To hire an employee in Vietnam you need a local legal employer, a written labor contract under the 2019 Labor Code, registration for social/health/unemployment insurance (≈ 23.5% employer cost on top of gross), monthly personal income tax withholding, and payroll in Vietnamese đồng. Without your own entity, an employer of record such as Eor.vn provides the legal employer and runs all of the above; onboarding takes 3–5 working days.
1. Employment contracts
Vietnamese law recognizes two contract types since 2021: indefinite-term and fixed-term up to 36 months. A fixed-term contract may be renewed once; after that, the relationship automatically becomes indefinite. The old "seasonal" contract is gone, and there is no such thing as a lawful perpetual chain of short contracts.
Contracts must be in writing (electronic signature is recognized) and in Vietnamese; bilingual versions are standard practice for foreign-led teams, with the Vietnamese text prevailing. Mandatory clauses include the job description, workplace, salary, payment dates, working hours, insurance and training terms.
Practice note: most foreign employers start people on a 12-month fixed term with a 60-day probation inside it, then convert to indefinite at renewal. It balances flexibility with the candidate's expectations — strong Vietnamese candidates read a direct indefinite offer as a sign of seriousness.
2. Probation
Probation is optional, capped by role, and paid at no less than 85% of full salary:
| Role type | Maximum probation |
|---|---|
| Enterprise manager positions (per the Law on Enterprises) | 180 days |
| Positions requiring a college degree or higher | 60 days |
| Technician / intermediate vocational roles | 30 days |
| Other jobs | 6 working days |
During probation, either side may walk away without notice or compensation. No probation is allowed on contracts shorter than one month — and you cannot place the same person on probation twice for the same job.
3. Working hours & overtime
The statutory maximum is 8 hours a day and 48 hours a week; the state "encourages" a 40-hour week, and most professional employers in Vietnam work Monday–Friday. Overtime requires employee consent and is capped at 40 hours a month and 200 hours a year (300 for certain listed industries).
Overtime premiums are non-negotiable floors: 150% on normal days, 200% on weekly rest days, 300% on public holidays — plus a 30% night premium for work between 22:00 and 06:00.
4. Leave & public holidays
Employees with a full year of service get at least 12 working days of paid annual leave (more for hazardous work), plus one extra day for every five years with the same employer. Unused leave must be paid out on termination.
Vietnam has 11 public holidays: New Year's Day (1), Lunar New Year — Tết (5), Hùng Kings' Commemoration (1), Reunification Day 30 April (1), Labor Day 1 May (1) and National Day 2 September (2). In 2026, Tết falls in mid-February; the exact bridge days are announced by the government each year. Foreign employees additionally get one day for their own national day and one for their traditional new year.
Other paid leave includes marriage (3 days), a child's marriage (1), and bereavement for close family (3). Female employees have extensive maternity protections: 6 months of maternity leave paid by social insurance, plus dismissal protection during pregnancy and the child's first year.
5. Salary, minimum wage & the 13th month
Salaries for Vietnamese employees must be denominated and paid in Vietnamese đồng. Regional minimum wages apply from 1 January 2026:
| Region | Covers (examples) | Minimum wage / month |
|---|---|---|
| Region I | Urban Hanoi, Ho Chi Minh City, Hai Phong, Dong Nai, Binh Duong areas | ₫5,310,000 |
| Region II | Da Nang, Can Tho, suburban Hanoi/HCMC | ₫4,730,000 |
| Region III | Provincial cities, industrial districts | ₫4,140,000 |
| Region IV | Remaining rural areas | ₫3,700,000 |
Minimums matter mostly for blue-collar payroll; professional salaries sit far above them. What foreign employers underestimate is the 13th-month salary: not required by statute, but so deeply customary that omitting it reads as a pay cut. It is typically pro-rated for the first year and paid before Tết.
Indicative gross ranges we see in 2026: experienced software engineers ₫40–75 million/month in HCMC and Hanoi; senior accountants ₫25–45 million; customer-success staff with English ₫18–30 million. Treat these as orientation, not benchmarks — we quote real numbers per role on request.
6. Mandatory insurance
Employer and employee contributions, calculated on contractual salary (capped at ₫46,800,000 for SI/HI; the unemployment cap is 20× the regional minimum wage):
| Contribution | Employer | Employee |
|---|---|---|
| Social insurance (pension, sickness, maternity, occupational risk) | 17.5% | 8% |
| Health insurance | 3% | 1.5% |
| Unemployment insurance | 1% | 1% |
| Trade union fund | 2% | — |
| Total | 23.5% | 10.5% |
Foreign employees on contracts of 12 months or more participate in social and health insurance (not unemployment). The amended Law on Social Insurance took effect on 1 July 2025 and tightened enforcement — late or under-declared contributions now surface quickly in the authorities' data matching.
7. Personal income tax
Residents are taxed on a progressive scale from 5% to 35%, applied to income after insurance contributions and family deductions. From the 2026 tax year, the personal deduction is ₫15.5 million/month plus ₫6.2 million per registered dependent. The employer withholds monthly and files the year-end finalization. Details with a fully worked example are in our payroll guide.
8. Termination & severance
Vietnam is an employee-protective jurisdiction. An employer may terminate only on grounds listed in the Labor Code — repeated documented underperformance against registered criteria, prolonged illness, restructuring, disciplinary dismissal for serious violations — and each ground has its own procedure. Notice periods: 45 days (indefinite contracts), 30 days (fixed-term 12–36 months), 3 working days (under 12 months).
Severance is half a month's salary per year of service, reduced by periods covered by unemployment insurance — in practice modest for post-2009 service, but the calculation must be exact. Restructuring triggers the higher job-loss allowance: one month per year, minimum two months.
The expensive mistake: dismissing someone "US-style" with two weeks' pay in lieu. Unlawful termination in Vietnam can mean reinstatement plus back pay plus penalties. Exits need grounds, paper and patience — or a negotiated mutual termination agreement, which is how most sensitive separations actually resolve.
9. Employees vs. contractors
Engaging Vietnamese staff as long-term "independent contractors" is the most common compliance debt foreign companies carry here. The test is substance: fixed hours, your direction, your tools, one client — that is an employment relationship regardless of what the invoice says. Reclassification brings retroactive insurance, PIT, interest and fines, landing on the company. A genuine project-based specialist with multiple clients is fine as a contractor; your full-time developer is not.
10. Entity or EOR?
If you are building a licensed commercial operation in Vietnam — invoicing locally, importing, opening shops — you will need an entity, and the 2–4 month setup is simply the cost of entry. If you are hiring a team of one to thirty people to work on your product or serve your global clients, an employer of record gets them compliantly employed this week, at a flat fee, with a clean path to transfer them to your own entity later. That second path is what Eor.vn does, exclusively, in one country.