Vietnam Payroll & Benefits: What U.S. Employers Should Know

Admin Team September 12, 2024

A clear, founder-friendly guide to paying Vietnamese remote talent — legally and competitively.

Hiring remote talent in Vietnam is one of the smartest moves U.S. startups and scaling companies can make in 2025. The cost savings, work ethic, and depth of engineering and design talent are hard to beat.

But there’s one thing that often trips up founders: 👉 How do you pay Vietnamese employees properly — and what benefits are expected?

Whether you're hiring your first remote developer in Ho Chi Minh City or scaling a cross-functional team, understanding Vietnam’s payroll and benefits landscape is key to staying compliant and competitive. Here’s everything you need to know.

💸 Vietnam Payroll: The Basics

If you're hiring full-time remote employees in Vietnam (not just freelancers or contractors), you need to follow local labor and tax regulations. That includes:

1. Monthly Payroll Cycle

Most employees are paid monthly, usually at the end of the month.
A 13th-month bonus is common — more on that below.

2. Standard Work Week

40 to 48 hours/week (5.5 or 6 days) is considered full-time.
Overtime laws kick in beyond these limits.

3. Currency

Payroll is paid in Vietnamese Dong (VND) by default, though some international firms negotiate USD-equivalent rates with local conversion.

💡 Pro Tip: You can use an Employer of Record (EOR) service like VietAssist to handle payroll in local currency, with automated conversions and tax compliance.

🧾 Mandatory Employer Contributions

In Vietnam, employers must contribute to social insurance funds on behalf of employees. Here’s the breakdown:

Type of Insurance	Employer Contribution	Employee Contribution
Social Insurance	17.5%	8%
Health Insurance	3%	1.5%
Unemployment Insurance	1%	1%
Total	21.5%	10.5%

These are calculated based on the employee’s gross monthly salary, capped at certain thresholds.

⚠️ Skipping these contributions can lead to legal exposure — especially if the employee works full-time.

🎁 Common (and Expected) Benefits in Vietnam

To attract and retain top Vietnamese talent — especially engineers, designers, and marketers — you’ll want to offer more than the bare minimum. Here are the most standard and competitive benefits:

13th-Month Salary
Effectively a bonus equal to one month’s salary, paid around Lunar New Year (Tết). Expected by most employees, especially in tech.
Paid Leave
Minimum 12 days/year (increases with tenure). Public holidays: Vietnam observes 11 public holidays.
Health Insurance Top-Ups
The mandatory government health plan is basic. Many competitive employers offer private health insurance, often under group plans.
Flexible Work & Remote Allowance
Post-COVID, remote/hybrid is widely accepted. A monthly stipend for internet or coworking space is appreciated.
Career Growth Opportunities
Vietnamese professionals value training, mentorship, and upskilling — especially from U.S.-based managers. Offering an L&D budget or access to courses makes your offer stand out.

🛡️ Legal Compliance: Employee vs. Contractor

You may be tempted to start with a contractor to "keep it simple." But if they’re:

Working fixed hours
Reporting to a U.S. manager
Using your tools and processes
Paid regularly

… then legally, they may be considered an employee under Vietnamese law — even if your contract says otherwise.

✅ The safest (and most scalable) way to stay compliant is to use an EOR partner that acts as the legal employer of record in Vietnam.

🧩 What an EOR Like VietAssist Handles for You

When you hire through an EOR, you get all the benefits of full-time employment — without setting up a legal entity in Vietnam. We handle:

Drafting compliant local contracts
Running monthly payroll (including taxes and insurance)
Offering benefits and bonuses
Managing paid time off, sick leave, and holidays
Providing termination support and severance compliance

You retain full control over the employee's work — we handle the legal backend.

📈 Final Thought: Payroll Isn't Just a Legal Requirement — It's a Talent Strategy

In fast-growing markets like Vietnam, the best talent can work anywhere. Offering competitive, compliant, and thoughtful payroll and benefits shows that you’re a serious employer — even without a local office. With the right partner, you can: