Recruitment Agency Costs in Vietnam
In Vietnam, professional recruitment agency fees typically range from 18% to 27% of the first-year annual base salary of a recruited employee.
Headhunting services in Vietnam come at a cost, but they offer significant benefits. These include specialised expertise, access to passive candidates, confidentiality, and extensive industry networks. Headhunters help you to save time and resources, provide customised searches, conduct thorough candidate assessments, and streamline negotiations. The outcome is often a faster hiring process, lower turnover, and a better fit for key roles when you expand your business in Vietnam
Employer Tax Costs in Vietnam _Updated Nov 2023
These social contributions are mandatory in Vietnam, and employers are legally obligated to ensure compliance.
- Employers in Vietnam are obligated to contribute 21.5% on top of an employee’s salary in the form of social contributions.
- Employees also contribute total 10,5% of their salary
Social Insurance (SI): 25,5%
- Employers are required to contribute 17.5% of an employee’s monthly salary to the Social Insurance Fund.
- Employees also contribute 8% of their salary to the fund.
Social Insurance covers benefits like sickness, maternity, occupational accidents, and retirement.
Health Insurance (HI): 4,5%
- Employers contribute 3% of an employee’s monthly salary to the Health Insurance Fund.
- Employees contribute 1.5% of their salary to this fund.
Health Insurance provides access to medical services and partially covers healthcare expenses.
Unemployment Insurance (UI): 2%
- Employers and Employees must contribute 1% of an employee’s monthly salary to the Unemployment Insurance Fund.
Unemployment Insurance offers financial support to employees who lose their jobs.
It’s important to note that these contributions are based on an employee’s actual salary, which includes their base salary, bonuses, and other allowances. Employers are responsible for deducting the employee’s share of these contributions from their salary and remitting both the employer and employee contributions to the respective funds.
Employee Income Taxes in Vietnam
In Vietnam, employees are subject to income taxes that range between 5% and 35%, depending on their income bracket. Additionally, they are required to pay 10.5% in social security taxes.
Employee Probation in Vietnam
Vietnam allows for a probationary period that ranges from as short as six days to a maximum of 60 days.
Employee Overtime (OT) in Vietnam
In Vietnam, the standard workday consists of 8 hours, amounting to a total of 48 hours per week. Overtime can be implemented with the mutual agreement of both the employer and employee but cannot exceed 50% of the normal working hours in a single day. Monthly, overtime hours cannot exceed 30, with an annual cap of 200 hours, except in certain cases stipulated by the government. Overtime work is compensated at the following rates:
- Normal weekdays: 150% of the regular wage
- Weekends: 200% of the regular wage
- Public holidays: 300% of the regular wage
Employee Notice in Vietnam
The notice period in Vietnam varies depending on the type of employment contract. Here are the typical notice periods for different types of contracts:
- Seasonal Contracts (lasting less than one year): Employees and employers are required to provide a notice period of 3 working days if they wish to terminate the contract prematurely.
- Fixed-Term Labor Contracts: If an employment contract has a fixed term, the notice period is typically 30 days.
- Indefinite-Term Labor Contracts: For indefinite-term labor contracts, the notice period is 45 days.
Termination in Vietnam
Terminated employees (except those dismissed for a breach of company rules) who have worked for an employer for at least one year are entitled to severance payments. The severance amount is calculated as half a month’s wage for each year of employment. Severance is not required if the employee has been absent from work without a justifiable reason for five consecutive working days or more. Additionally, if the employer has made contributions to the employee’s unemployment insurance fund, they are not obligated to pay severance for the duration of time that the employee participated in the unemployment insurance fund.
If you’d like to learn more about how Invest Talent can assist with your recruitment needs or have questions about navigating the recruitment landscape in Vietnam, we invite you to book a free meeting or chat with us to explore the possibilities.
Please feel free contact Ms Thư via [email protected] or Whatsapp/phone +84 822646020