Employer of Record in Vietnam

An Employer of Record in Vietnam acts as the legal employer, managing contracts, payroll, and statutory compliance on your behalf.

Vietnam's Labor Code of 2019 requires mandatory social insurance registration within 30 days of hiring, bilingual employment contracts, and accurate regional minimum wage tracking across four wage zones.

• Hiring speed: EOR engagement takes 2–4 weeks versus 3–6 months for entity setup.
• Employer statutory contribution rate: 23.5%, including a 2% trade union fee.
• Standard notice period: 45 days for indefinite-term contracts.
• January 2026 regional minimum wage (Region 1): VND 5,310,000 per month.

This page covers hiring options, employment law, payroll obligations, visa requirements, termination rules, and recent regulatory changes in Vietnam.

Gloroots is an Employer of Record provider operating in Vietnam. This guide is written to help readers evaluate all available paths, not only to promote Gloroots as a solution.

What Is an Employer of Record in Vietnam?

An EOR becomes the statutory employer in Vietnam, signing employment contracts, registering with Vietnam Social Security (VSS), and remitting personal income tax and social contributions on behalf of the client company.

Companies use an EOR when entering Vietnam without a local entity, scaling teams quickly, or converting contractors to full employees.

In practice, the client selects a candidate, the EOR issues a bilingual Vietnamese employment contract, registers the employee with VSS within 30 days, runs monthly VND payroll, withholds personal income tax, and manages day-to-day HR queries while the client retains full operational direction. To understand the underlying mechanics, see how does EOR work.

Your Hiring Options in Vietnam: EOR vs. Entity vs. PEO vs. Contractor

Companies hiring in Vietnam have four practical paths: an Employer of Record (EOR), a direct legal entity such as a WFOE or Joint Venture, a Professional Employer Organization (PEO), or independent contractor engagement. Each path carries different setup requirements, compliance obligations, and cost structures.

An EOR suits companies with no Vietnamese entity, a small-to-medium headcount, or a need to hire quickly while testing the market. Gloroots EOR services cover contracts, payroll, and statutory filings without requiring entity registration.

A direct entity or PEO fits large, long-term operations. A PEO specifically requires the client company to already hold a registered Vietnamese entity, since the PEO co-employs staff under that existing structure rather than acting as the legal employer of record.

Path	Setup Time	Compliance Ownership	Cost Structure	Best For
EOR	2–4 weeks	EOR provider	Monthly per-employee fee	Fast entry, no local entity, small-to-medium teams
WFOE / JV Entity	3–6 months	Client company	High upfront capital plus ongoing admin	Large, long-term operations requiring local revenue generation
PEO	Weeks (entity required first)	Shared between PEO and client	Per-employee fee plus entity costs	Companies with an existing Vietnamese entity seeking HR support
Independent Contractor	Days	Contractor	Project or hourly rate	Short-term, project-based work with low misclassification risk

The right path depends on headcount size, timeline, and whether a Vietnamese entity already exists. For most companies entering Vietnam without prior registration, an EOR provides the most direct route to compliant employment.

How to Hire in Vietnam Through an EOR: Step by Step

Hiring through an EOR in Vietnam follows a structured six-step sequence, from the initial decision to engage through to ongoing employment management and, where needed, offboarding.

Step 1: Define the role and confirm EOR scope

Identify the position, seniority level, and employment terms. Confirm that the role falls within the EOR's coverage and that the engagement model fits Vietnamese labor law requirements for the intended work type.

Step 2: Review and sign the client services agreement

The EOR and the client company sign a master services agreement. This document sets out responsibilities for payroll, compliance, benefits, and termination procedures. It also defines the fee structure and service terms.

Step 3: Draft and issue the employment contract

The EOR issues a locally compliant employment contract in Vietnamese, or a bilingual version, as required under the Labor Code of 2019. The contract specifies role, salary, working hours, leave entitlements, and termination clauses.

Step 4: Register the employee with Vietnamese authorities

The EOR registers the employee with the Vietnam Social Security (VSS) authority for social insurance, health insurance, and unemployment insurance. Tax registration with the General Department of Taxation is also completed at this stage.

Step 5: Run payroll and manage statutory contributions

The EOR processes monthly payroll in Vietnamese Dong, withholds personal income tax, and remits employer and employee social insurance contributions on schedule. Payslips are issued and records are maintained for audit purposes.

Step 6: Manage ongoing employment and offboarding

The EOR handles leave tracking, contract amendments, and any required notifications to labor authorities during the employment period. If the engagement ends, the EOR manages the termination process in line with Vietnamese severance and notice requirements.

Step 1: Decide Between EOR and Direct Entity

Assess your headcount size, market-testing intent, and timeline. If you plan to employ fewer than 20 people or need to hire within three months, an EOR is typically faster and lower-risk than registering a WFOE.

Step 2: Select and Vet an EOR Provider

Confirm the provider holds its own Vietnamese legal entity rather than relying on a partner network. Verify VSS registration capability and review its Personal Income Tax filing track record before signing.

Step 3: Draft and Sign a Compliant Employment Contract

The contract must be written in Vietnamese. A bilingual English version is permitted. It must specify the role, salary in VND, working hours, probation period, and termination clauses. Indefinite and definite contracts (one to 36 months) are both available.

Step 4: Register Employee with Statutory Authorities

The EOR registers the employee with Vietnam Social Security (VSS) within 30 days of the start date and obtains a Tax Identification Number. For foreign nationals, DoLISA work permit verification is required before contract execution.

Step 5: Run Monthly Compliant Payroll

Gloroots processes monthly VND payroll, withholds PIT using progressive brackets, and remits employer contributions of 23.5% alongside employee contributions of 8% for pension (from July 2025). Monthly reports are filed with the General Department of Taxation by the 20th of the following month.

Step 6: Manage Offboarding and Exit

Gloroots issues the statutory 45-day notice for indefinite contracts, calculates severance at 0.5 months per year of service, and settles final wages within 7 working days. The employee is then deregistered from VSS and issued an employment certificate.

How to Choose the Right EOR in Vietnam

Six criteria help companies evaluate any EOR provider in Vietnam before signing a contract. Apply each one regardless of which vendor you are assessing.

• Local legal knowledge: The provider should demonstrate direct familiarity with the Labor Code of 2019, regional minimum wage schedules, and Vietnam Social Security registration requirements.
• Own entity vs. partner network: Confirm whether the EOR operates through its own registered Vietnamese entity or relies on third-party partners, which can add liability and slow communication.
• Support model: Identify whether you will have a named account owner or be routed through a shared support queue. Human-led operations reduce resolution time on payroll and compliance issues.
• Pricing transparency: Request a full cost breakdown, including statutory contributions, before committing. Predictable, country-specific pricing makes workforce budgeting more reliable.
• Data security: Verify that the provider meets applicable data protection standards for cross-border employee data transfers involving Vietnam.
• Integration capability: Check whether the EOR platform connects with your existing HRIS or finance tools to maintain centralized governance over headcount and payroll data.

Reviewing these criteria against any shortlisted provider gives you a consistent basis for comparison. For a broader evaluation framework, see this guide on choosing the best employer of record for your business.

Local Legal Knowledge and Entity Status

Confirm that the EOR holds its own registered Vietnamese entity. Providers that rely on a local partner network introduce an additional layer of legal liability and communication delay between you and the employer of record.

Support Model and Language Capability

Verify that the EOR provides Vietnamese-language HR support for employees and English-language account management for clients, with defined SLA response times for each channel.

Pricing Transparency

Request itemized pricing that covers the monthly fee per employee, onboarding fee, offboarding fee, and whether rates differ for local versus expatriate hires. Market rates typically range from USD 400 to 650 per employee per month. Review Gloroots pricing for country-specific, predictable cost structures.

Data Security and Compliance with Decree 13/2023

Confirm that the EOR complies with Decree 13/2023/ND-CP on personal data protection. This includes employee data encryption, documented consent procedures, and the ability to conduct data protection impact assessments on request.

Payroll System Integration

Verify that the EOR platform connects with your HRIS or finance tools. Payroll data should be exportable in formats that meet Vietnamese accounting standards, reducing manual reconciliation between systems.

Workforce and Talent Pool in Vietnam

Vietnam has a workforce of approximately 52 million people, with a median age of 32 years. Universities produce around 400,000 graduates annually, with strong output in engineering, IT, and business.

Ho Chi Minh City leads in finance, technology, and outsourcing. Hanoi concentrates policy, education, and R&D roles. Da Nang is a growing center for IT outsourcing and software development.

Vietnam's work culture is collectivist and hierarchical. Employees show strong deference to senior leadership, and workplace communication tends to be indirect, shaped by the concept of "giữ thể diện" (preserving face). Younger professionals in urban centers are increasingly comfortable with global business practices, including direct feedback and remote collaboration. Salary levels remain competitive against regional peers, which makes Vietnam attractive for both operational and white-collar hiring.

Category	Key Facts
Workforce Size	~52 million workers
Median Age	~32 years
English Proficiency	Improving; strongest in Hanoi, Ho Chi Minh City, and Da Nang
Top Talent Hubs	Ho Chi Minh City, Hanoi, Da Nang
Key Industries	Manufacturing, electronics, IT outsourcing, finance, e-commerce

For a comparison with another Southeast Asian talent market, see the employer of record Philippines page.

Employment Law Essentials in Vietnam

Employment in Vietnam is governed by the Labor Code of 2019 and its implementing decrees. The law is employee-protective and strictly enforced across contracts, wages, working hours, and termination.

Employment Contracts

Vietnam's Labor Code of 2019 requires written contracts in Vietnamese. Bilingual versions are permitted, but the Vietnamese text governs in any dispute. Contract types include indefinite, definite (1 to 36 months), and seasonal (under 12 months).

Working Hours and Overtime

The standard working week is 48 hours, capped at 8 hours per day. Overtime is limited to 40 hours per month and 200 hours per year, extendable to 300 hours in approved sectors.

Minimum Wage

Vietnam sets minimum wages by region, updated annually. From January 1, 2026: Region 1 VND 5,310,000/month (VND 25,500/hour), Region 2 VND 4,730,000/month, Region 3 VND 4,140,000/month, and Region 4 VND 3,700,000/month. Employers must apply the rate for the region where the employee works, not where the company is registered.

Leave and Statutory Benefits in Vietnam

Vietnam's Labor Code of 2019 defines leave entitlements clearly. Employers must apply each category correctly, as violations carry penalties.

Annual Leave

Employees in Vietnam are entitled to a minimum of 12 paid annual leave days per year. This entitlement increases by one day for every five years of continuous service with the same employer.

Sick Leave

Sick leave in Vietnam is funded through the social insurance fund, not paid directly by the employer. Employees with fewer than 15 years of social insurance contributions receive up to 30 days of sick leave per year.

Employees with longer tenure or those working in hazardous roles receive between 40 and 70 days per year, depending on their specific circumstances and contribution history.

Maternity and Paternity Leave

Female employees are entitled to 6 months of maternity leave, funded by the social insurance fund at 100% of the SI contribution salary. For multiple births, one additional month is granted per additional child. Paternity leave ranges from 5 to 14 days depending on delivery type (natural or surgical, single or multiple births). Employees are also entitled to prenatal check-up leave of up to 2 days per visit, for up to 5 visits, funded by social insurance.

Public Holidays

Vietnam observes 11 national public holidays per year. Tet (Lunar New Year) spans 5 consecutive days and is the most significant period for workforce planning.

Payroll, Tax and Statutory Contributions in Vietnam

Payroll in Vietnam is processed monthly in Vietnamese Dong (VND). Employers act as withholding agents for personal income tax (PIT) and must remit contributions to the Vietnam Social Security (VSS) authority and the General Department of Taxation (GDT).

PIT monthly filing deadline is the 20th of the following month. Late filing attracts penalties of VND 15 million to VND 25 million. Annual PIT reconciliation must be filed by March 31 (employer) or April 30 (employee). Missing these deadlines is a high-risk compliance issue that requires active calendar management.

From July 1, 2026, the personal income tax deduction increases to VND 15.5 million per month and the dependent deduction rises to VND 6.2 million per month per dependent, under Law No. 109/2025/QH15.

PIT brackets (current)

Annual Taxable Income (VND)	PIT Rate
Up to 60 million	5%
60 million to 120 million	10%
120 million to 216 million	15%
216 million to 384 million	20%
384 million to 624 million	25%
624 million to 960 million	30%
Over 960 million	35%

Employer and employee statutory contributions

Contribution	Employer Rate	Employee Rate	Notes
Social Insurance (pension)	14%	8%	Employee rate covers pension only from July 1, 2025 (Social Insurance Law 2024). Salary cap: 20x national base salary = VND 46.8 million/month.
Health Insurance	3%	1.5%	Capped at 20x national base salary.
Unemployment Insurance	1%	1%	Capped at 20x regional minimum wage.
Trade Union Fee	2%	0%	Paid by employer only.
Occupational Risk and Disease	0.5%	0%	Paid by employer only.
Total	23.5% (employer)	10.5% (employee, pre-July 2025); 8% pension only from July 1, 2025

Work Visas and Permits in Vietnam

Foreign nationals working in Vietnam for more than three months require a work permit issued by the Department of Labour, Invalids and Social Affairs (DoLISA). The EOR acts as the sponsoring employer of record.

Without a Vietnamese legal entity, foreign companies cannot sponsor visas directly. The EOR's registered entity serves as the legal sponsor, enabling LD visa issuance and work permit processing on behalf of the hiring company. This is a core function of entity-free employment in Vietnam.

Under Decree 152/2020/ND-CP and Decree 70/2023/ND-CP, employers have been required since January 2024 to post the position on the Government Employment Portal before hiring a foreign worker. Work permit processing takes approximately five business days after documentation is complete.

Work permit exemptions

The following categories are exempt from the standard work permit requirement:

• Investors holding capital contributions in a Vietnamese enterprise
• Intra-company transferees
• Workers covered under bilateral social insurance agreements
• Retirees engaged in advisory or technical roles

Visa types for foreign workers in Vietnam

Visa Type	Purpose	Validity
LD (Labour)	Issued to foreign workers with a valid work permit	Up to 2 years, renewable
DN (Business)	Short-term business activities, not employment	Up to 1 year
DT (Investment)	Investors with registered capital in Vietnam	Up to 5 years
NN (Diplomatic/Official)	Government and intergovernmental personnel	Varies

Equity and ESOP Consulting in Vietnam

Equity compensation is not yet standard across all sectors in Vietnam, but it is increasingly common in the tech and startup space.

Vietnam's growing fintech, e-commerce, and software sectors in Ho Chi Minh City and Hanoi have made equity a practical tool for attracting senior technical talent. Companies are using stock options and RSUs to compete for engineers and product leaders who have options elsewhere.

Stock options and RSUs granted to Vietnamese employees are subject to Personal Income Tax (PIT) at the point of exercise or vesting. The employer must withhold PIT on the spread between the grant price and fair market value at that time. This creates a payroll compliance obligation that requires careful handling. An EOR provider must calculate, withhold, and remit the correct PIT amount on each equity event to keep the company compliant with Vietnamese tax law.

Misclassification Risk in Vietnam

Misclassification occurs when a worker engaged as an independent contractor is legally deemed an employee under the Labor Code of 2019.

Vietnamese labor authorities assess the actual working relationship, not the contract label. Several factors indicate an employment relationship exists:

• The worker operates under direct supervision from the company on a day-to-day basis.
• The worker follows fixed hours or a regular reporting schedule set by the company.
• The worker uses company-provided equipment exclusively to perform their duties.
• The worker receives monthly compensation rather than payment tied to specific project deliverables.

When misclassification is found, the consequences are significant. Penalties under the Labor Code of 2019 include:

• Back payment of all social insurance, health insurance, and unemployment insurance contributions that were not made.
• Late payment fines and interest calculated on the outstanding contribution amounts.
• Severance or compensation claims from the worker for the period of misclassified engagement.
• Labor inspection penalties issued directly under the Labor Code of 2019 and its implementing decrees.

Companies already engaging Vietnamese freelancers face this risk directly. An EOR enables compliant conversion of those contractors to employees, resolving the exposure from day one.

An EOR eliminates misclassification risk by issuing compliant employment contracts and administering all statutory contributions from the start of employment.

Hiring, Onboarding, Termination and Offboarding in Vietnam

Vietnam's Labor Code of 2019 sets clear obligations for every stage of the employment lifecycle, from contract preparation through final settlement. Employers must follow defined procedures for onboarding, termination, and offboarding or face statutory penalties.

Termination in Vietnam requires written notice and a lawful ground. Notice periods range from 3 days during probation to 45 days for indefinite-term contracts. Grounds for dismissal include repeated performance failures, disciplinary violations, and redundancy under a restructuring plan approved by the relevant authority.

Annual medical examinations are a separate compliance requirement. Employees must complete a medical examination in accordance with Vietnam's occupational safety and labour regulations, typically conducted annually. Employers bear the cost of the examination, commonly reimbursing up to VND 2,000,000 (approximately USD 77) per employee, depending on company policy and the medical provider. The reimbursement may constitute a taxable benefit if it exceeds the tax-exempt limits or does not meet the conditions for tax exemption under Vietnam's personal income tax regulations.

Onboarding

• Before Day One: Collect CCCD (Vietnamese nationals) or valid work permit (foreign nationals). Obtain the employee's Tax Identification Number. Prepare a bilingual employment contract specifying role, salary, probation period, and termination terms. Confirm the correct regional minimum wage applies to the employee's work location.
• Day One: Issue the signed bilingual contract to the employee. Register the employee with Vietnam Social Security (VSS) within the 30-day statutory deadline. Enroll the employee in health insurance. Brief the employee on internal regulations and health and safety policies as required under the Labor Code.
• First Week: Confirm payroll setup in VND. Verify personal income tax (PIT) withholding calculations. Issue the employee handbook and applicable workplace policies. Confirm the employee's bank account details for salary payment.
• Beyond: Complete VSS registration before the 30-day deadline expires. Schedule the annual medical examination, typically in June. Track the probation period end date and confirm any contract conversion steps. Confirm whether trade union fees apply and set up deductions if required.

Termination

Termination in Vietnam requires statutory grounds: redundancy, poor performance with documented support, prolonged illness, or misconduct. Notice periods are 45 days for indefinite contracts, 30 days for definite contracts, and 3 days for seasonal roles. Severance of 0.5 months per year of service applies to employees with 12 or more months of tenure, except in misconduct cases.

Offboarding

Settlement

• Calculate final wages including unused annual leave and any applicable severance pay.
• Settle all outstanding amounts within 7 working days of the employee's last day, extendable to 30 days by mutual agreement.
• Confirm no outstanding overtime or bonus obligations remain before closing payroll.

Documents

• Issue an employment certificate stating job title, duration, and social insurance contributions.
• Provide personal income tax (PIT) records for the employee's annual tax filing.
• Issue Vietnam Social Security (VSS) deregistration confirmation to the departing employee.

Exit

• Deregister the employee from VSS to stop further contribution obligations.
• Submit a termination report to the local labor authority where applicable.
• Recover company assets and revoke all system access on or before the final working day.

What's New: Recent Regulatory Changes in Vietnam

Three significant regulatory changes took effect between 2024 and 2026 that directly affect employer payroll and compliance obligations in Vietnam: the Social Insurance Law 2024, new personal income tax deduction thresholds, and updated regional minimum wages.

• Social Insurance Law 2024 (effective July 1, 2025): The employee sickness and maternity fund contribution (3%) has been removed. Employees now contribute 8% to the pension fund only.
• Personal Income Tax Law No. 109/2025/QH15 (effective July 1, 2026): The personal deduction rises to VND 15.5 million per month. The dependent deduction rises to VND 6.2 million per month.
• January 2026 regional minimum wage increase: Region 1 is raised to VND 5,310,000 per month (VND 25,500 per hour).
• Decree 70/2023/ND-CP (effective January 2024): Employers must post foreign worker positions on the Government Employment Portal before hiring.
• Decree 13/2023/ND-CP on personal data protection: Mandatory employee data encryption and consent requirements are now in force.

Employers should review payroll configurations and contribution rates before July 1, 2025 and again before July 1, 2026 to avoid filing errors.

Employers should review payroll configurations and contribution rates before 1 July 2025 and again before 1 July 2026 to avoid filing errors. Gloroots monitors updates from the Ministry of Home Affairs (formerly the Ministry of Labour, Invalids and Social Affairs), Vietnam Social Security (VSS), the General Department of Taxation, and the Vietnam General Confederation of Labour on a quarterly basis to track changes to labour law, social insurance, health insurance, unemployment insurance, personal income tax, minimum wages, and trade union obligations.

Costs and Financial Planning for Hiring in Vietnam

Total employment cost in Vietnam extends beyond gross salary. Mandatory statutory contributions add 23.5% to the employer's cost base before any discretionary spend is considered.

Two costs that employers frequently underestimate are the Tet bonus and the annual medical examination reimbursement. The Tet bonus is market-standard at one to two months of salary, paid before Lunar New Year. It is not legally mandated, but withholding it carries significant retention risk. The annual medical examination reimbursement is typically up to VND 2,000,000 (approximately USD 77) per employee, depending on company policy. Employers should account for this cost when budgeting annual payroll and benefits.

Understanding the full cost picture before hiring helps finance teams model headcount accurately. The table below compares key cost elements between a direct entity and Gloroots EOR.

Cost Element	Direct Entity	Gloroots EOR
Entity setup	High upfront cost; 3-6 months to complete	No entity required
Employer statutory contributions	Managed internally; risk of miscalculation	Managed and filed by Gloroots
Compliance and audit costs	Annual audits required; internal or external cost	Included in EOR service
Tet bonus administration	Managed internally; payroll adjustment required	Administered by Gloroots per local practice
Medical exam reimbursement	Tracked and processed internally	Managed by Gloroots with correct tax treatment
Severance	Calculated and paid by employer	Calculated and executed by Gloroots
Exit costs	Entity dissolution takes 12 or more months	Flexible offboarding with no dissolution process

For a detailed breakdown of what EOR services cost globally, see our guide on employer of record cost. To review Gloroots-specific rates for Vietnam, visit our pricing page.

Common Challenges and How Gloroots Solves Them in Vietnam

Employers in Vietnam face recurring compliance pressure from regulatory update frequency, foreign worker permit complexity, and data protection obligations under Decree 13/2023.

Challenge	How Gloroots Addresses It
Social Insurance Law 2024 contribution rate change	Gloroots updates payroll configurations before the July 1, 2025 deadline to keep contributions accurate.
Government Employment Portal posting requirement for foreign hires	Gloroots manages DoLISA compliance and submits required postings through the portal on the employer's behalf.
Decree 13/2023 data protection obligations	Gloroots applies compliant data handling procedures and collects employee consent in line with Vietnamese law.
Tet bonus administration and timing	Gloroots tracks market-standard bonus obligations and processes payments before Lunar New Year.
PIT deduction threshold change from July 2026	Gloroots reconfigures withholding calculations ahead of the effective date under Law No. 109/2025/QH15.

Why Gloroots Is a Strong EOR Partner in Vietnam

Gloroots is well suited for companies hiring between 1 and 50 employees in Vietnam without a local entity, particularly those in technology, outsourcing, manufacturing support, and shared services.

On the compliance side, Gloroots manages the Social Insurance Law 2024 contribution changes, handles DoLISA work permit sponsorship for foreign nationals, and applies the correct 2026 regional minimum wage based on each employee's work location.

Gloroots holds its own Vietnamese entity, which enables direct VSS registration and PIT filing without relying on a local partner network.

Common use cases include converting Vietnamese contractors to employees, testing the market before committing to a WFOE, and hiring niche technical talent on short timelines.

Companies with more than 50 employees or those requiring a revenue-generating local presence should evaluate whether a direct entity or hybrid model is more cost-effective over the long term. For a broader view of provider options, see the best employer of record comparison. To review what Gloroots covers operationally, visit the EOR services page.

Conclusion

Vietnam's Social Insurance Law 2024 and the January 2026 minimum wage increase mean employer compliance obligations are actively changing, not static.

Companies evaluating Vietnam should map their headcount size, timeline, and entity plans before choosing between EOR, WFOE, or a hybrid model. Gloroots supports the EOR path with compliant contracts, updated payroll, and DoLISA work permit management. For companies also considering regional expansion, the employer of record Singapore page covers a comparable APAC hiring context.

Frequently Asked Questions About Employer of Record in Vietnam

What is an Employer of Record in Vietnam?

An Employer of Record (EOR) is a third-party entity that legally employs workers on behalf of a foreign company in Vietnam. The EOR holds the employment contracts, runs payroll, and manages statutory contributions under Vietnamese law.

This model allows foreign companies to hire in Vietnam without registering a local entity. The client company directs the day-to-day work, while the EOR handles all employment, payroll, and compliance obligations.

How long does it take to hire through an EOR in Vietnam?

Hiring through an EOR in Vietnam typically takes two to four weeks from contract signing to the employee's first day. This is significantly faster than entity setup, which can take three to six months.

The EOR handles employment registration, social insurance enrollment, and payroll configuration in parallel. This means the employee can start work while administrative processes are being completed in the background.

What statutory contributions must employers make in Vietnam?

Employers in Vietnam must contribute to social insurance, health insurance, and unemployment insurance on behalf of each employee. The combined employer contribution rate is approximately 21.5% of the employee's gross salary.

Employees also contribute a share of these funds from their own salary. Contributions are remitted monthly to the Vietnam Social Security authority, and late payments carry financial penalties under the Social Insurance Law 2024.

Does the Social Insurance Law 2024 change anything for foreign employers?

Yes. The Social Insurance Law 2024, effective July 2025, expands coverage requirements and adjusts contribution calculations for certain categories of workers. Foreign employers using an EOR must ensure their payroll provider has updated its systems to reflect these changes.

Gloroots monitors regulatory updates and applies them to payroll calculations and employment contracts. This reduces the risk of non-compliance for companies that do not have in-house Vietnamese labor law expertise.

Can an EOR manage work permits for foreign nationals in Vietnam?

Yes. Foreign nationals working in Vietnam generally require a work permit issued by the Department of Labour, Invalids and Social Affairs (DoLISA). The permit application requires documentation from both the employer and the employee.

An EOR with local operations can manage the DoLISA application process, track permit expiry dates, and coordinate renewals. Gloroots includes work permit management as part of its Employment Lifecycle Management service for Vietnam.

What is the minimum wage in Vietnam and when does it change?

Vietnam uses a regional minimum wage system with four zones. As of January 2026, the minimum wage ranges across zones, with Zone 1 (covering Hanoi and Ho Chi Minh City) set at the highest rate. Rates are reviewed and updated annually by the National Wage Council.

Employers must apply the correct zone rate based on where the employee works, not where the company is registered. An EOR automatically applies the correct regional rate during payroll processing.

When does using an EOR make more sense than setting up a WFOE in Vietnam?

An EOR is the better option when a company needs to hire quickly, is testing the Vietnamese market, or has a small to mid-sized headcount that does not justify the cost and time of entity registration. A Wholly Foreign-Owned Enterprise (WFOE) makes more sense for large, long-term operations with significant local investment.

Companies with fewer than 20 to 30 employees in Vietnam typically find that EOR costs are lower than the combined expense of entity setup, local accounting, annual audits, and compliance management. Gloroots provides transparent, country-specific pricing to support this comparison.

Is it legal to use an Employer of Record in Vietnam?

Yes. Using an EOR in Vietnam is fully legal under the Labor Code of 2019. The EOR becomes the statutory employer, signing contracts and registering employees with VSS and the General Department of Taxation.

The client company retains operational direction over the employee's work. This structure is widely used by multinationals entering Vietnam without a local entity and is recognized by Vietnamese labor and tax authorities.

How long does it take to hire an employee in Vietnam through an EOR?

An EOR can typically onboard an employee in Vietnam within 2 to 4 weeks, compared to 3 to 6 months for a direct entity setup.

The timeline covers contract drafting, employee document collection (CCCD or work permit), VSS registration, and payroll setup. For foreign nationals, DoLISA work permit processing adds approximately 5 business days. The Government Employment Portal posting requirement, in place since January 2024, must also be completed before the permit application is submitted.

What are the total employer costs when hiring in Vietnam?

Total employer cost in Vietnam is gross salary plus approximately 23.5% in statutory contributions: social insurance (17.5%), health insurance (3%), unemployment insurance (1%), and trade union fee (2% where applicable).

Additional costs include the Tet bonus (market-standard one to two months salary, paid before Lunar New Year), annual medical examination reimbursement (approximately USD 90 per employee), and severance of 0.5 months per year of service for employees with 12 or more months of tenure. The EOR fee is a separate monthly cost per employee.

Do I need a Vietnamese bank account to pay employees through an EOR?

No. When using an EOR, you do not need a Vietnamese bank account. The EOR holds the local bank account and processes salary payments in VND on your behalf.

You pay the EOR in your preferred currency. The EOR converts and disburses salaries in Vietnamese Dong to employees' local bank accounts. This removes the need for foreign currency accounts, local banking relationships, or VND liquidity management on your side.

Can an EOR sponsor work visas for foreign employees in Vietnam?

Yes. An EOR with a registered Vietnamese entity can act as the legal sponsor for LD work visas and DoLISA work permits for foreign nationals.

Foreign companies without a Vietnamese entity cannot sponsor visas directly. The EOR's registered entity fulfills that sponsorship role, allowing foreign employees to obtain LD visas valid for the duration of their employment contract. Since January 2024, the EOR must also post the position on the Government Employment Portal before submitting the work permit application.

What happens to the Tet bonus — is it legally required?

The Tet bonus is not legally mandated under Vietnamese law. It is, however, deeply embedded as a market norm and widely expected by employees.

The typical Tet bonus equals one to two months' gross salary, paid before the Lunar New Year holiday. Skipping it creates real retention and reputational risk, particularly in competitive markets like Ho Chi Minh City and Hanoi. Gloroots tracks and administers Tet bonus payments as part of the annual payroll cycle.

What changed with Vietnam's Social Insurance Law 2024?

The Social Insurance Law 2024, effective July 1, 2025, removed the employee's 3% sickness and maternity fund contribution. Employees now contribute 8% to pension only.

Employer contributions remain at 17.5%: 14% pension, 3% sickness and maternity, and 0.5% occupational accident. Adding health insurance (3%), unemployment insurance (1%), and the trade union fee (2%), total employer statutory cost reaches 23.5%. Payroll systems must be updated before July 1, 2025 to reflect the revised employee contribution split.