The Payroll System in Vietnam Simplified
Outsource your Payroll in Vietnam
Companies that are operating in the Vietnamese market must comply with the local tax laws or suffer legal penalties. SMEs (small and medium-sized enterprises), multinational corporations, and representative offices all benefit from using external payroll services from providers, like NNRoad, to comply with Vietnam’s complex tax laws and ensure accuracy. Keep reading as we discuss more about payroll in Vietnam.
- Salary Structure in Vietnam’s Market
- Government Mandated Tax Requirements
- Why Hire a Payroll Provider in Vietnam
Salary Structure in Vietnam’s Market
In Vietnam, employees typically get paid on a monthly basis in Vietnamese Dong (VND). Foreign companies should be aware of conditions for minimum wages and overtime. Effective January 1st, 2020, the Vietnamese government has set a minimum wage ranging from VND 3.07 million ($ 130.30 USD) to VND 4.42 million ($191.91 USD) a month. Each tier of the minimum wage range varies on the region where a company is based. However, white collar professions salaries are higher than this.
To see a break down of the minimum wage rates in each region, check out our blog post: How to Hire an Employee in Vietnam
A 13th month’s salary is usually given as a kind of “annual bonus” by both local and foreign companies in Vietnam to employees that have worked with the company for at least one year as way to incentivize hard work and boost company morale.
Government Mandated Tax Requirements
In addition to wages and bonuses, businesses must consider personal income taxes and social security. Personal income tax is deducted from an employee’s gross monthly salary. While personal income tax is deducted from the employee’s salary, it is paid by the employer on behalf of the employee. If you are interested in learning about specific personal income tax rates in Vietnam, check out this blog post here: How to Hire an Employee in Vietnam
Employees and employers are required by the Vietnamese government to make contributions to three social security programs: social insurance, health insurance, and unemployment insurance. Foreign employees are only required to contribute to health insurance. If you are interested in learning what the social security contribution rates are in Vietnam, check this blog post here: How to Hire an Employee in Vietnam
Why Hire a Payroll Provider in Vietnam
Companies operating in Vietnam may find it challenging to deal with the complexities of the country’s tax system. By choosing NNRoad as your payroll provider, we will handle all your payroll and tax administration needs so you’ll have more time to focus on your core business. If your company does not already have an entity in Vietnam, we also offer services to help you legally hire employees, set-up a wholly owned entity, and provide benefits administration services there. Contact us today!