Payroll Administration

Vietnam's Salary System

Dual-track minimum wage

Vietnam’s basic wage system consists of a “general minimum wage” (mainly used for state-owned enterprise salaries and social security caps) and a “regional minimum wage” (applicable to private and foreign-invested enterprises). From January 1, 2026, the minimum wage in Vietnam’s four development regions increased by an average of 7.2%.

Probationary period benefits and overtime pay

Probationary Period Salary: Legally mandated, during the probationary period, the employer’s salary must not be less than 85% of the formally agreed-upon salary for the position.
Overtime Pay: Vietnam implements strict overtime penalty premiums. Overtime on normal working days is paid at 150% of the basic hourly wage; overtime on weekends and rest days is paid at 200%; overtime on statutory public holidays or during the Lunar New Year is paid at 300% (and this is an additional payment on top of the regular base salary).
Night Shift Allowance: If a night shift (10 PM to 6 AM the following day) is scheduled, in addition to the above premiums, a night shift allowance equivalent to 20% of the day shift salary will be added.

Severance Pay and Settlement

For employees who have served the company continuously for 12 months (and have not been dismissed for serious misconduct), regardless of contract expiration or legal layoffs, the employer is required to pay statutory severance pay.

Payment Standard: For each full year of service, pay the equivalent of half a month’s average salary.
Calculation Basis: The average actual total compensation (including base salary, allowances, and fixed benefits) for the six consecutive months prior to departure.
Settlement Deadline: All wages, annual leave compensation, and severance pay must be settled in full within 14 working days of termination of the employment relationship (maximum 30 days in special circumstances).

Personal income tax (PIT) exemption for high-tech professionals

To enhance the attractiveness of after-tax net income for highly skilled positions, the Digital Technology Industry Law, to be enacted in 2026, grants top talent significant tax privileges. Engineering and technical personnel and experts engaged in core areas such as semiconductor chip R&D and artificial intelligence architecture within national centralized digital technology parks can enjoy a full personal income tax (PIT) exemption for their related project salaries for up to 5 years.

Our advantages

Experienced payroll team, familiar with local regulations and industry standards
High-standard data security and confidentiality mechanisms
Reduced corporate administrative costs and error risks
Ensuring employees receive their salaries on time and accurately

Kindly contact us to learn more about our payroll administration services.

MSMC ASIA

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