Hiring at a Glance

Vietnam’s fast-growing economy and booming tech industry offer access to a young, skilled workforce. The Vietnam Labor Code strictly regulates employment: all employees require a written contract (even probation). Probation is limited to 60 days for college-degree jobs and 30 days for technical roles. Vietnamese labor law mandates social insurance (pension, health, etc.) for all local employees, with contributions shared by employer and employee. Foreign companies often use an EOR to navigate these rules and hire quickly – this avoids lengthy company setup and ensures compliance with local contract and insurance regulations.

‍

Key Characteristics of Talent Market

• Highly disciplined workforce: Known for a strong work ethic, especially among engineers, developers, and factory managers.
  
• Tech and manufacturing hub: Vietnam has many engineering and IT graduates; it is a rising center for software development and electronics manufacturing.
  
• Cost-competitive salaries: Wages are among the lowest in Asia for skilled labor, but rising steadily (especially in Hanoi and Ho Chi Minh City).
  
• Legal guarantees: The Labor Code is employee-favorable: strict limits on working hours (48/week), mandated overtime pay, and generous maternity/paternity leave. Employers must comply rigorously.
  
• Union coverage: Most companies must allow a labor union or union chapter if requested by workers (National Union of Vietnam Workers). Collective bargaining plays a role in salary structures in larger firms.
  

‍

Most In-Demand Skills in 2026

• Software Development: Java, .NET, and mobile app developers; proficiency in cloud platforms. Vietnam’s IT outsourcing sector continues to expand.
  
• Quality Assurance: QA engineers and testers, especially for software and electronics manufacturing.
  
• Data/Analytics: Data scientists, machine learning engineers, and digital transformation specialists.
  
• Engineering: Electrical, mechanical, and automation engineers to support manufacturing industries (tech, automotive, F&B plants).
  
• Finance & Accounting: Corporate finance professionals fluent in IFRS and international standards, for multinational companies entering Vietnam.
  
• Project Management: Skilled project managers with experience in fast-paced industries (tech projects, factories) are needed to coordinate growth.
  

‍

Top Universities Supplying Talent

• Vietnam National University (Hanoi and Ho Chi Minh City) – flagship universities with broad programs.
  
• Hanoi University of Science and Technology (HUST) – top for engineering and IT.
  
• Ho Chi Minh City University of Technology (HCMUT) – leading science and engineering school in the south.
  
• Others: Foreign-branded universities (RMIT Vietnam, Fulbright University) and economics universities (NEU, FPT University).
  

‍

Salary Benchmarks for Roles

Annual gross salaries (VND):

• Software Engineer: VND 500,000,000–900,000,000 (USD 20k–36k).
  
• Data Analyst / IT Specialist: VND 450,000,000–800,000,000 (USD 17.1k – 30.4k).
  
• Mechanical/Civil Engineer (mid-career): VND 400,000,000–700,000,000 (USD 15.2k – 26.6k).
  
• Accountant / Finance Manager: VND 400,000,000–800,000,000 (USD 15.2k –30.4k).
  
  

Employer of Record vs Legal Entity Setup in Vietnam

‍

To legally hire employees, a company must

• Register a Vietnam entity: Obtain an Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) from relevant Vietnamese authorities. Alternatively, use an EOR to employ staff through an existing local provider.
  
• Tax registration: Apply for a corporate tax code with the tax authorities. Employers must withhold personal income tax (PIT) on salaries.
  
• Social insurance: Register with the Social Insurance Agency within 30 days of hiring the first employee. Both the company and employee make monthly contributions (see below) under the Vietnam social insurance system.
  
• Labor contracts: Issue a written labor contract to the employee (in Vietnamese), specifying terms. Probation periods are strictly capped (max 60 days for professional roles).
  
• Work permits: If hiring foreigners, secure a work permit or exemption and a business visa (card visit).
  
• Regulatory compliance: Obtain mandatory business license (and any sector-specific licenses). Follow local fire, health, and labor inspection processes.
  

‍

Cost of Entity Setup

Vietnam company formation costs are moderate. Government fees (for an LLC or JSC) are relatively low, but professional service fees can bring the total to around USD 3,000–4,000. There is no official minimum capital except for certain regulated industries. Additional costs include office rental, a resident director fee (if needed), and required business license taxes (a small percentage of declared capital). Due to red tape and setup time (often several months), many foreign employers prefer to hire via an EOR rather than establish a standalone entity.

‍

What Hiring Through an EOR Means in Vietnam

An Employer of Record (EOR) in Vietnam becomes the legal employer registered with the Ministry of Labour, Invalids and Social Affairs (MOLISA), while the employee works exclusively for your company. You retain full operational control over work, performance, and reporting lines, while the EOR assumes responsibility for all employer obligations under Vietnam’s Labor Code and social insurance system.

Vietnam is not a flexible common-law employment market. Employment is governed by codified statute, strict documentation rules, and mandatory registrations with multiple authorities. Foreign companies cannot legally employ Vietnamese staff without:

• A locally registered entity and
  
• Compliance with Vietnam’s labor contracts, social insurance, and tax systems
  

An EOR provides this legal employer infrastructure without requiring you to establish a Vietnamese entity.

An EOR in Vietnam handles:

• Vietnam Labor Code–compliant employment contracts (Vietnamese language mandatory)
  
• Payroll processing in VND
  
• Personal Income Tax (PIT) withholding and filings
  
• Social Insurance (SI), Health Insurance (HI), and Unemployment Insurance (UI)
  
• Mandatory trade union fee administration
  
• Probation period compliance (role-specific limits)
  
• Fixed-term vs. indefinite contract management
  
• Work permits and work-permit exemptions for foreigners
  
• Terminations, notice, and statutory severance
  
• Correct classification of local vs. foreign employees
  

This model works best for companies that want to hire in Vietnam without navigating entity setup, labor registrations, and tightly enforced employment rules.

‍

Risk Involved in Both Models

Vietnam’s employment system is rule-bound, document-driven, and inspection-oriented. Labor inspectors focus heavily on:

• Contract validity
  
• Social insurance enrollment
  
• Probation misuse
  
• Foreign worker authorization
  
• Termination procedure
  

Key characteristics of Vietnam labor compliance:

• Written employment contracts are mandatory
  
• Vietnamese language contract prevails legally
  
• Probation periods are capped by law (role-dependent)
  
• Fixed-term contracts are limited (max two renewals)
  
• Termination without statutory grounds is invalid
  
• Foreigners cannot work without permits or exemptions
  

Compliance failures can result in:

• Labor inspection penalties
  
• Retroactive social insurance liabilities
  
• Invalid terminations and reinstatement claims
  
• Fines for illegal foreign employment
  
• Forced conversion of contract types
  

‍

EOR Vs. Entity: When to use What?

‍

Why is an EOR the Most Efficient Way to Hire in Vietnam?

Vietnam offers a large, skilled workforce across engineering, manufacturing, product, and operations but employment compliance is procedural, not discretionary.

An EOR is not a payroll vendor. It is the legal employer recognized by Vietnamese authorities, responsible for:

• Labor Code compliance
  
• Contract enforceability
  
• Statutory insurance contributions
  
• Foreign worker authorization
  
• Termination execution
  

This separation allows foreign companies to operate in Vietnam without inheriting legal exposure tied to unfamiliar labor mechanics.

‍

#1. EOR Manages Vietnam’s Contract & Probation Constraints

Vietnam strictly regulates how employment contracts are structured.

Key legal constraints include:

• Mandatory Vietnamese-language contracts
  
• Probation limits:
  
  • 6 days (unskilled)
    
  • 30 days (technical roles)
    
  • 60 days (degree-level roles)
    
• Maximum of two fixed-term contracts before mandatory conversion to indefinite term
  

Example:

‍

‍

An EOR ensures contracts are legally enforceable, not just commercially drafted.

‍

#2. EOR Eliminates Social Insurance & Payroll Exposure

Vietnam employment cost is driven by mandatory social insurance, not just salary.

‍

‍

Incorrect payroll handling can trigger:

• Retroactive SI contributions (with interest)
  
• Labor inspection penalties
  
• Employee disputes over net pay
  

EOR payroll systems are built on Vietnam-specific contribution caps and thresholds, which change periodically.

‍

#3. EOR Controls Termination & Severance Risk

Vietnam does not allow at-will termination. Employers must rely on:

• Specific statutory termination grounds
  
• Performance documentation
  
• Restructuring or redundancy procedures
  
• Statutory notice periods

‍

‍

An EOR safeguards employers by:

• Structuring lawful exits
  
• Calculating severance correctly
  
• Managing notice and filings
  
• Representing the employer in labor disputes
  

In Vietnam, termination mistakes often invalidate the entire separation.

‍

#4. EOR Avoids Entity & Administrative Overhead

Setting up a Vietnam entity requires:

• Business licensing
  
• Tax registration
  
• Labor authority filings
  
• Ongoing compliance audits

‍

‍

EOR converts Vietnam expansion into a low-commitment, compliant hiring model.

‍

EOR vs. PEO in Vietnam: How to Decide the Right Hiring Model?

A PEO in Vietnam cannot legally employ workers. A registered local entity is required.

• PEO: HR/payroll support only
  
• EOR: Legal employer + compliance holder

‍

‍

The key question is:

Do you want to be directly accountable to Vietnamese labor authorities?

If not, EOR is the correct model.

‍

Payroll, Taxes, and Monthly Compliance

• Salary calculation: Compute gross salary including basic pay and any fixed allowances. Overtime (1.5× to 3× the hourly rate) must be paid for hours beyond 8/day and on holidays per Vietnamese law.
  
• Personal Income Tax (PIT): Withhold monthly PIT on Vietnamese and foreign residents under the progressive scale (5%–35%), or a flat 20% on foreign-sourced income (if applicable). Remit PIT by the 10th of the following month.
  
• Social insurance (SI): The employer contributes ~17.5% of an employee’s base salary to social insurance (Sickness/Maternity 3%, Retirement/Death 14%, and work injury 0.5%).
  
• Health insurance (HI): Employers pay 3% of salary, employees 1.5%.
  
• Unemployment insurance (UI): For Vietnamese nationals only: 1% each for employer and employee.
  
• Contribution base: These are calculated on a capped portion of salary (20× regional minimum wage for SI and HI, current cap changes each year). Overpayments may be refunded or adjusted via payroll.
  
• Remittance: Social and health insurance payments are made monthly (by the 14th of next month). PIT is paid monthly (by the 10th of the next month) via e-Filing.
  
• Payslips and reports: Issue monthly pay slips to employees. File annual social insurance reports and reconcile contributions at year-end. Maintain payroll registers, tax returns, and contribution receipts in case of inspection.

‍

Salary Structure Compliance Risks

• Under-reporting salary base: Vietnamese law caps the wage base for contributions. Employers must ensure all fixed allowances (housing, transport, etc.) are included when within the cap. Omitting them can trigger audits.
  
• Severance obligations: The Labor Code (Article 44) entitles employees to severance if they work 1+ year and the employer terminates without due cause. The formula (1 month’s pay per year) must be followed; violating this leads to back wages and damages. Employers often mistakenly assume no severance if the employee resigns – but lengthy service still triggers a partial severance right.
  
• Contract violations: Any oral “under-the-table” pay components are illegal. All wages must be documented in the written contract.
  
• Overtime miscalculation: Improperly calculating overtime premiums (e.g. not adjusting the “hourly wage” after allowances) can cause underpayment.

‍

Monthly Payroll Operations

• Compute payroll: Collect attendance data or fixed salaries. Calculate gross pay for each staff (taking into account any overtime or bonuses).
  
• Deductions and contributions: Deduct PIT (using current withholding formula), social insurance (8% of base by employee), health insurance (1.5%), and UI (1%, Vietnamese only). Add employer SI (17.5%) and HI (3%) contributions to the employer’s side.
  
• Payslips: Prepare Vietnamese-language payslips for each employee, itemizing gross pay and all deductions. Provide these by the salary date (usually month-end).
  
• Remit payments: Transfer net salaries to employees’ bank accounts. Pay PIT to the tax office by the 10th of the next month. Pay social and health insurance contributions to the Social Insurance Agency by the 14th.
  
• Reporting: File monthly social insurance reports (including list of insured employees) and quarterly/annual PIT filings as required. At year-end or upon employee exit, issue a Social Insurance Booklet (sổ bảo hiểm) to track the employee’s accrued benefits. Maintain all records for government audits.

‍

Step-by-Step Onboarding Process With an EOR in Vietnam

Hiring in Vietnam requires coordination across labor law, tax, and insurance systems. Below is a compliant onboarding workflow through Bolto EOR.

‍

1. Confirm a MOLISA-Registered Employer Entity

Verify that the EOR is registered with labor authorities and authorized to employ staff in Vietnam.

‍

2. Validate Role, Contract Type & Probation Rules

Confirm job category to apply correct probation limits and contract structure.

‍

3. Request a Full Cost-to-Company Breakdown

The quote should include:

• Gross salary
  
• SI, HI, UI contributions
  
• Trade union fees
  
• PIT withholding
  
• EOR management fee
  

Vietnam employment cost is structure-dependent, not just salary-based.

‍

4. Initiate Work Permit or Exemption (If Applicable)

For foreign nationals, the EOR manages:

• Work permit application or
  
• Work-permit exemption registration
  

Employment cannot legally begin without this step.

‍

5. Generate Vietnam-Compliant Employment Contract

Contracts must:

• Be in Vietnamese
  
• Reflect statutory probation and termination rules
  
• Comply with Labor Code 2019

‍

6. Register Employee with Authorities

The EOR registers the employee with:

• Tax authorities
  
• Social insurance agencies
  
• Trade union (where applicable)

‍

7. Run Payroll & Maintain Ongoing Compliance

The EOR manages:

• Monthly payroll
  
• Tax and insurance filings
  
• Contract renewals
  
• Regulatory updates

‍

Build Your Vietnam Team with Bolto EOR

Expanding into Vietnam is fundamentally a labor-law and compliance challenge, not just a hiring task.

Bolto’s Employer of Record model absorbs that complexity so you can hire in Vietnam without becoming the legal employer or compliance owner.

‍

Local Labor Compliance, Fully Managed

Bolto handles:

• Vietnam-compliant contracts
  
• Payroll and statutory insurance
  
• Work permits and exemptions
  
• Labor authority interactions
  

You control work and output, Bolto carries employer liability.

‍

Hire Without Entity Setup or Regulatory Exposure

With Bolto EOR, you can:

• Hire in weeks
  
• Test Vietnam as a market
  
• Scale or exit without entity wind-down

‍

Transparent Costs, No Compliance Surprises

All statutory and employment costs are disclosed upfront, no retroactive insurance or inspection penalties later.

‍

Full Employee Lifecycle Support

From compliant onboarding to lawful termination and severance, Bolto manages the entire lifecycle.

‍

Built for Risk-Controlled Expansion in Vietnam

Vietnam rewards compliant employers and penalizes procedural mistakes. Bolto’s EOR model enables growth without inheriting labor-law risk.