As of April 2026, Vietnam remains one of Southeast Asia’s most dynamic hiring markets, driven by a young, highly educated workforce, competitive labour costs, and a government actively courting foreign direct investment. But managing payroll here requires precise compliance with the Vietnam Social Insurance Law, the Personal Income Tax (PIT) Law, and mandatory social insurance contribution frameworks that place substantial obligations on both employers and employees.
A Payroll Vietnam provider operating as Employer of Record manages monthly PIT withholding, social insurance remittances to the Vietnam Social Security (VSS) portal, and trade union fee management, giving your organisation a fully compliant Vietnam workforce without the need to register a local entity.
The EOR Model in the 2026 Vietnamese Context
Vietnam’s 2026 payroll environment is defined by VSS’s enhanced digital enforcement, the Ministry of Labour’s expanded scope of employment contract requirements, and the continued application of the Labour Code 2019. An EOR in Vietnam maintains real-time registration with VSS, the General Department of Taxation (GDT), and relevant municipal labour departments, ensuring filings are completed within statutory deadlines.
Strategic Advantages for 2026
- PIT Withholding Compliance: Vietnam’s progressive PIT system requires monthly withholding at the applicable rate. An EOR correctly applies the individual deduction (HDT 11 million/month) and dependent deductions to calculate net taxable income.
- Social Insurance Mastery: Total social insurance comprises three components, Social Insurance (SI), Health Insurance (HI), and Unemployment Insurance (UI). An EOR manages remittance of all three to VSS by the last day of each month.
- 13th Month Bonus Governance: While not legally mandated by the Labour Code, a 13th-month payment is standard practice and referenced in most employment contracts. An EOR factors this into annual payroll planning and tax calculation.
- Trade Union Fee Compliance: Employers must contribute 2% of the payroll fund to the Vietnam General Confederation of Labour (VGCL), even in the absence of a workplace trade union. An EOR manages this remittance accurately.
- Probationary Period Accuracy: Labour Code 2019 limits probation periods to 60 days for roles requiring professional or technical qualifications, 30 days for others, and 6 days for basic labour. An EOR ensures contracts are structured correctly.
2026 Personal Income Tax (PIT) Brackets
Vietnam applies a 7-bracket progressive PIT system to monthly taxable income after personal and dependent deductions.
|
Monthly Taxable Income (VND) |
2026 PIT Rate |
|
Up to 5,000,000 |
5% |
|
5,000,001 – 10,000,000 |
10% |
|
10,000,001 – 18,000,000 |
15% |
|
18,000,001 – 32,000,000 |
20% |
|
32,000,001 – 52,000,000 |
25% |
|
52,000,001 – 80,000,000 |
30% |
|
Above 80,000,000 |
35% |
Statutory Contributions (2026)
|
Contribution Type |
Employer Rate |
Employee Rate |
|
Social Insurance (SI) |
17.5% |
8.0% |
|
Health Insurance (HI) |
3.0% |
1.5% |
|
Unemployment Insurance (UI) |
1.0% |
1.0% |
|
Trade Union Fee |
2.0% |
1.0% |
|
Total |
23.5% |
11.5% |
2026 Work Standards and Leave Entitlements
The Labour Code 2019 sets maximum working hours at 48 per week (8 hours per day, 6 days), with overtime capped at 40 hours per month and 200 hours per year (300 hours in certain permitted industries).
- Annual Leave: 12 days per year after 12 months of employment, increasing by 1 day for every 5 years of service. Employees in heavy, hazardous, or remote work categories receive 14 or 16 days.
- Sick Leave: 30 days per year if the employee has paid SI for under 15 years, increasing to 40 days for 15-30 years, and 60 days for over 30 years. Funded through VSS, not the employer.
- Maternity Leave: 6 months of fully paid maternity leave, funded by VSS at the rate of the employee’s average monthly salary used for SI contributions.
- Public Holidays: 11 national public holidays per year. Overtime worked on public holidays is compensated at 300% of the ordinary hourly rate.
Termination and Severance Governance (2026)
- Notice Period: 45 days for indefinite-term contracts, 30 days for definite-term contracts of 12-36 months, and 3 working days for definite-term contracts under 12 months.
- Severance Allowance: Employees with at least 12 months of service receive 0.5 months’ average salary per year of service, covering the period before 2009 when SI unemployment insurance was introduced.
- Unlawful Termination: Employers who terminate without valid grounds must reinstate the employee, pay back wages for the period of non-employment, and compensate at least 2 months’ salary.
Conclusion
Vietnam’s payroll framework in 2026 is well-structured but operationally demanding, particularly the three-way social insurance split and the monthly VSS and GDT filing requirements. The Vietnam General Department of Taxation and Vietnam Social Security portal are the primary compliance references. An EOR partner removes the need for a local entity and ensures your Vietnam team is hired compliantly from day one.