Hiring in Vietnam: the complete EOR guide.
What it actually takes for a US company to employ software engineers in Vietnam — employer contributions, personal income tax, working hours, leave, bonuses, and severance — plus whether to use an Employer of Record or set up your own entity.
Employer & employee contributions
Vietnam mandates social, health, and unemployment insurance on top of gross salary. The employer pays roughly 23.5% (including a 2% trade-union fee); the employee bears 10.5% via payroll deduction. Contribution bases are capped at 20× the base salary (social/health) and 20× the regional minimum wage (unemployment).
| Contribution | Employer | Employee |
|---|---|---|
| Social insurance | 17.5% | 8% |
| Health insurance | 3% | 1.5% |
| Unemployment insurance | 1% | 1% |
| Trade union fee | 2% | — |
| Total | ~23.5% | 10.5% |
Personal income tax (PIT)
Residents are taxed on a progressive scale from 5% to 35% of monthly taxable income, after a personal deduction of 11M VND/month and 4.4M VND per dependent. As your EOR, AppTuring withholds and files PIT for each employee.
| Monthly taxable income (M VND) | Rate |
|---|---|
| Up to 5 | 5% |
| 5 – 10 | 10% |
| 10 – 18 | 15% |
| 18 – 32 | 20% |
| 32 – 52 | 25% |
| 52 – 80 | 30% |
| Over 80 | 35% |
Working hours & overtime
Standard working time is a maximum of 8 hours per day and 48 hours per week. Overtime is capped (typically 40 hours/month and 200 hours/year, up to 300 in special cases) and paid at a premium:
- 150% on normal working days
- 200% on weekly rest days
- 300% on public holidays and paid leave days
Leave & public holidays
- Annual leave: at least 12 paid days, +1 day for every 5 years of service.
- Public holidays: 11 paid days, including a ~5-day Tet (Lunar New Year) period.
- Maternity leave: 6 months, paid through social insurance.
- Sick leave: covered by social insurance, subject to statutory limits.
13th-month salary & Tet bonus
A 13th-month salary is customary — not legally mandated, but paid by almost all employers around Tet. Competitive offers include it, so we build it into your cost model rather than surprising you with it later.
Contracts, probation & notice
- Contract types: indefinite-term or definite-term (up to 36 months, renewable once before it becomes indefinite).
- Probation: up to 60 days for roles requiring a college qualification (30 days for technical roles).
- Notice: ~30 days (definite-term) or ~45 days (indefinite-term) for either party.
Termination & severance
Terminations must follow statutory grounds and notice. A severance allowance of half a month's salary per year of service applies for the period not covered by unemployment insurance. AppTuring manages compliant offboarding — notice, final settlement, and any severance — so exits are clean and low-risk.
EOR vs. setting up your own entity
For most teams hiring 1–30 engineers, an EOR is faster, cheaper, and lower-risk than incorporating. A wholly-owned entity only pays off once you have a large, permanent local presence.
| Consideration | AppTuring EOR | Own entity |
|---|---|---|
| Time to first hire | ~10 business days | 2–6 months |
| Upfront setup cost | None | $15k–$30k+ legal & registration |
| Local entity required | ||
| Payroll, tax & filings | Handled for you | Your responsibility |
| Statutory benefits admin | Included | Build in-house / outsource |
| IP assignment to US parent | Back-to-back, built in | Draft & maintain yourself |
| Compliance risk owner | AppTuring | You |
| Best when | 1–30 engineers, speed | Large, permanent local presence |
Common questions
Can a US company hire in Vietnam without a local entity?+
Yes. Through an Employer of Record like AppTuring, your engineers are legally employed by our licensed Vietnamese entity while you direct their day-to-day work. You never register a company, open a local bank account, or file Vietnamese taxes.
What is the total employer cost on top of gross salary in Vietnam?+
Mandatory employer contributions total 21.5% of gross (social 17.5%, health 3%, unemployment 1%), plus a 2% trade-union fee — roughly 23.5% all-in. Contribution bases are capped at 20× the base/regional minimum salary.
How is personal income tax handled?+
Vietnam uses progressive PIT from 5% to 35% on monthly taxable income, after a personal deduction (11M VND/month) and dependent deductions (4.4M VND each). As EOR, we withhold and file it for each employee.
Is a 13th-month salary mandatory?+
It is customary rather than legally mandatory. Almost all employers pay a 13th-month bonus around Tet (Lunar New Year); competitive offers include it, and we build it into your cost model.
How does termination and severance work?+
Notice periods are typically 30 days (definite-term) or 45 days (indefinite-term). A severance allowance of half a month's salary per year of service applies to periods not covered by unemployment insurance. We manage compliant offboarding end to end.
Skip the entity. Hire in Vietnam in ~10 days.
AppTuring handles contracts, payroll, statutory contributions, IP assignment, and compliance — you just manage the engineers.
This guide is general information reflecting the Vietnam Labor Code (2019, effective 2021) and is indicative as of 2026. Rates, caps, and thresholds change and vary by role, region, and individual circumstances. It is not legal, tax, or accounting advice — confirm specifics with qualified counsel or your AppTuring contact.