Human Resources in Vietnam: An Overview for Foreign Investors (2025)

Understanding Vietnam’s labour laws and HR compliance framework is critical for foreign investors. Employment regulations in Vietnam differ significantly from international norms, and failure to comply can result in fines, suspension of business activities, or reputational damage.

Alitium has prepared the Human Resources in Vietnam 2025 Guide to provide investors with a clear overview of the labour environment, practical obligations, and compliance risks. Below is a summary of the key areas covered.

Employment Contracts

• Definition: Any agreement where labour is provided under the direction of an employer for compensation may be deemed an employment contract.

• Types of contracts:

  • Indefinite-term contracts (no end date).

  • Definite-term contracts (up to 36 months). After two definite-term contracts, the next must be indefinite.

• Probation: Up to 30 days (general roles) or 60 days (technical positions). Salary during probation must be at least 85% of agreed wage.

• Mandatory contents: Job description, workplace, duration, salary, benefits, working hours, insurance, and safety conditions.

Working Hours, Leave & Benefits

• Standard hours: 8 hours/day, 48 hours/week (offices commonly adopt 40 hours/5 days).

• Overtime: Limited to 200 hours/year (extendable to 300 in some sectors). Paid at 150% (weekdays), 200% (weekends), 300% (public holidays).

• Annual leave: Minimum 12 days per year, plus extra leave for long service, foreign employees, and hazardous work.

• Public holidays: 11 days annually (including 5 days for Lunar New Year/Tet).

Wages & Payroll

• Minimum wage: Varies by region and updated annually (currently ranging from 3.45m – 4.96m VND/month).

• Payment: Salaries must be paid at least monthly. Delays require interest compensation.

• Allowances & bonuses: Commonly provided (housing, meals, transport, performance).

• Personal Income Tax (PIT): Progressive rates from 5% to 35%, with personal and dependent allowances. Employers must withhold and remit PIT.

Compulsory Insurance & Contributions

Employers must contribute on behalf of employees:

• Social Insurance: 17.5% employer / 8% employee (covers pensions, sickness, maternity, accidents).

• Health Insurance: 3.0% employer / 1.5% employee.

• Unemployment Insurance: 1.0% employer / 1.0% employee (Vietnamese staff only).

• Trade Union Contributions: 2.0% employer; employees contribute 1.0% if unionised.

Employing Foreigners

• Work Permits: Required for most foreign employees unless exempt. Each role and employer requires a separate permit.

• Eligible roles: Experts, managers, executives, and intra-corporate transferees.

• Tax-free benefits for expats: Housing, relocation costs, annual flights home, and children’s school fees.

• Planning required: Applications involve pre-approvals and legalised foreign documents.

Termination & Compliance Risks

Vietnam’s Labour Code sets strict rules for ending employment:

• Employees may resign with 30–45 days’ notice depending on contract type.

• Employers may terminate for poor performance, misconduct, prolonged illness, restructuring, or M&A — but must follow formal procedures (often requiring trade union and DoLISA approval).

• Severance and termination pay obligations often apply.

• Special protections apply to certain employees (e.g., pregnant staff, employees with children under 12 months).

Non-compliance risks include administrative fines, suspension of operations, and even criminal liability for serious violations.

Download the Full 2025 HR Guide

The full Human Resources in Vietnam 2025 Guide provides:

• Detailed breakdown of employment laws.

• Payroll and PIT calculation tables.

• Compliance checklists for HR departments.

• Termination pathways and dispute resolution procedures.

👉 [Download the full guide here]

How Alitium Supports Investors

Alitium provides end-to-end HR, payroll, and compliance solutions for foreign companies in Vietnam. From drafting compliant employment contracts, managing payroll, and calculating PIT, through to advising on terminations and handling labour inspections — we ensure businesses remain compliant while focusing on growth.

📩 Contact us at vietnam@alitium.com to discuss how we can support your HR operations in Vietnam.

You may also like our Vietnam Compliance Calendar Guide 2025 Click Here covering key reporting/filing dates for employers.

In addition, our article covering risks and differences in contractors versus employees in Vietnam Click Here