In recent years, Vietnam has become a popular choice for overseas expansion among many companies. As Vietnam's economy continues developing with stronger foreign investment support, its labor market is increasingly active. For companies considering Vietnam recruitment, understanding pay cycles there is crucial. This article introduces Vietnam's pay cycles and relevant information employers need to know.
1. Pay Cycles in Vietnam
Typically in Vietnam, companies' pay cycle is monthly, usually dispersing wages on the last working day of the month or first day of the following month. Most Vietnamese companies use bank transfers for wage payments, requiring employee bank account information.
Additionally, Vietnam mandates a 13-month salary system where companies pay 13 months of wages annually - 12 normal salary months plus one month as an annual bonus. This system is widely adopted across Vietnam.
2. Tax Policies in Vietnam
Employee salary income in Vietnam is subject to personal income tax. Tax rates range from 5% to 35% according to 5brackets based on income level under Vietnamese tax law.
Companies also pay 20% corporate income tax on profits according to Vietnamese tax law. Special industries or regions may differ.
3. Vietnam's Social Insurance System
Companies must contribute to employees' retirement, medical, unemployment and occupational disease insurance according to social insurance law at rates determined locally.
4. Vietnam's Public Holidays and Overtime Policies
Public holidays include Lunar New Year, Liberation/Reunification Days, Labor Day, National Day. Paid leave and festive allowances are given.
Maximum overtime is 2 hours/day, 12 hours/week paid at 150-300% normal wages depending on hours/dates under Vietnamese labor law.
In summary, understanding relevant compensation policies and regulations is essential for Vietnam recruitment compliance and risk management. Following local guidance aids effective operations.