Everything You Need to Hire And Pay Employees in Vietnam

Discover the hiring costs, salary benchmarks, and legal steps to hire and pay employees in Vietnam—your guide to smart, compliant hiring in 2025.

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If you’re considering expanding your business or hiring talent in Vietnam, you’re in good company. Vietnam has become a hotspot for global companies seeking skilled professionals and cost-effective operations.

As of 2024, Vietnam’s labor force includes nearly 53 million people, with a significant portion holding degrees or certifications. The country’s unemployment rate has dropped to 2.24%, reflecting a robust and resilient workforce.

One of the key attractions for businesses is the competitive salary landscape. The average monthly salary in Vietnam is approximately 7.5 million VND (around $300 USD), making it an appealing destination for companies looking to optimize labor costs.

However, navigating the hiring process in Vietnam involves understanding local employment laws, salary structures, and compliance requirements. From drafting employment contracts to managing payroll and benefits, there are several factors to consider to ensure a smooth operation.

In this guide, we’ll walk you through everything you need to know to hire and pay employees in Vietnam, providing practical insights to help you make informed decisions for your business expansion.

Why Hire Employees in Vietnam?

If you’re looking to hire employees in Vietnam, you’re tapping into one of Southeast Asia’s fastest-growing economies. Vietnam offers a young, tech-savvy workforce, competitive salaries, and a supportive business environment—making it an ideal location for expanding your team or setting up new operations.

A Growing Talent Pool

Vietnam’s workforce is large and increasingly well-educated. With over 50 million workers and rising university graduation rates, it’s getting easier to hire talent with the right skills—especially in tech, finance, and customer support. Whether you’re looking to hire a remote employee in Vietnam or establish a full-time local team, the talent is there.

Competitive Hiring Costs

Hiring costs in Vietnam are notably lower compared to Western markets. The average monthly salary for a full-time employee in Vietnam hovers around $300–$700 USD, depending on the role and region. Beyond the base salary, employers in Vietnam must also factor in costs like:

  • Social insurance contributions
  • Health insurance and unemployment insurance
  • Paid leave and public holidays
  • Overtime pay for hours worked beyond the standard 48 hours per week

Why Businesses Want to Hire and Pay Employees in Vietnam

From startups to large enterprises, companies are increasingly looking to hire and pay employees in Vietnam for its balance of affordability and talent. Hiring employees also allows businesses to gain a strong local presence, comply with employment laws in Vietnam, and better connect with the Southeast Asian market.

Local Laws and Compliance Matter

Employment laws in Vietnam are clear but must be followed closely. Every employee in Vietnam is entitled to a written employment contract, fair working hours (typically 8 hours per day or 48 hours per week), and benefits such as maternity leave, severance pay, and social security.

Understanding how to pay employees in Vietnam also involves managing taxes, payroll cycles, and compliance with income tax and labor regulations. Employers in Vietnam are required to contribute to several government-mandated programs, which affect the total cost of hiring.

Hiring Costs: What You Need to Know Before You Hire in Vietnam

When planning to hire in Vietnam, understanding the full scope of hiring costs is essential. It’s not just about the base salary—employers in Vietnam are required to provide a range of benefits and contributions that go beyond take-home pay. Whether you’re hiring remote employees or setting up a local team, getting familiar with these expenses helps you budget better and stay compliant with local laws.

1. Base Salary and Cost of Living

The base salary for an employee in Vietnam varies by industry, region, and experience. In major cities like Ho Chi Minh City or Hanoi, the cost of living is higher, so salaries tend to reflect that. The average salary in Vietnam ranges between $300–$700 USD per month for mid-level roles, but skilled talent in tech or engineering may command higher rates.

Employers should also understand that Vietnamese employees may negotiate for a higher salary to offset the rising cost of living, especially in urban centers.

2. Social Security and Insurance Contributions

Employers in Vietnam must contribute to three key funds:

  • Social Insurance
  • Health Insurance
  • Unemployment Insurance

Together, these contributions typically add around 21.5% to the employee’s gross salary. Employees also contribute a portion (10.5%), deducted from their monthly salary. These contributions are mandatory in Vietnam and fund essential benefits like healthcare, maternity leave, and pensions.

3. Paid Leave and Public Holidays

Vietnamese employees are entitled to:

  • 12 days of paid annual leave, increasing with years of service
  • At least 10 public holidays per year
  • Maternity leave (6 months for pregnant employees, with additional leave for multiple births)

Employers in Vietnam must provide these benefits and plan work schedules accordingly.

4. Overtime Pay and Working Hours in Vietnam

Working hours in Vietnam are capped at 48 hours per week, usually spread across six days (8 hours per day). Employees who work beyond this are entitled to overtime pay, which varies:

  • 150% of the hourly wage on weekdays
  • 200% on weekends
  • 300% on public holidays

Overtime regulations apply to both full-time and part-time employees, and compliance is closely monitored.

5. Severance and Termination

If a Vietnamese employee is terminated (under lawful conditions), employers are required to pay severance. Employees who have worked for 12 months or more are entitled to half a month’s salary for each year of service, unless the termination is due to misconduct. Employers must also notify the employee in advance, following specific legal timelines.

Employment Laws and Payroll in Vietnam

Once you’re ready to hire employees in Vietnam, the next step is understanding how to legally structure the employment relationship and manage payroll. From contracts to tax withholdings, knowing what’s required helps protect both the employer and employee—and keeps your business compliant with local laws in Vietnam.

Employment Contracts

In Vietnam, a written employment contract is mandatory for all hires, whether local or remote employees. This contract must clearly state:

  • Job title and description
  • Work location
  • Salary and benefits
  • Working hours
  • Duration of the contract (definite or indefinite)
  • Conditions for termination

This is the foundation of any employer and employee relationship in Vietnam. Contracts must be in Vietnamese (or bilingual if needed) and signed before the employee begins work.

Payroll in Vietnam

The payroll cycle in Vietnam is typically monthly, and employers are responsible for:

  • Withholding income tax
  • Calculating and paying social insurance, health insurance, and unemployment contributions
  • Issuing monthly payslips and maintaining payroll records

To pay employees in Vietnam correctly, you’ll need to stay updated on contribution rates and ensure all taxes and deductions are submitted on time. Mistakes or delays can lead to fines and legal complications.

Income Tax in Vietnam

Income tax in Vietnam is progressive, ranging from 5% to 35% depending on the employee’s income. Employers must:

  • Register each employee with the tax authorities
  • Deduct personal income tax from salaries
  • Submit monthly tax declarations

Employees must also file annual tax returns, though employers often assist with this process.

Social Security in Vietnam

Social security in Vietnam includes contributions to:

  • Social Insurance (retirement, sickness, maternity leave)
  • Health Insurance
  • Unemployment Insurance

Employers contribute about 21.5%, and employees contribute 10.5% of their monthly salary. These contributions are required whether you’re hiring a new employee or managing long-term staff.

Hiring Vietnamese Employees vs. Contractors

Hiring full-time employees in Vietnam means providing full benefits and following all labor laws. However, some companies choose to work with contractors in Vietnam to reduce overhead. Be cautious—misclassifying employees as contractors can lead to penalties.

If you’re hiring an employee in Vietnam and want a flexible setup, consider using a local payroll provider or Employer of Record (EOR). This can make it easier for you to hire talent while ensuring compliance with local employment laws.

Top Job Roles To Hire in Vietnam

Vietnam’s tech talent pool is growing fast, making it a great place to hire for specialized roles. Whether you’re scaling a startup or building out an engineering team, here are some of the most in-demand roles you can fill in Vietnam:

  • AI & Machine Learning Specialists – Ideal for developing intelligent systems and automation tools.
  • C++ Embedded Systems Engineers – Skilled in building low-level software for hardware-focused products.
  • Blockchain Developers – Experienced with smart contracts and decentralized applications.
  • Game Developers – A strong gaming industry presence makes Vietnam a hotspot for Unity and Unreal Engine experts.
  • Data Engineers & Analysts – Crucial for businesses focused on analytics, data pipelines, and BI tools.
  • Firmware Engineers – Perfect for IoT and hardware integration projects.
  • Cybersecurity Specialists – Protect your systems with experts trained in modern threat detection.
  • DevOps Engineers (Kubernetes / Cloud) – Optimize your CI/CD pipelines and cloud infrastructure.
  • GoLang Developers – Efficient backend developers, great for microservices architecture.
  • Ruby on Rails Developers – Ideal for rapid web application development.

Ready to Hire in Vietnam?

Hiring in Vietnam offers big opportunities—whether you’re expanding your presence in Southeast Asia, hiring remote employees, or tapping into fresh talent in Vietnam. But success depends on understanding employment laws, benefits, payroll, and how to pay employees in Vietnam correctly.

From managing an employment contract to navigating holidays in Vietnam and handling maternity leave or severance pay, there’s a lot to consider. That’s where we come in.

If you’re looking to hire employees in Vietnam and need help managing compliance, payroll, or onboarding through an Employer of Record (EOR) or outsourcing solution, we can make it easy for you to hire. We’ll help you hire and pay employees in Vietnam quickly, while staying aligned with local laws and business practices.

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