Setting up payroll for foreign employees in Vietnam involves navigating a layered set of legal requirements — from obtaining the correct work authorisation to registering for social insurance and withholding personal income tax (PIT) at the right rate. For FDI companies, getting this right from day one is critical: non-compliant payroll is one of the most common triggers for tax and labour audits in Vietnam.
This guide covers the full payroll setup process for foreign employees as of 2026, based on the Labour Code 2019, Decree 152/2020/ND-CP on foreign workers, and the PIT Law as updated by Law 67/2025/QH15. Whether you are hiring your first expat or managing a team of 50, the steps below apply to all FDI employers in Vietnam.
| 17.5% Employer SI/HI/UI |
8% Employee SI/HI/UI |
5–35% Personal income tax |
30 days Typical setup time |
1. Step 1 — Obtain the Correct Work Authorisation
Before running payroll, every foreign employee must hold a valid work authorisation. Vietnam recognises two tracks: a Work Permit (Giấy phép lao động) for most hires, and a Work Permit Exemption Certificate for certain senior roles, intra-company transferees, and treaty beneficiaries.
| Track | Who applies | Processing time | Validity |
|---|---|---|---|
| Work Permit | Most foreign employees | 7–10 working days | Up to 2 years (renewable) |
| Work Permit Exemption | Board members, legal reps, intra-company transfers <30 days | 5–7 working days | Up to 2 years |
2. Step 2 — Register for Social Insurance
Since 1 December 2018, foreign employees holding work permits (not exemption certificates) in Vietnam are required to participate in the Vietnamese social insurance (SI) system. The contribution base is the contractual salary, capped at 20 times the statutory minimum salary for SI purposes.
| Fund | Employer rate | Employee rate |
|---|---|---|
| Social Insurance (SI) | 14% | 8% |
| Health Insurance (HI) | 3% | 1.5% |
| Unemployment Insurance (UI) | 1% (Vietnamese nationals only) | 1% (Vietnamese nationals only) |
| Total | 17.5% (18.5% for VN nationals) | 9.5% (10.5% for VN nationals) |
3. Step 3 — Withhold Personal Income Tax (PIT)
Vietnam applies a progressive PIT schedule to resident employees (those present in Vietnam for 183+ days per tax year). Non-residents are taxed at a flat 20% on Vietnam-sourced income.
| Monthly taxable income (VND) | PIT rate |
|---|---|
| Up to 5,000,000 | 5% |
| 5,000,001 – 10,000,000 | 10% |
| 10,000,001 – 18,000,000 | 15% |
| 18,000,001 – 32,000,000 | 20% |
| 32,000,001 – 52,000,000 | 25% |
| 52,000,001 – 80,000,000 | 30% |
| Over 80,000,000 | 35% |
Resident employees are entitled to a personal deduction of VND 11,000,000/month and a dependent deduction of VND 4,400,000/month per dependent. Housing allowances paid by employers are taxable but capped at 15% of total income.
4. Payroll Compliance Deadlines
| Obligation | Frequency | Deadline |
|---|---|---|
| PIT withholding and remittance | Monthly | 20th of following month |
| Social insurance contribution | Monthly | Last day of month |
| Annual PIT finalisation | Annual | 31 March (employer); 30 April (individual) |
| PIT income certificates for employees | Annual | Upon request, within 10 working days |
Need to outsource payroll for your foreign employees in Vietnam?
TrustlineAX offers full-service payroll services in Vietnam — from work permit support to monthly payroll processing and annual PIT finalisation. Contact us for a free consultation.