Employer of Record in Vietnam

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Vietnam if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Vietnam below, to avoid any compliance issues.

Employment Contract Requirements

Essential hiring details in Vietnam include:

• Job description, duties, and responsibilities
• Date of commencement (and employment duration for temporary contracts)
• Salary (as well as other compensation or benefits), payment method, and pay date
• Information on social security contributions

Onboarding Process

We can help you get a new employee started in Vietnam quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Vietnam

The standard working hours in Vietnam are 8 hours per day or 48 hours per week, and employers are encouraged to adopt a 40-hour workweek with Saturdays and Sundays off.

Overtime in Vietnam

In Vietnam, overtime is any work exceeding 48 hours per week, compensated at a rate of at least 150% of the usual salary. Weekend work pays 200% and public holidays pay 300%. Overtime is capped at 40 hours per month and 200 hours per year, with exceptions regulated by the government allowing up to 300 hours annually.

Probation Period in Vietnam

In Vietnam, probation periods vary based on qualification and position, spanning from 6 days for unskilled workers to 180 days for high-level executives, as dictated by the Labor Code. Agreed upon by both parties, this period is crucial for evaluating an employee's suitability for the role.

Setting up a local legal entity in Vietnam can be time-consuming and expensive. It often involves complex paperwork, local representation, banking, registrations, and ongoing tax filings, which isn't cost-effective if you're simply looking to hire a few employees or test the market. An Employer of Record removes these barriers entirely. Instead of spending months establishing a presence, an EOR lets you hire and onboard employees within days while staying fully compliant.

This enables faster market entry and greater agility. Whether you’re launching a pilot program, supporting a regional client, or adding specialized talent, you don't need to commit to long-term infrastructure to explore new business opportunities. The EOR handles local employment logistics while you retain day-to-day oversight of your hires. This model lets you scale up or down based on business needs, giving you more flexibility with less overhead and risk.

Managing payroll in Vietnam requires careful navigation of the country's multi-layered social security system and progressive tax structure. Employers must handle mandatory contributions including Social Insurance (17.5%), Health Insurance (3%), and Unemployment Insurance (1%), while also withholding employee contributions and Personal Income Tax according to Vietnam's progressive rates ranging from 5% to 35%.

Compliance with regional minimum wage requirements across Vietnam's four zones is essential, as is adherence to strict reporting deadlines to avoid penalties that can range from daily interest charges of 0.03% to substantial fines.

Using payroll management software like Playroll can help employers consolidate payroll data, automate complex calculations, and stay compliant with Vietnam's frequently updated regulations, reducing the risk of errors and ensuring timely submissions to government authorities.

One of the biggest risks in global hiring is payroll mismanagement. In Vietnam, even small errors in tax reporting or social contribution payments can trigger audits, fines, or reputational damage. For companies without in-country expertise, the risk isn’t worth taking. An Employer of Record removes this burden by owning the legal responsibility of payroll, executing every step with built-in compliance.

Key Ways an EOR Supports Payroll in Vietnam:

• Mitigates Compliance Risk: Oversees all legal obligations for payroll, tax filings, and recordkeeping.
• Local Regulatory Expertise: Interprets and applies Vietnam’s latest labor and tax changes in real time.
• Free Processing: Reduces mistakes in wage calculations and reporting through built
• Payroll Record Management: Maintains compliant payroll audit trails and documentation for each employee.

In Vietnam, work permits and visas are essential for employers hiring foreign workers. The process involves obtaining approvals, submitting applications, and meeting eligibility criteria such as health checks, qualifications, and background verification.

The key visa types include the LĐ1 Visa for foreign workers exempt from permits, the LĐ2 Visa for those requiring a work permit, the DN1 Visa for enterprise-related employment, and the DN2 Visa for service providers and treaty-based activities. Work permits are valid for a maximum of 2 years and are restricted to only one renewal, after which a new permit application is required. Employers must submit labor demand approval to the Department of Labor, Invalids, and Social Affairs (DoLISA) at least 30 days before the anticipated start date of foreign employment.

Foreign workers must submit their work permit application at least 15 days in advance to the relevant authorities. Employers must adhere to legal requirements and timelines to ensure compliance with Vietnamese labor laws when sponsoring foreign employees.

Mandatory Leave Entitlement in Vietnam

The annual leave entitlement in Vietnam is 12 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Vietnam

Vietnam has 7 mandatory national public holidays in a year.

Paid Time Off in Vietnam

In Vietnam, all employees, whether full-time or part-time, receive 12 working days of paid time off (PTO) annually. PTO accrues monthly at a rate of 1 day per month, with an additional day granted for every five years of employment.

Maternity Leave In Vietnam

Female employees in Vietnam are entitled to 6 months of maternity leave, extended by 1 month for twins and 2 months for triplets. During this leave, they receive maternity benefits from Social Security equivalent to 100% of their normal salary, capped at 20 times the national minimum wage.

Paternity Leave In Vietnam

Fathers in Vietnam are entitled to paternity leave, ranging from 5 days for a single child (7 days for a C-section) to 10 days for twins (14 days for a C-section).

Sick Leave In Vietnam

Employees who are ill, disabled, or on doctor-ordered leave receive an allowance from Vietnam's social insurance fund upon submission of required documentation (typically issued by public hospital doctors). The allowance rate is 75% of the employee's salary used as a basis of social security contributions. The allowance amounts are:

• 30 days per year for employees contributing to the social insurance fund for less than 15 years.
• 40 days per year for those contributing for 15 to 30 years.
• 60 days per year for those contributing for over 30 years.

Parental Leave In Vietnam

There are no legal provisions for additional parental leave.

Marriage Leave

3 days of leave at 100% pay from employer.

Marriage of a Child

1 day of leave at 100% pay from employer.

Bereavement Leave

3 days of leave at 100% pay from employer.

In Vietnam, benefits play a central role in attracting and retaining top talent. Employees often expect more than just a paycheck – they're looking for stability, healthcare coverage, pension plans, and other perks that show a company is invested in their well-being. If you're not familiar with what’s standard or required, you risk falling short. An Employer of Record helps bridge that gap by administering a locally competitive benefits package that meets both legal requirements and employee expectations.

An EOR doesn't just check boxes, they make sure your employees receive benefits that are timely, properly communicated, and well-managed from the moment they’re onboarded. From managing healthcare contributions to adjusting for regional differences in leave or bonus entitlements, an EOR acts as both a legal and operational partner. The result is a better employee experience, less administrative burden on your internal team, and greater confidence that your offer is aligned with what top candidates in Vietnam actually want and need.

Termination Process in Vietnam

Ending employment in Vietnam can be intricate as there's no at-will termination outside the probation period. Termination must adhere to statutory grounds and formal procedures, including:

• Voluntary resignation by the employee
• Dismissal during probation
• Disciplinary dismissal
• Performance-related termination due to job unsuitability

Notice Period in Vietnam

The minimum notice period in Vietnam is 3 days and varies depending on the contract type:

• 45 days for indefinite contracts
• 30 days for fixed-term contracts of 12-36 months
• 3 working days for fixed-term contracts under 12 months

Severance in Vietnam

In Vietnam, employees with over a year of service are entitled to severance pay, except for terminations for just cause. It equals half a month's wages for each year of employment, mandated by the Vietnamese Labor Code. The salary used for this calculation is the average salary of the employee over the last six months before termination. Severance payments must be made within 14 working days of the employee's termination.