True Employer Cost & Payroll Taxes in Vietnam
In Vietnam, mandatory employer on-costs add +21.5% on top of gross cash salary. Local labor law also mandates 1 extra bonus month(s) per year.
Mandatory Social Contributions & Tax Brackets in Vietnam
Full statutory schedule under official labor codes and ministry schedules.
| Fund / Contribution Name | Statutory Rate | Coverage & Purpose |
|---|---|---|
| Social Insurance Fund (Retirement & Maternity) | 17.50% | Official statutory reserve mandated under Vietnam labor code |
| Health Insurance (BHYT) | 3.00% | Official statutory reserve mandated under Vietnam labor code |
| Trade Union Fee (Kinh phí công đoàn) | 2.00% | Official statutory reserve mandated under Vietnam labor code |
| Unemployment Insurance (BHTN) | 1.00% | Official statutory reserve mandated under Vietnam labor code |
| Mandatory Annual Bonus Accrual | 8.33% | 1 additional month(s) legally mandated per year |
Hiring in Vietnam: EOR vs Setting Up a Local Legal Entity
Compare the upfront capital, timeline, and ongoing overhead for hiring in Vietnam.
- ✓ Upfront Setup Cost: $0 (No foreign capital registry required).
- ✓ Time-to-Hire: 2 to 4 business days.
- ✓ Typical Monthly Platform Fee: $369/month per employee (Deel / Remote).
- ✓ Severance & Legal Defense: Managed directly by local EOR employment lawyers.
- ✗ Upfront Setup Cost: $8,000 to $20,000 (Legal notarization, trade registry).
- ✗ Time-to-Hire: 3 to 6 months to complete local bank account and tax registration.
- ✗ Recurring Overhead: $1,500 to $2,500/month in mandatory corporate accounting and secretary fees.
- ✗ Permanent Establishment Risk: Full corporate tax nexus exposure in Vietnam.
Labor Law Compliance Notice: Vietnam Severance & Notice Protocol
Vietnam enforces strict statutory labor regulations under local labor courts. Severance risk rating: Moderate. Probationary and termination rules: 60 days probation limit for university graduates.
Frequently Answered Questions: Hiring in Vietnam
Q: What is the total employer burden rate in Vietnam for 2026?
The mandatory employer burden in Vietnam is 21.5% of the gross base salary, consisting of Social Insurance (17.5%) + Health (3%) + Unemployment (1%) + Trade Union (2%). Additionally, employers must budget an extra 8.3% monthly reserve for 1 mandated bonus month(s).
Q: Is an Employer of Record (EOR) legally recognized in Vietnam?
Yes. Tier-1 EOR platforms like Deel and Remote operate compliant locally registered entities in Vietnam. They handle all statutory social security filings, local tax withholdings, mandatory benefits, and IP assignment contracts compliant with Vietnam labor courts.
Q: When should an employer switch from an EOR to a direct legal entity in Vietnam?
For teams with 1 to 5 employees in Vietnam, an EOR ($369/month average fee) is significantly more cost-effective than registering a local subsidiary, which typically costs $8,000–$20,000 upfront plus $1,500/month in mandatory statutory accounting. The breakeven point to establish a direct local entity is typically around 12–18 full-time employees.
Q: What is the severance risk and probation protocol in Vietnam?
The severance liability rating for Vietnam is classified as "Moderate". Statutory probation and notice terms: 60 days probation limit for university graduates. EOR providers mitigate wrongful termination claims by structuring compliant probation contracts.