 5,310,000/month (2026). Zone 4 (rural areas) has the lowest at VND 3,700,000. Central Da Nang is in Zone 2. The zone determines the UI contribution cap (20x regional minimum wage) and the minimum salary floor. Employers must apply the correct zone for each employee’s work location.
This page focuses specifically on payroll mechanics: SI/HI/UI contribution rates and caps, Trade Union fees, PIT withholding with the 2026 deduction increases, compliance deadlines, and common mistakes. The EOR Vietnam page covers the broader employment picture: employment contracts under the Labour Code 2019, termination and severance, leave entitlements, work permit requirements, and the full cost of hiring through an EOR.
