Introduction
Vietnam labor law 2025 sets the legal foundation for all employment activities in the country. It regulates contracts, probation, social insurance, payroll, and tax obligations.
For Chinese employers and investors in Vietnam, understanding these rules is critical. Compliance with labor law in Vietnam ensures smooth hiring, proper tax handling, and avoids costly penalties.
This guide provides a practical overview of Vietnam labor law for foreigners and local staff. It covers recruitment steps, probation rules, Vietnam social insurance contribution, and payroll and personal income tax (PIT) compliance.
Recruitment & Employment Contracts in Vietnam
Common Recruitment Methods
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Posting job ads on free or paid platforms such as VietnamWorks, TopCV, CareerViet, LinkedIn, and Facebook. ( Find more Vietnam recruitment websites )
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Internal recruitment or employee referrals.
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Using headhunter services for senior or specialized positions.
➡️ Read more Vietnam Recruitment Websites for Foreign Employers here.
Standard Recruitment Process
Step 1: Define Hiring Needs
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Clearly identify recruitment requirements.
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Specify number of employees, job titles, and detailed job descriptions.
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Set standards for education, skills, and work experience.
Step 2: Develop a Recruitment Plan
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Prepare a detailed plan covering timeline, HR resources, and budget.
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Select suitable recruitment channels such as the company website, social media, or online job portals.
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Create backup plans to ensure smooth execution.
Step 3: Search for Candidates
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Draft a detailed job description including responsibilities, qualifications, and benefits.
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Publish job postings on major recruitment platforms.
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Use candidate search tools to proactively approach talent.
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Leverage networks and referrals to connect with potential candidates.
Step 4: Screening & Shortlisting
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Review CVs against pre-set standards.
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Select candidates who best match the requirements for interviews.
Step 5: Interviews
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Conduct in-person or online interviews to assess ability, experience, and personality.
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Ask job-related questions to evaluate skills and past work history.
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Observe how candidates respond and handle situations.
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Note: Depending on the role, 1–2 rounds of interviews may be conducted.
Step 6: Evaluation & Offer
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Summarize interview results and evaluate against established standards.
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Make final hiring decisions and notify successful candidates.
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Issue an offer letter and complete onboarding procedures.
Step 7: Probation Assessment
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Direct managers are responsible for end-of-probation evaluation.
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Criteria include professional skills, work attitude, and teamwork ability.
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Results determine whether to sign an official labor contract or terminate probation.
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Timeline: If the employee passes, the company must sign the labor contract within 1–3 days.
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Under the probation period Vietnam labor law, probation can last 6–60 days, and salary must be at least 85% of the official rate.
Step 8: Signing the Labor Contract
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Employers must sign either a probation contract or a labor contract.
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According to labor law in Vietnam, contracts can be definite-term, indefinite-term, or seasonal.
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Note: Under the 2024 Social Insurance Law, employees on probation are not required to contribute to social insurance. However, if monthly income reaches or exceeds 2,000,000 VND, personal income tax (PIT) must be withheld.
➡️ Read more Vietnam Contract Templates for Foreign Entrepreneurs here.
Social Insurance & Payroll Compliance in Vietnam
Conditions for Mandatory Social Insurance Contribution
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Employees who sign a labor contract with a term of one month or longer must participate in Social Insurance (SI/BHXH), Health Insurance (HI/BHYT), and Unemployment Insurance (UI/BHTN).
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Employees on probation are exempt if the employer signs a separate probation contract. However, if probation is included in the labor contract, contributions must start from the contract’s effective date.
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For Chinese employers in Vietnam, this means that both local hires and foreign workers with valid contracts are subject to Vietnam’s insurance obligations.
Contribution Base (Effective from July 1, 2025)
According to the 2024 Social Insurance Law:
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The contribution base is the employee’s monthly salary, including position-based salary, allowances, and other regular payments.
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During work suspension, if employees still receive wages equal to or higher than the minimum base, contributions must be paid.
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Certain employee categories have their contribution base set by the Government.
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Other categories may choose their contribution base but not lower than the statutory reference salary and not higher than 20 times that reference. After 12 months, employees may adjust the chosen base.
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The minimum base is equal to the statutory reference salary; the maximum is 20 times that figure.
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As of Decree 73/2024/NĐ-CP, the current reference salary is 2,340,000 VND per month.
Payment Method and Deadline
Employers can choose different payment cycles:
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Monthly payment: No later than the last day of the following month.
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Quarterly or semi-annual payment: No later than the last day of the month following the cycle.
Contribution Rates (Effective from July 1, 2025)
Under the 2024 Social Insurance Law:
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3% of salary goes to the sickness and maternity fund.
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22% of salary goes to the retirement and survivorship fund.
Based on combined requirements for Social Insurance (SI), Health Insurance (HI), and Unemployment Insurance (UI), the contribution rates are:
|
Payer |
Retirement & Survivorship |
Sickness & Maternity |
Occupational Accident & Disease |
SI Total |
HI |
UI |
Employee Share |
|
Employer |
14% |
3% |
0.5% |
17.5% |
3% |
1% |
21.5% |
|
Employee |
8% |
– |
– |
8% |
1.5% |
1% |
10.5% |
➡️ Total contribution: 32% of the salary base (21.5% by employer, 10.5% by employee).
Key Takeaways for Chinese Employers
For Chinese companies investing in Vietnam, compliance with Vietnam labor law 2025 is essential to avoid legal risks and financial penalties.
- Employers must carefully follow the recruitment process, from job posting to contract signing, in line with Vietnam employment regulations.
- During probation, employees are entitled to at least 85% of their salary, and a proper labor contract must be signed after evaluation.
- Both local and foreign staff, including Chinese expatriates, are required to join the mandatory insurance system once they have a labor contract of one month or more.
- Payroll must also integrate Vietnam social insurance contributions with personal income tax (PIT) withholding to ensure full payroll and tax compliance.
- Partnering with professional HR or payroll services can help Chinese investors reduce risks and stay compliant in Vietnam.
Conclusion
Navigating Vietnam labor law 2025 requires careful attention to recruitment procedures, labor contracts, social insurance contributions, and payroll compliance. For Chinese employers in Vietnam, understanding these rules is the key to building a compliant and successful workforce.
👉 If your business is planning to expand into Vietnam, partner with RateMate to receive professional support and ensure compliance with Vietnam labor law from the very first step.
FAQs for Vietnam Labor Law 2025
Do Chinese employees working in Vietnam need to pay social insurance?
Yes. Under Vietnam labor law for foreigners, employees with a labor contract of one month or more must join compulsory social insurance, unless exempted by international agreements.
What is the probation period under Vietnam labor law?
The probation period Vietnam labor law allows 6–60 days depending on the job. Employees must be paid at least 85% of the official salary.
How is personal income tax (PIT) calculated for Chinese expatriates in Vietnam?
Residents are taxed on worldwide income, while non-residents (stay less than 183 days per year) pay PIT only on Vietnam-sourced income.
What are the employer’s responsibilities in Vietnam payroll and tax compliance?
Employers must calculate salaries, withhold PIT, and pay Vietnam social insurance contributions on time to avoid penalties.
What happens if a company does not pay social insurance on time?
Late or missing contributions can lead to heavy fines, interest charges, and reputational risks under Vietnam employment regulations.
