Wage portage in Vietnam
At the heart of the Indochinese peninsula, Vietnam is emerging as a vibrant economic engine. In 2022, its GDP thrived, reaching 362.6 billion US dollars with a dynamic year-on-year growth of 8.02%. Foreign direct investments, up by 15.5%, reached 36.02 billion US dollars during the same period, reflecting the continued appeal of this area for international investments.
Discover how our comprehensive approach simplifies the process of wage portage in Vietnam, guiding you through crucial steps to enable your business to thrive at the core of this booming economy in Southeast Asia.
Defining the concept of wage portage in Vietnam
A company providing wage portage services is a local third-party entity positioned as an intermediary in an existing employer-employee relationship. Salveo is an official employer of record (EOR) responsible for fulfilling legal and regulatory obligations related to immigration, employment, and payroll.
The employer of record is, therefore, the legal employer of the worker but has no supervisory role over the employee’s position. The original employer maintains the substantive employment relationship, making all decisions regarding compensation, job content, development, and contract termination.
Deciphering the advantages of wage portage in Vietnam: what are they?
The services of wage portage provide a quick and adaptable solution designed to align with the specific needs and goals of your business. The benefits are numerous:
Strategic Business Advantage:
- Rapid establishment of a cost-effective local presence.
- Avoidance of complexities associated with creating and managing a local legal structure.
- Elimination of waiting periods (up to 6 months) typically required for market testing.
Focus on Core Business:
- Delegation of administrative and regulatory tasks to our service.
- Focus on essential business activities.
Building Trust and Value:
- Cultivation of trust with clients through a local presence.
- Reassurance of clients through proximity in the same time zone.
What makes our service unique: Simplifying the management of your human resources.
As an employer of record, we offer a comprehensive range of services to assist businesses of all sizes in managing their HR functions in Vietnam.
Our expertise includes:
- Drafting employment contracts compliant with Vietnamese labor laws.
- Facilitating work permits and residence permits for foreign employees.
- Streamlining payroll processes and issuing payroll statements.
- Administering social security and income tax.
- Managing paid leave.
- Handling reimbursement of professional expenses.
- Supervising end-of-contract procedures (non-renewal or termination).
- Serving as a liaison with client companies on all aspects of labor law and employment contracts.
In addition to our core services, we provide optional offerings such as recruitment, office spaces in our business centers, and comprehensive international mobility management services (apartment search, school placement, car rental, etc.).
The main aspects to consider when hiring an employee in Vietnam
Types of employment contracts in Vietnam
In Vietnam, employers must provide written employment agreements when bringing new staff on board. These contracts need to be clear and cover details like compensation, benefits, job duties, and termination guidelines for employees.
Vietnamese law offers two main types of employment contracts:
Fixed-term contract | Number of days | |
Termination notice | The notice period varies depending on the employment duration:
|
3 days 30 days |
Severance | The economic compensation following the termination depends on the employee’s seniority:
|
– ½ month of salary |
Open-ended contract | Number of days | |
Termination notice |
| 45 days |
Severance | The economic compensation following the termination depends on the employee’s seniority:
|
– ½ month of salary |
Common Probation Period Practice in Vietnam
In Vietnam, the length of the probation period differs from the type of labor contract signed and the employee’s job position. Outlined below is a comprehensive overview detailing the probationary period terms:
Probation period | Number of days | |
Fixed-term contrcat* | The probation period differs from the employee’s job position:
|
180 days 60 days 30 days 6 days |
Open-ended contract | The probation period differs from the employee’s job position:
|
180 days 60 days 30 days 6 days |
*If the fixed-term contract lasts less than the probation period, the employer has not had enough time to assess the employee’s performance and the employee has not had enough time to adjust to their new job (The employee is also not entitled to severance pay.)
Working hours and overtime in Vietnam
In Vietnam, the standard working hours for employees are 8 hours per day and 48 hours per week. According to legal requirements, employers must ensure their employees receive at least one day off each week, commonly scheduled on Sundays in typical work arrangements. Overtime is permissible but under strict conditions: typically restricted to 40 hours per month and 200 hours per year for each employee. However, in certain circumstances, an extension beyond these limits may be considered, contingent upon obtaining government approval.
The minimum overtime rates are as follows:
Working Days | Overtime compensation* |
First 2 overtime hours | 150% of the usual salary rate |
First 3 overtime hours | 200% of the usual salary rate |
First 5 overtime hours | 300% of the usual salary rate |
* Please note that these are just the minimum overtime rates required by law. Employers may choose to pay employees a higher overtime rate, but they cannot pay them less than the minimum rate.
Annual paid leave
Employees are entitled to a minimum of 12 days of paid annual leave, excluding public holidays. Additionally, for every five years of consecutive service with an employer, an employee must be granted one extra annual leave day.
National Holidays
In Vietnam, there are a total of 9 public holidays annually. Here are the specific public holidays as follows:
Holiday | Date |
New Year’s Day | 1st January |
Vietnamese New Year’s Eve | 8th January |
Vietnamese New Year | From 9th to 14th January |
Tet Holiday | 23rd -26th January |
Hung Kings Festival | 18th April |
Liberation Day/Reunification Day | 30th April |
International Labor Day | 1st May |
Day off for Liberation Day/Reunification Day | 2th September |
Independence Day Holiday | 10th October |
Minimum wage
The Vietnamese government sets the minimum wage annually, and the wage varies depending on the region. In 2023, the minimum wage in Vietnam is as follows:
Regions | Minimum Hourly wage | Minimum Monthly wage |
Region I (urban Hanoi and Ho Chi Minh City) | VND 22,500/hour (approx. USD 0.97) | VND 4,420,000/month (approx. USD 187.29) |
Region II (rural areas of Hanoi and Ho Chi Minh City, as well as the cities of Da Nang, Can Tho, and Haiphong) | VND 20,000/hour (approx. USD 0.86) | VND 3,920,000/month (approx. USD 166.08) |
Region III (Bac Giang, Bac Ninh, Hai Duong, and Vinh Phuc provinces) | VND 17,500/hour (approx. USD 0.75) | VND 3,430,000/month (approx. USD 145.30) |
Region IV (other provinces) | VND 15,600/hour (approx. USD 0.67) | VND 3,070,000/month (approx. USD 130.52) |
Employment contract Termination
An employer may terminate a labor contract for the following reasons:
- The employee has committed a serious violation of the labor contract or the law.
- The employee is unable to perform their job duties due to illness or injury.
- The employer’s business operations have changed, resulting in a reduction in workforce.
- The employer is closing down its business.
If the employer terminates the labor contract for any of these reasons, they must give the employee advance notice. The notice period varies depending on the reason for termination, but it is generally at least 30 days. The employer must also pay the employee severance pay:
- For each year of service, the employee is entitled to half a month’s salary.
- If the employee has less than one year of service, they are entitled to severance pay in the amount of their average salary for the past three months.
Receive your specialist study
+33 (0)1 84 79 17 50
09h - 18h UTC+1
22 Rue Georges Picquart75017 Paris
