Hiring & Building Your Team
·
20 min
Salaries, Social Insurance & Labor Law
What you are legally required to pay, the real total cost of an employee, and how not to get caught out by labor disputes.
Salaries, Social Insurance & Labor Law
Minimum Wage (2024)
Vietnam sets regional minimum wages. For HCMC (Zone 1):
- Minimum wage: 4,960,000 VND / month (~$200)
- Most businesses pay significantly above minimum to attract any reasonable talent
The True Cost of an Employee
When budgeting for staff, add ~23% on top of the base salary for mandatory contributions:
| Item | % of salary |
|---|---|
| Social insurance (employer) | 17.5% |
| Health insurance (employer) | 3% |
| Unemployment insurance (employer) | 1% |
| Trade union contribution | 2% |
| Total employer overhead | ~23.5% |
Example: an employee on $600/month costs the company ~$740/month all-in, plus any bonus.
Key Labor Law Requirements
- Labor contract — required for all employees working more than 1 month. Must specify role, salary, hours, probation period
- Probation — maximum 60 days for professional roles, 30 days for others; employer can terminate during probation with 3 days notice
- Termination notice — 30–45 days for indefinite contracts; severance pay required after 12+ months
- Annual leave — minimum 12 days per year; increases with seniority
- 13th month salary (Tết bonus) — not legally mandatory but universally expected; failure to pay causes serious staff retention problems
Key risk: Labor disputes are common and the Vietnamese labor courts strongly favor employees. Use proper written contracts from day one, keep payroll records, and when letting someone go, follow the process exactly. A wrongful termination can cost 6–12 months of severance.