Employer of Record in Vietnam
Vietnam's employer burden is among the lowest in Asia once the contribution cap is applied, but its work-permit regime rather than its payroll cost is what determines whether an Employer of Record engagement is viable.
| Employer contribution burden | Twenty-one and a half per cent of salary across social, health and unemployment insurance Vietnam Social Security https://vss.gov.vn/ · Verified 2026-07-20 · Next review 2027-01-20 |
|---|---|
| Statutory paid leave | Twelve days per year for standard conditions, rising with service Labour Code, Article one hundred thirteen · Verified 2026-07-20 · Next review 2027-01-20 |
| Statutory notice | Thirty days for definite-term contracts and forty-five days for indefinite contracts Labour Code, Article thirty-six · Verified 2026-07-20 · Next review 2027-01-20 |
| Severance allowance | Half a month of salary per year of service, offset by unemployment insurance participation Labour Code, Article forty-six · Verified 2026-07-20 · Next review 2027-01-20 |
| Contribution salary cap | Contributions capped at a statutory multiple of the base and regional minimum wages Vietnam Social Security · Verified 2026-07-20 · Next review 2027-01-20 |
| Maximum probation | Sixty days for roles requiring intermediate or higher professional qualifications Labour Code, Article twenty-five · Verified 2026-07-20 · Next review 2027-01-20 |
Employer contributions in Vietnam are split across social insurance, health insurance and unemployment insurance, each administered under Vietnam Social Security. The combined employer rate is modest by regional standards, and because contributions are capped by reference to the base salary and the regional minimum wage, the effective burden on well-paid roles falls further. That cap is the reason senior hires in Vietnam often cost proportionally less than the headline rate implies.
Regional minimum wages divide the country into zones, with the highest applying to the central districts of the largest cities and the lowest to rural provinces. The zone is determined by the place of work rather than the employer's registration, so a remote hire in a provincial town and an office hire in a metropolitan district sit on different floors. Where a role is genuinely remote, the applicable zone should be documented in the contract at the outset.
The Labour Code recognises only two contract forms in ordinary use: a definite-term contract and an indefinite-term contract. A definite-term contract may generally be renewed once before it converts to indefinite by operation of law, which makes the second renewal date a decision point rather than an administrative step. Employer of Record arrangements that quietly roll a definite-term contract past that point create an indefinite relationship with the longer notice obligation attached.
Foreign nationals need a work permit before employment begins, and the permit is tied to a specific employer and position. Because the Employer of Record is the legal employer, the permit is issued in its name, and a change of client or role usually requires a new application rather than an amendment. Timelines for the supporting documents, including criminal-record checks and legalised qualifications, are the practical constraint on start dates for expatriate hires.
Termination is more constrained than the modest severance figure suggests. The Labour Code lists the grounds on which an employer may unilaterally terminate, and terminating outside those grounds obliges the employer to reinstate the employee and pay for the period of non-work plus additional compensation. Severance allowance itself is reduced by the period during which the employee participated in unemployment insurance, so long-serving employees enrolled throughout may attract little statutory severance while still carrying full procedural protection.
Lunar New Year bonuses are customary rather than statutory, but the expectation is close to universal and turnover concentrates immediately after payment. Budgeting a Vietnamese team without provisioning for that payment is technically compliant and practically unwise. Total employer cost can be modelled with the employer cost model; if the alternative is a United States hire, see the the PEO route for US hires.
What this doesn't cover
This page sets out the statutory employer obligations for employment in Vietnam through an Employer of Record. It does not quote provider fees, does not model personal income tax withheld from the employee, and does not address the representative-office or direct-entity route, each of which changes both the cost and the permitted scope of activity. Trade-union and collective-agreement obligations can exceed the statutory floors listed here. Verification practice is set out in the our sourcing rules, and comparable markets appear on the EOR reference set.