Vietnam is set to become one of the most efficient nations of FY22 due to its strong performance in FY21 and the fiscal measures in place for supporting small businesses and lower-income households. The nation’s GDP is heavily dependent on the manufacturing sector and exports.
The country boasts one of the lowest unemployment rates amidst the developing nations. In 2019, a meagre 2.04% of the entire workforce were without a job, while the employment-to-population rate was 68.9%. Vietnam is a world leader when it comes to cost-effective manufacturing and sourcing. Many MNCs are investing in Vietnam and banking on the country’s skilled workforce for diversifying and expanding its business.
Income subject to SI and HI contributions is each capped at 20 times the basic salary for SI and HI contributions. Effective from 1 July 2019, the basic salary is VND 1,490,000 per month. The basic salary is subject to change each year.
Income subject to UI contribution is capped at 20 times the minimum regional salaries for UI contributions. Effective from 1 January 2020, the minimum regional salaries vary from VND 3,070,000 to VND 4,420,000 per month. The minimum regional salaries are subject to change each year.
The employer is also expected to pay the employee withholding tax. Links to the source for employer payroll tax.
Vietnam follows a progressive income tax model. Link to Employee Income Tax.
Link to Employee Payroll Tax.
VND 3.070 million to 4.47 million dependent on region
Link to Vietnam Minimum Wage
Monthly or bi-monthly dependent on contract
13th month salary a.k.a Tet Bonus
Not mandatory but Vietnamese custom to pay 13th month bonus known as Tet bonus
Not more than 48 hours a week
Overtime hours cannot exceed 30 hours per month and 200 per year
Women in their seven month or later of pregnancy or a baby of less than 12 months are not allowed to work overtime
10 public holidays can be found here.
12 days paid leave plus additional 1 day for every 5 years of service
Maternity Leave: 6 months of paid-leave
Prenatal Leave: up to 5 days
Paternity Leave: 5 to 14 days
The termination process is relatively simple with reasonable notice period to be given as well as 1/2 month of pay for each year worked as severance pay. Some instances, such as enterprise operation cessation, do not need a filing.
Severance allowance of 1/2 months worth of salary for each year of employment
6 to 60 days depending on qualification and education of employee
A separate probation agreement can be signed
Probationary period applied to managerial positions of enterprise can be up to 180 days
The standard VAT in Vietnam is 10%.