If you’re hiring in Vietnam, you need to understand your obligations before your first employee starts. Vietnam’s Labor Code sets clear minimums for leave entitlements, parental benefits, and social insurance contributions, and the penalties for getting it wrong aren’t trivial. This guide covers what you’re required to provide, how the Social Insurance fund works in practice, and where an Employer of Record can take the administrative load off your team.
Annual leave
Employees in Vietnam are entitled to a minimum of 12 working days of paid annual leave per year, provided they’ve completed at least 12 months of service. That minimum increases by one day for every five years of service with the same employer: 13 days at five years, 14 days at ten years, and so on.
Leave accrues throughout the year, so employees don’t have to wait until January to use it. You can also advance leave before it’s fully accrued if both parties agree.
One important detail: employees on probation don’t accrue annual leave. The clock starts only once they’ve transitioned to a full employment contract.
Public holidays
Vietnam has 11 statutory public holidays per year. On top of that, foreign employees are entitled to one additional paid day off for their home country’s national day. You’ll need to track the nationality of each foreign hire and apply this correctly.
Sick leave
When an employee is sick, the cost doesn’t fall on you directly. Sick leave in Vietnam is paid by the Social Insurance (SI) fund, not the employer, at 75% of the employee’s contribution base.
The number of days an employee can take depends on how long they’ve been contributing to compulsory social insurance. Employees with 15 or more years of SI contributions can take up to 30 days of paid sick leave per year. Employees with shorter contribution histories have lower entitlements.
To access sick leave pay, employees must provide a medical certificate. Your role as the employer is to submit the relevant documentation to the SI fund rather than to pay sick wages out of pocket.
Maternity leave
Birth mothers are entitled to six months of paid maternity leave in Vietnam. This is one of the more generous entitlements in the region, and it’s fully funded by the Social Insurance fund at 100% of the employee’s average monthly contribution base over the previous six months. You don’t pay maternity wages directly.
After the paid six-month period, mothers can take an additional 30 working days of unpaid leave if they need more time to recover. This is their right under the Labor Code, and you’ll need to hold their position accordingly.
Paternity leave
Fathers whose partners give birth are entitled to paid paternity leave, also funded by the SI fund rather than the employer. The entitlement varies based on the circumstances of the birth:
- Normal single birth: 5 working days
- Single birth via C-section or premature birth (under 32 weeks): 7 working days
- Twins (normal birth): 10 working days
- Twins (C-section): 14 working days
Leave must be taken within 30 days of the child’s birth. Employees must be contributing to compulsory social insurance to qualify, so this entitlement doesn’t apply to workers who haven’t yet met that threshold.
Social, health, and unemployment insurance
Vietnam’s SHUI system (Social, Health, and Unemployment Insurance) is the backbone of employee benefits in the country. Both employers and employees contribute, and the contributions fund the sick leave, maternity, and paternity payments described above. Understanding your share of these contributions is essential for accurate payroll budgeting.
What shui covers
Social insurance covers sickness, maternity, occupational accidents, retirement, and survivorship benefits. Health insurance provides access to the public healthcare system. Unemployment insurance provides short-term income support if an employee loses their job. Together, these three schemes form the statutory benefits package that every covered employee receives.
Contribution rates and caps
The contribution rates are split between employer and employee and applied to the employee’s monthly contribution base, which is capped at VND 46,800,000 per month for SI purposes.
Social insurance: Employer 17.5%, employee 8%
Health insurance: Employer 3%, employee 1.5%
Unemployment insurance: Employer 1%, employee 1%
One thing to note: foreign employees are exempt from unemployment insurance contributions. So if you’re building a team of expatriate hires, you’ll drop that 1% employer contribution from your calculations for those individuals.
Managing vietnamese benefits through an Employer of Record
Tracking leave accruals, calculating SHUI contributions, submitting claims to the Social Insurance fund, and staying current with Labor Code changes requires ongoing attention. For many foreign companies, that’s a significant operational overhead, especially when Vietnam is one market among several.
An Employer of Record (EOR) takes on legal employment responsibility in Vietnam on your behalf. The EOR handles SHUI registration and contributions, manages leave entitlements, processes maternity and paternity claims with the SI fund, and ensures your team is compliant with local labor law without you needing to set up a local entity.
If you’re evaluating your options, comparing EOR services helps you understand what each provider covers and where the gaps are.
Book a demo to see how RemotePass manages Vietnamese leave and benefits on your behalf.
Frequently asked questions
Does the employer pay for maternity or sick leave in vietnam?
No. Both maternity leave and sick leave are paid by the Social Insurance fund, not the employer. Maternity leave is paid at 100% of the contribution base; sick leave is paid at 75%. Your obligation is to ensure employees are correctly registered with the SI fund so they can access these payments.
How does annual leave accrue for new hires?
Leave doesn’t accrue during the probation period. Once an employee moves onto a full employment contract, they begin accruing leave. The statutory minimum is 12 working days per year, increasing by one day for every five years of continuous service with your company.
Are foreign employees entitled to the same leave as vietnamese nationals?
Yes, in most respects. Foreign employees receive the same statutory annual leave, sick leave, and parental leave entitlements. The one difference is that foreign employees are also entitled to one paid day off for their home country’s national day, on top of Vietnam’s 11 statutory public holidays.
Do foreign employees contribute to unemployment insurance?
No. Foreign employees are exempt from unemployment insurance contributions, for both the employer and employee portions. All other SHUI contributions apply in the same way as for Vietnamese national employees.
