Employer of Record & PEO in Vietnam
Hire & manage teams remotely in Vietnam without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
How NNRoad Employment & PEO Services Work?
NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in Vietnam. Registering a legal entity in Vietnam as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enable companies to hire and manage employees in Vietnam in full accordance with local labor laws in under a week.
➊ You interviews & select the candidates you want to hire in Vietnam.
➋ NNRoad arranges a local labor contract between your new employee and NNRoad.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad hires the chosen candidates locally in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Vietnam while NNRoad manages payroll & HR liabilities.
Advantages of NNRoad's Employment Services
- We are the nominal employer to hire staff selected by you
- We oversee onboarding and offboarding formalities
- We take care of payroll, benefits, and taxes
- We manage the expense claims
- We handle labor dispute cases
Employment Compliance in Vietnam
Taxes & Payroll in Vietnam
Employee Income Taxes:
Tax residents in Vietnam are subject to the individual income tax on their worldwide income. The income for this category is calculated with a progressive tax rate system.
Non-residents, on the other hand, are subject to a personal income tax at a fixed rate on income earned in Vietnam or on income related to Vietnam throughout the tax year, as well as at various different rates on non-employment income. However, this must be weighed against the rules of any applicable double taxation agreement (DTA).
Individuals can claim deductions for a number of different items, including personal allowances, health insurance premiums, and education expenses. Additionally, there are a number of tax incentives available for those who invest in
Annual taxable income (in million VND)
5%: VND0 – VND60
10%: VND60 – VND120
15%: VND120 – VND216
20%: VND216 – VND384
25%: VND384 – VND624
30%: VND624 – VND960
35%: VND960 and above
Yearly income = VND140 million
15% * 20,000,000 = 3,000,000
10% * 60,000,000 = 6,000,000
5% * 60,000,000 = 3,000,000
3,000,000+6,000,000+3,000,000 = 12,000,000
Yearly income tax = VND 12 million
Employer Costs in Vietnam
Both employers and employees in Vietnam are required to contribute to social insurance. There are three types of mandatory social security: social insurance, health insurance, and unemployment insurance.
Employers are required to make contributions to the pension fund for their employees. The amount of the contribution is a percentage of the employee’s salary, and is currently set at 5%. Employers are also required to make contributions to the health insurance and unemployment insurance funds for their employees. The amount of these contributions is a percentage of the employee’s salary, and is currently set at 3% for health insurance and 1% for unemployment insurance.
17.5% – Social insurance (including sickness, maternity, occupational diseases and accidents, retirement, and death)
3% – Health insurance
1% – Unemployment insurance
2% – Trade Union Fund (only for corporate employers)
8% – Social insurance
1.5% – Health insurance
1% – Unemployment insurance
Working Hours in Vietnam
In Vietnam, the working week typically runs from Monday to Friday, with Saturday and Sunday as the weekend. The working day usually starts at 8am and finishes at 5pm, although some businesses may operate on a shifted schedule. Overtime is relatively common and may be required during busy periods.
Employers must give employees a minimum of 1 full day off per week. Normally, the work week is Monday – Friday, 8 hours a day, 40 hours a week.
Overtime Laws & Regulations
The time and date that employees are engaged may trigger and influence overtime compensation. Weekends, public holidays, and night hours—defined as 10:00 p.m. to 6:00 a.m.—are all common triggers for overtime beyond regular working hours. If a company triggers overtime, it will be obligated to compensate employees beyond the wages outlined in their contract. The following are the percentages in excess of standard that are to be applied:
Weekday, day time: 150%
Weekend, day time: 200%
Public holidays, paid leave days: 300%
Weekday, night time: 30% above aforementioned rates
Benefits & Insurance in Vietnam
The Vietnamese insurance sector is currently dominated by state-owned enterprises, but there is an increasing number of private insurers operating in the market. The insurance industry is regulated by the Ministry of Finance.
All employees in Vietnam are required to have three forms of insurance:
- Social insurance: This sort of insurance includes a variety of benefits for employees, including sick leave, maternity leave, benefits for work-related accidents and diseases, pension allowance, and mortality allowance.
- Health insurance: This permits employees to go to authorized medical facilities for medical examinations and inpatient and outpatient treatments.
- Unemployment insurance (which will take the place of severance pay): Workers will be paid an amount based on the period of time they have worked and how much their former employers contributed. The monthly unemployment benefit is equal to 60% of the average salary earned in the previous six months.
Common Work Benefits
In Vietnam, there are a number of benefits that come with working. These include:
– Health insurance: health insurance is mandatory for all employees. This ensures that workers are able to access medical care when they need it.
– Paid vacation: All workers are entitled to 20 days of paid vacation per year. This can be used for leisure or personal travel.
– Maternity leave: Women are entitled to 12 weeks of paid maternity leave. This allows them to take time off work to care for their new child.
– paternity leave: Fathers are also entitled to 2 weeks of paid paternity leave. This helps promote gender equality in the workplace and allows fathers to spend time bonding with their new child.
– Work from home: Due to the COVID-19 pandemic, many Vietnamese workers have been able to work from home. This has been a great perk for those who are able to take advantage of it.
These are just some of the benefits that come with working in Vietnam. With a strong benefits package, it’s no wonder that more and more people are choosing to work in this Southeast Asian count
Termination Laws in Vietnam
When an employer decides to terminate an employee in Vietnam, they must do so in accordance with the provisions of the employment contract and Vietnamese labor law. The employer must first give the employee a written notice of termination, and then the employee must be given a chance to appeal the decision. If the termination is upheld, the employee is entitled to severance pay and other benefits as required by law.
If an employee dies, goes missing, loses civil capacity, reaches retirement age, is sentenced to prison, or is banned from performing the job by a court ruling, the labor contract ceases by operation of law. It also comes to an end if the company goes out of business.
The unilateral termination can be used in five situations by an employer:
- The employee does not follow the provisions of the contract, the collective bargaining agreement, or the company’s internal rules when doing the work. Employers should keep in mind that the assignment must be specified in detail in the contract. After receiving two written warnings within one month, the employee may be fired.
After a set amount of time, depending on the type of contract
- The employee has been on leave due to illness or an accident. For an indefinite contract, this is 12 months; for a definite-term contract, it is six months; and for a seasonal contract, it is half the contract duration. If the employee’s health improves after termination, the employer should think about rehiring him or her.
- The company needs to scale down or reduce staff due to fire, natural disaster.
- If an employee is called to military service, is in detention, has been sent for forced re-education or drug rehabilitation, is pregnant, or has agreed to a suspension with the employer, a labor contract can be stopped for absences of 15 days or more.
- Because of structural or technological developments, economic reasons, or a merger or consolidation, the company needs to lay off personnel.
Employers must provide employees with a minimum statutory notice period of 45 days if the contract is for an indefinite term and 30 days if the contract has a definite term.
Severance pay is available to employees who have worked for the company for more than 12 months. For each year working at the company, the severance amount is half a month’s salary. Salary is defined as the average monthly payment received by an employee over the previous six months, including all payments other than base wage.
Public Holidays in Vietnam
As a general rule, employees are entitled to paid leave on public holidays. However, there are some exceptions to this rule. For instance, employees who are required to work on public holidays may be entitled to overtime pay.
Public Holidays in Vietnam
- New Year’s Day – January 1
- Tet Nguyen Dan – From January 31 to February 4
- Hung Kings Temple Festival – April 10-11
- Reunification Day – April 30
- Labour Day – May 1-3
- National Day Holiday – September 1-2
Paid Leave in Vietnam
Employees are entitled to 12 days of paid vacation (excluding holidays) and an additional day for every five years of service
Employment Contract in Vietnam
Employers in Vietnam are required by law to sign an official employment contract with new hires. This contract reviews the terms of the employee’s compensation, benefits, and termination requirements in details. Offer letter and labor contracts should always mention the salary and bonuses (if applicable) in Vietnamese dongs.
Probation can last anywhere from 6 to 60 days, depending on the employee’s qualifications and education. During the probation term, an employee’s wage must be agreed upon by all parties, but it must be at least 85 percent of the job’s wage.
Types of Leaves in Vietnam
Employees on sick leave are entitled to a monthly benefit given by the Social Insurance Fund. The employee must provide a medical certificate from a medical facility.
Sick leave is regulated by the Labor Code. Employees are entitled to paid sick leave if they have worked for at least 12 months for the same employer. The amount of paid sick leave is based on the length of time the employee has been with the company, with a maximum of 30 days per year. Employees can carry over any unused sick leave to the next year, but it cannot be used for more than 90 days in total.
Unpaid sick leave is also an option for employees who have not worked for their current employer for at least 12 months, or who have used up all their paid sick leave. Unpaid sick leave can be taken for up to 60 days in a year.
Vietnam has one of the most generous maternity leave policies in the world, offering new mothers up to 6 months of paid time off. This is significantly higher than the global average.
This policy is part the country’s commitment to supporting families and ensuring that children have a strong start in life. It also reflects the country’s traditional values, which place a high importance on motherhood.
If new mothers have twins or triplets, they receive an additional 30 days for each child.
This policy provides much-needed support for families in Vietnam and helps to ensure that children have a strong start in life. It is also a reflection of the country’s traditional values, which place a high importance on motherhood.
A male employee who pays social insurance fees is entitled to 5 to 14 days of paternity leave. Paternity leave is paid by the Social Insurance Authority and is equal to 100 percent of the previous month’s earnings.
Employees are eligible for 20 days of parental leave per year for children under the age of three, and up to 15 days per year for children aged four to seven.
Immigration Laws in Vietnam
To work in Vietnam, foreign nationals must obtain a work visa in advance. There are different types of work visas available, depending on the type of work to be undertaken and the length of stay in the country. The application process for a work visa can be complex, so it is important to ensure that all requirements are met in order to avoid any delays or problems.
The most common type of work visa for foreigners is the Business Visa, which allows its holder to engage in commercial activities such as working for a company or setting up a business in Vietnam. Other types of work visas include the Investor Visa, which is intended for those making a long-term investment in Vietnam, and the Employment Visa, which is issued to employees of foreign companies who are posted to work in the country.
The requirements for a work visa vary depending on the type of visa and the country of origin, but all applicants will need to submit a completed application form, along with supporting documents such as a passport photograph and proof of employment or investment. In some cases, an interview may also be required. The processing time for a work visa can take up to two months, so it is important to start the application process well in advance of your intended travel date.
A foreigner must get a visa from the Vietnamese Embassy or Consulate in order to enter the country. A Vietnamese visa can be obtained in a third country or in Vietnam itself. However, to work in Vietnam and remain for an extended period, foreigners need to apply for longer-term three-month single or multiple entry visas.
The application for a work visa should ideally be filed 15 days prior to the start of the foreign worker’s employment with the provincial Ministry of Labor, Invalids, and Social Affairs (MoLISA). Work permits can take up to ten business days to process. Workers/foreigners cannot apply for a work visa on their own; they must enlist the help of their Vietnamese employers.