Vietnam 9 min

Employee benefits in Vietnam: all you need to know

Written by Rhiannon Payne
Rhiannon Payne


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As one of Asia’s top outsourcing destinations — particularly in the ICT sector — Vietnam is a great place to hire. 

But to attract the top talent in places like Hanoi and Ho Chi Minh City, you need to offer a compensation plan that is attractive, competitive, and — crucially — fully compliant with Vietnamese employment laws. After all, you don’t want to accidentally misclassify your people and face penalties and fines.

To save you time and streamline the process, we’ve broken down everything you need to know about employee benefits in Vietnam. This guide will help you choose the most desirable benefits and then set them up and manage them — all while staying within the lines.

So let’s begin.

Who is entitled to benefits in Vietnam?

In Vietnam, all full-time employees are entitled to statutory benefits, including employees on short-term contracts.

What about independent contractors?

Independent contractors are classified differently to employees. However, given recent revisions to the Vietnamese Labor Code, contractors can — in some limited cases — qualify for statutory benefits.

You can still choose to offer benefits to any independent contractors that you’re working with, but be careful. If the authorities believe that you’re misclassifying contractors as employees (or vice versa), you could receive significant fines and penalties, and potentially even be restricted from doing business in Vietnam.

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So what kind of benefits should you offer your Vietnamese workforce?

Statutory and common employee benefits in Vietnam

As in most countries, certain employee benefits — such as leave entitlement and minimum wage — are protected by law. As a minimum, you are required to provide:

Minimum wage

In Vietnam, the monthly minimum wage varies by region. In areas with a higher cost of living, such as Hanoi and Ho Chi Minh City, the minimum base salary is ₫4.68 million (around $200) per month.

These minimum wages apply to all sectors and industries, and are based on a number of factors. However, these figures are way below what is expected in some sectors. For example, in 2020, the average salary for Vietnam-based employees in the ICT sector was ₫18 million per month — four times higher than the top regional minimum wage.

Working hours and overtime

The Vietnamese workday is deemed to be eight hours long, with a workweek of 48 hours.

Overtime may be permitted in the employment contract, but cannot exceed four hours per day, 40 hours per month, or 200 hours annually. Some industries have exceptions and allow up to 300 hours of overtime a year.

Any overtime hours rendered during daytime hours are paid at 150% of the base rate on weekdays, and 200% on weekends. Overtime hours rendered during public holidays (or paid leave periods) are paid at 300% of the base rate. Any overtime that is rendered during nighttime hours is subject to an extra 30%.

Note that some employees cannot request overtime; namely women in their seventh month of pregnancy, or parents with children under one year old.

Social security contributions

In Vietnam, social security contributions go to three funds: social insurance, health, and unemployment.

As an employer, you are responsible for contributing 17.5% of your employee’s salary to social insurance, 3% to health insurance, and 1% to unemployment. Your employees are likewise required to contribute 8%, 1.5%, and 1%, respectively.

In some cases, foreign employers may not be required to contribute to the social insurance and unemployment funds.

Employees in Vietnam are entitled to a minimum of 12 paid vacation days each year. They are also entitled to an extra paid day for every five years served under the same employer.

Note that employees who work in hazardous environments are entitled to an extra 2 to 4 days of paid leave each year.

Maternity and paternity leave

New mothers are entitled to 100% pay for six months of maternity leave (including two months’ worth of salary in a lump sum), or between 10 and 50 days in case of miscarriage or termination of pregnancy.

New fathers are granted five to 14 days of paid leave depending on the circumstances, such as the type of birth and the number of children.

Notice of termination and proper severance

In cases of termination, you are required to provide 30 days’ notice for fixed-term contracts, and 45 days for indefinite contracts. Severance pay is typically two weeks’ worth of base salary for every year of tenure, or, if the termination is related to technological or structural changes within your business, a month’s full salary.

Common benefits in Vietnam

You should also understand which benefits are offered as standard in Vietnam. These are not necessarily required by law, but candidates will expect you to provide them. They include:

  • Holiday bonuses

  • Allowances and stipends for housing and commuting

  • Health fringe benefits like club memberships

  • Additional coverage for health and life insurance

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Supplemental benefits to consider for Vietnamese employees

The benefits listed so far are either mandated by law, or expected as a bare minimum. However, to attract and retain the best talent — and get a leg up on your competitors — you need to go beyond the basic requirements. This is where supplemental benefits come into play.

A robust, modern benefits stack can be a key decision-maker for potential hires, and ensures that your existing employees feel valued and motivated at your company.

Some of the most attractive benefits you can offer your Vietnamese workforce include:

Supplemental insurance

Vietnam’s mandatory insurance contributions only cover health and unemployment. You can supplement these with personal and disability insurance, as well as additional perks and benefits. 

To provide this benefit, you will typically need to work with a private HMO provider on top of the relevant government agencies.

Stipends and development programs

While housing allowances and transportation stipends are common in Vietnam, your employees will either be telecommuting or working from home full-time.

Focus on aligning your allowances and stipends to support this unique working arrangement. For example, you can cover (or partially cover) home office supplies and equipment, or work with local coworking businesses to provide monthly allowances.

Additional soft benefits

You don’t need to break the bank to offer appealing, valuable benefits, especially if you’re a small business. You can easily customize soft, remote-tailored benefits, such as:

  • Flexible work hours. Genuine flexitime is invaluable for remote employees. A flexible or asynchronous schedule allows them to schedule their lives more efficiently, and ensures that they don’t have to work unsocial hours to align with a global team.

  • Opportunities for growth. Globally distributed teams are, by nature, more diverse. This can easily become a selling point for remote employees who are interested in working with teammates from different cultures and with different viewpoints, and developing their soft and hard skills.

These kinds of benefits provide long-term value, and reflect positively on your employer brand. They show potential hires and existing employees that you are focused on investing in their engagement, and in tune with what makes their working situation unique.

How to set up and manage benefits for Vietnamese employees

Once you’ve decided what your benefits stack is going to look like for your Vietnamese workforce, you need to put the wheels in motion. This is where things can start to get tricky.

First, you need to walk the tightrope between your employees’ needs and your in-house resources. If you’re a smaller organization trying to scale through outsourcing, you can easily get bogged down in costly benefits packages.

And then there’s the issue of compliance. If you accidentally fall foul of the rules along the way, you can incur fines and penalties, and significantly damage your growth.

When you then factor in the process of setting up payroll, managing leave entitlements, and getting to grips with the whole whirlpool of tax consequences and obligations... well, it can all start to get a little daunting.

Which is why it’s a good idea to let a global employment services provider — like Remote — do all the heavy lifting for you.

In particular, our employer of record (EOR) service allows you to quickly and conveniently manage all the intricacies of your Vietnamese operation, including:

  • Organizing payroll and leave

  • Distributing local employment taxes

  • Maintaining compliance with statutory and supplementary benefits

  • Offering competitive global compensation packages

  • Scaling your team

All you have to do is focus on hiring the right people for your organization, and our team of local, in-house, on-the-ground experts will guide you the rest of the way.

Staying compliant with Remote

There you have it. When it comes to offering benefits to your Vietnam-based employees and new hires, it doesn’t have to be a stressful experience.

However, Vietnamese employment laws can be complex, and — as with any country — subject to change. This can make it difficult to know if your business is doing everything by the book.

To make sure you don’t encounter any nasty surprises, check out our detailed process for hiring and managing international employees. Not only will you save yourself time, headaches, and, potentially, a world of legal trouble, but you’ll be free to focus your energy on standing out in a competitive, remote-first world.

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