Vietnam has become an appealing destination for businesses expanding in Southeast Asia. However, hiring employees here can be challenging without knowledge of local customs, regulations, and recruitment practices.
In this article, we will explore vital aspects of the hiring process, offering insights into recruitment practices, legal requirements, and cultural considerations. Understanding Vietnam’s labor market will enable you to make informed decisions and build a strong team aligned with your company’s goals and values.
Understanding The Salaries In Vietnam
Salary components in Vietnam
In Vietnam, an employee’s monthly salary package usually comprises their gross salary and mandatory insurance contributions when they hire employees in Vietnam. Salaries and bonuses are subject to personal income taxes (PIT) in Vietnam, calculated after deducting mandatory insurance contributions.
In some cases, the gross salary may also include overtime pay, allowances, and bonuses, as well as additional benefits.
Moreover, it’s important to note that Vietnamese employees must be paid in Vietnamese Dong, even if they work for foreign companies. Foreign employers have the option to set salaries in either Vietnamese Dong or US Dollars when hiring employees in Vietnam, but if they choose the latter, the salary must be converted into Vietnamese Dong. In such cases, compulsory social insurance, personal income tax, and trade union payments should also be converted into Vietnamese Dong using the Vietnamese government’s official foreign exchange rate.
Allowances and benefits in Vietnam:
An employee may be entitled to several kinds of allowances and monetary or non-monetary benefits designed to retain staff. Some of these benefits are non-taxable, including:
- Life insurance and optional insurance.
- Payments for housing rent, power, water, and related services if they exceed 15 percent of the employee’s total taxable income.
- Telephone allowance.
- Stationery allowance.
- Uniform allowance (in kind or cash) up to 5 million VND.
- Lunch allowance up to 730,000 VND.
- Transportation allowances.
- Training allowances.
- Employer support for fatal diseases or illnesses.
- Round-trip flight tickets to the home country once a year for foreign employees or Vietnamese employees working abroad.
- Tuition fees for children of foreign workers studying in Vietnam or Vietnamese workers’ children studying overseas from kindergarten to high school.
- Personal incomes received from associations and organizations if the employees are members, and the funding is from the State budget or managed according to State regulations.
- Payments made by the employer for deploying and rotating foreign workers to work in Vietnam, following industry standards such as oil and gas and mining.
However, certain prefixed lump sum amounts (known as “khoan chi” amounts) designated for telephone calls and services, stationery, uniforms, and per diem allowances are exempt from taxes as long as they adhere to the levels specified in the regulations.
Foreigners that work in Vietnam are also exempted from PIT on various benefits such as relocation allowances for moving into the country, airfare to their home country, and education fees for their children.
Paying the 13th salary in Vietnam
One effective way to encourage employees to stay with your company is by offering a 13th salary, also known as Tet bonus, which amounts to more than one month’s salary.
In Vietnam, salary information is often openly shared, and employees are aware of prevailing salary levels. Consequently, it’s common for individuals to request a raise before completing their first year if they believe others in similar positions are earning higher salaries. To maintain a satisfied and committed workforce, businesses need to stay competitive with their compensation packages and be responsive to employees’ salary expectations when looking to hire employees in Vietnam.
Minimum wage rates by region
In Vietnam, there are two types of minimum wages:
- The common minimum wage: It is VND 1,800,000 (equivalent to approximately US$76.6). This common minimum wage is used to calculate salaries for employees in state-owned organizations and enterprises. It is also utilized to calculate the social contribution for all enterprises, with the maximum social contribution capped at 20 times the common minimum wage.
- Regional minimum wage: This wage is applicable to employees working in non-state enterprises and is determined based on different zones as defined by the government.
| Region | 2022 minimum monthly wage | 2022 minimum hourly wage |
| I | 4,680,000 VND (US$202) | 22,500 VND |
| II | 4,160,000 VND (US$179) | 20,000 VND |
| III | 3,640,000 VND (US$157) | 17,500 VND |
| IV | 3,250,000 VND (US$140) | 15,600 VND |
*Region I: covers urban Hanoi and Ho Chi Minh City
*Region II: covers rural Hanoi and Ho Chi Minh City along with Da Nang
*Region III: includes provincial cities and districts of Bac Ninh, Bac Giang, Hai Duong, Phu Tho, Binh Phuc and other provinces not listed in Region I and Region II
*Region IV covers remaining localities
Detailed information can be found within Decree 38/2022/ND-CP
In Vietnam, it is strictly prohibited for companies to pay unskilled employees monthly wages below the relevant minimum wage when looking to hire employees in Vietnam. This measure ensures fair compensation for workers and encourages skill development within the workforce.
2023 Salary Guide In Vietnam
We have collected data from Ho Chi Minh City and Hanoi, known for their higher salaries, but we’re focusing on job roles rather than geographical locations to make it simpler for you to compare and find relevant information. Whether you’re a job seeker or an employer, this guide provides valuable insights into salary trends across different industries and seniority levels in Vietnam.
Finance salaries in Vietnam
| Years of experience | Examples of positions | Monthly salary range
in Ho Chi Minh City and Hanoi (USD) |
| 0-2 | Retail Relationship Manager | 500 – 800 |
| 2-4 | Credit Approval Officer | 500 – 1,000 |
| 5-7 | Internal Audit Specialist | 1,500 – 2,500 |
| 7-10 | Head of Sales (Corporate Banking) | 4,000 – 7,000 |
Legal salaries
| Years of experience | Examples of positions | Monthly salary range
in Ho Chi Minh City and Hanoi (USD) |
| 2-4 | Paralegal | 800 – 1,500 |
| 6-8 | Senior Associate | 3,000 – 10,000 |
| 8-10 | Legal Counsel | 6,000 – 15,000 |
Sales and Marketing salaries
| Years of experience | Examples of positions | Monthly salary range
in Ho Chi Minh City and Hanoi (USD) |
| 1-3 | Account Executive | 500 – 1,000 |
| 2-8 | Copywriter | 1,000 – 3,000 |
| 3-8 | Art Director | 1,500 – 3,000 |
| 8+ | Creative Director | 3,000 – 5,000 |
Administrative salaries
| Years of experience | Examples of positions | Monthly salary range
in Ho Chi Minh City and Hanoi (USD) |
| 0-2 | Receptionist | 400 – 700 |
| 2-4 | Personal Assistant | 1,000 – 2,000 |
| 4-6 | Office Manager | 1,500 – 3,000 |
| 7-10 | 2,000-6,000 | 2,000 – 6,000 |
Employees recruitment strategies in Vietnam
Negotiating salaries with job applicants
In the shortlisting process to hire employees in Vietnam, it is common to inquire about a candidate’s current or last salary. Generally, candidates anticipate a salary increase of around 10-50% when changing jobs.
At MD Law Firm, we advise employers to ask candidates about their expected salary first and then negotiate. Candidates are usually open to adjusting their initial request.
During the two-month probation period, it is standard to pay the candidate 85% of the proposed gross salary. This period allows the employer and employee to negotiate the employment contract, which will be formalized with the full salary after the probation is successfully completed.
Vietnamese candidates typically provide their desired salary as a net amount after taxes. However, we recommend signing the employment contracts with a pre-tax gross salary to simplify payroll calculations.
Salaries are paid on a monthly basis, and it is customary to provide a 13th salary, even if not explicitly requested when looking to hire employees in Vietnam.
The best time to hire employees in Vietnam
In Vietnam, the prime time for recruitment is the first two months following the Lunar New Year celebrations. It is customary for companies to pay the 13th salary before the Lunar New Year, and after this bonus, many employees start considering new job opportunities.
Based on MD Law Firm’s experience, candidates, especially younger ones, often leave their current jobs before securing a new position. As a result, the recruitment cycle can accelerate significantly right after the New Year.
Hiring foreigners in Vietnam
Presently, there are no strict rules regarding the ratio of foreign nationals to local employees that companies must follow in Vietnam. For expert-level positions, a foreigner can be hired if they possess at least three years of experience and higher education, both of which must be documented.
When applying for a work permit on behalf of a foreign employee, the employer should provide valid reasons. These could include international experience, English proficiency, and specialized skills relevant to the job. The Ministry or Department of Labor will review and approve work permit applications for foreigners on a case-by-case basis, taking into account each situation carefully.
Expertise and Guidance from MD Law Firm
MD Law Firm boasts a team of highly experienced and knowledgeable professionals who specialize in employment and labor laws in Vietnam. With a proven track record of assisting both local and foreign companies, MD Law Firm is well-equipped to navigate the intricacies of labor regulations, work permits, and contracts to help you recruit and retain top talent for your business.
With the assistance of MD Law Firm, you can streamline the process, mitigate potential risks, and position your business for success in this vibrant and promising market. Remember, staying compliant is not just a legal obligation; it is a strategic advantage that fosters a positive work environment and builds a solid foundation for your company’s growth in Vietnam.
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