Vietnam Employee Compensation Regulations: A Comprehensive Guide

Minimum Wage Structure in Vietnam

Vietnam operates with a dual minimum wage system that international employers must understand. The general minimum wage of 1,800,000 VND applies to state-owned enterprises and serves as the basis for calculating social insurance contributions. Meanwhile, regional minimum wages govern private sector compensation across four distinct zones.

Region I: 4,960,000 VND (Hanoi urban districts, Ho Chi Minh City, Dong Nai, Binh Duong)
Region II: 4,410,000 VND (Hanoi suburbs, HCMC suburbs, Da Nang urban areas)
Region III: 3,860,000 VND (Bac Ninh, Bac Giang, Hai Duong, and other provincial cities)
Region IV: 3,450,000 VND (Remote mountainous and rural agricultural areas)

Hourly minimum wages follow the same regional classification:

Region I: 23,800 VND/hour
Region II: 21,200 VND/hour
Region III: 18,600 VND/hour
Region IV: 16,600 VND/hour

Payroll Frequency Requirements

Vietnamese labor law mandates specific payment intervals depending on compensation structure. Employees paid by hour, day, or week must receive wages within 15 days of completing work. Monthly-paid staff typically receive compensation monthly or semi-monthly, though some manufacturers opt for bi-weekly payments.

Payment timing should be mutually agreed upon and documented. Foreign employees may receive payment in Vietnamese Dong or USD, though USD payments must be converted to VND for tax and social security purposes. Employers facing unavoidable payment delays must compensate employees with interest equivalent to one-month bank deposit rates if delays exceed 15 days.

Essential Payroll Documentation

Payroll documentation, commonly referred to as pay stubs, must accurately reflect employee compensation and deductions. Required elements include:

Employee identification details and contact information
Pay period start and end dates
Total hours worked during the period
Overtime hours recorded
Social insurance, health insurance, and tax deductions
Net pay after authorized deductions

Employers may provide pay stubs electronically or in physical format, but must ensure accuracy and address discrepancies promptly. Many multinational companies working with SailGlobal benefit from automated payroll systems that maintain compliance while reducing administrative burden.

Payroll Management Options

Companies expanding into Vietnam face critical decisions regarding payroll administration. Establishing a local entity requires significant investment in understanding complex tax regulations and hiring specialized financial staff. Alternatively, partnering with established providers like SailGlobal offers streamlined compliance and reduces operational risks.

Common Compliance Risks and Penalties

Employers must provide mandatory benefits including social insurance, health insurance, and unemployment coverage. Non-compliance can result in substantial fines and legal disputes. Vietnamese labor law specifically requires:

Annual health examinations for hazardous occupation workers
Bi-annual checkups for disabled, elderly, or minor employees
Comprehensive obstetric care and occupational disease detection
Medical assessment before transferring employees to more hazardous roles

Payment Methods and Best Practices

Vietnamese law permits various payment methods while emphasizing security and transparency:

Cash payments (requires same-day distribution)
Paper checks (bank-cashable instruments)
Direct bank transfers (increasingly preferred)
Electronic payroll cards (prepaid card systems)

Most modern employers favor direct deposit for its efficiency and audit trail benefits. Employers should collect valid bank account information during onboarding and establish clear payment protocols.

Bonus Regulations and Practices

Thirteenth Month Salary

The traditional 13th-month bonus, typically distributed during Lunar New Year (Tet) or year-end, serves as recognition for employee dedication. While not legally mandated, this practice has become standard across many industries.

Performance-Based Bonuses

Companies may implement performance incentive programs tied to measurable objectives. Effective bonus programs consider:

Clear eligibility criteria and measurement metrics
Non-discriminatory allocation practices
Proper tax withholding and reporting
Transparent communication of program terms

Industry Salary Benchmarks (Annual VND)

Industry	National Sales Director	Sales Manager	Sales Representative
Energy Sector	1.5-3 billion VND	800M-1.5B VND	400M-800M VND
Automotive	1.4-2.8 billion VND	700M-1.4B VND	350M-700M VND
Medical Devices	1.6-3.2 billion VND	900M-1.8B VND	450M-900M VND
SaaS Technology	1.6-3 billion VND	900M-1.8B VND	500M-1B VND
Internet Services	1.5-2.8 billion VND	850M-1.7B VND	450M-900M VND
Traditional Manufacturing	1.2-2.5 billion VND	700M-1.4B VND	350M-700M VND

*Market data sourced from recruitment platforms, subject to variation.

Vietnam Employee Compensation Guide 2024: Salary Regulations & Compliance