Vietnam has become one of Southeast Asia’s most active hiring destinations, and more foreign companies are building teams there every year. But before you put someone on payroll, you need a clear picture of the tax and contribution obligations that sit on your side of the employment relationship. This guide covers the full employer cost stack: SHUI contributions, regional minimum wages, personal income tax withholding, and the rules that apply differently to foreign nationals.
Shui contributions: the core employer cost
Vietnam’s social insurance framework is known by the acronym SHUI, covering social insurance, health insurance, and unemployment insurance. Each component has its own rate, its own cap, and its own eligibility rules. Here’s how the employer side breaks down.
Social and health insurance
You contribute 17.5% of the contribution base for social insurance (SI) and 3% for health insurance (HI). Combined, that’s 20.5% before the other components. Both contributions are calculated against the same capped base, which sits at VND 46,800,000 per month in 2026. That figure is fixed at 20 times the reference salary of VND 2,340,000.
If an employee’s contractual wage exceeds the cap, you still only contribute on VND 46,800,000. The excess doesn’t increase your SI or HI liability.
Unemployment insurance
Unemployment insurance (UI) carries an employer rate of 1%. The contribution base for UI is separate: it’s capped at 20 times the regional minimum wage for the area where the employee works, which means the effective cap differs depending on location. We cover the regional minimums in a dedicated section below.
Trade union fee
On top of the three SHUI components, you’re required to pay a trade union fee of 2% of the SI contribution base. This applies regardless of whether your employees are union members. It’s a payroll-level obligation, not an optional contribution.
Put it all together and your total employer on-cost sits at approximately 23.5% of the contribution base.
Contribution base and caps
The contribution base for SI and HI is the employee’s contractual salary, capped at VND 46,800,000 per month. For UI, the cap is calculated separately by region using the applicable minimum wage. The practical effect is that higher-earning employees don’t generate proportionally higher contributions once their salary passes the relevant threshold.
Employees also contribute from their side. You’re responsible for withholding 8% for SI, 1.5% for HI, and 1% for UI from each paycheck and remitting it on their behalf. These amounts come out of the employee’s gross pay, not out of your pocket, but the remittance obligation sits with you.
Rules for foreign employees
Contributions work differently for foreign nationals. Health insurance is mandatory for any foreign employee on a contract of three months or more. Social insurance becomes mandatory when the contract runs to 12 months or longer. Unemployment insurance doesn’t apply to foreign employees at all, regardless of contract length.
This means a foreign employee on a short-term engagement of under three months sits entirely outside the SHUI system. Once contracts cross those thresholds, the standard contribution rules kick in, and you need to be enrolling them accordingly.
Employment contracts with foreign nationals must be in Vietnamese. A bilingual version is required, but Vietnamese is the legally operative language, so that’s the one that needs to be accurate.
Regional minimum wages in 2026
Vietnam divides the country into four wage regions, and the minimums are set at the regional level. Decree 293/2025/ND-CP brought updated rates into effect on January 1, 2026.
| Region | Monthly minimum | Hourly minimum |
|---|---|---|
| Region I (inner Hanoi and Ho Chi Minh City) | VND 5,310,000 | VND 25,500 |
| Region II (outer Hanoi/HCMC, Da Nang, Hai Phong) | VND 4,730,000 | VND 22,700 |
| Region III | VND 4,140,000 | VND 20,000 |
| Region IV | VND 3,700,000 | VND 17,800 |
These figures matter for two reasons. First, you can’t pay below them. Second, they set the UI contribution base cap for employees in each zone. If you’re hiring across multiple locations, you’ll have different UI caps to track by site.
Personal income tax withholding
As the employer, you’re responsible for withholding personal income tax (PIT) from each employee’s monthly salary and remitting it to the tax authority. Payroll runs monthly, with payment due on the 28th. Here’s what that calculation involves.
How pit is calculated
Vietnam uses a seven-bracket progressive system. Taxable income starts at the bottom bracket of 5% on income up to VND 10,000,000 per month and rises through intermediate rates up to 35% on income above VND 100,000,000 per month. Taxable income is gross salary minus mandatory deductions (including the employee’s SHUI contributions) minus the applicable personal and dependent allowances.
The 2026 allowance increases
Resolution 110/2025/UBTVQH15 increased both key allowances, effective January 1, 2026. The personal allowance is now VND 15,500,000 per month, up from VND 11,000,000. The dependent allowance increased to VND 6,200,000 per month per dependent, up from VND 4,400,000.
In practical terms, the higher personal allowance means a single employee with no dependents has to earn above VND 15,500,000 per month in taxable income before any PIT liability arises. These aren’t small changes, and they’ll affect how you model payroll costs for your Vietnamese team.
Hiring in vietnam through an Employer of Record
Foreign companies don’t have an automatic right to employ workers directly in Vietnam. Without a registered legal entity in the country, you’ll need a different route. The most common solution is an Employer of Record (EOR), which holds the employment relationship on your behalf, handles all payroll and contributions, and keeps you compliant with Vietnamese labor law from day one.
Understanding what an EOR is is worth doing before you commit to a structure, especially if you’re also weighing the option of engaging independent contractors rather than employees. The right EOR services provider will manage SHUI enrollment, PIT withholding, trade union fees, and contract compliance so that none of these details fall through the cracks on your end.
Book a demo to see how RemotePass handles Vietnamese payroll and compliance end to end.
Frequently asked questions
What is the total employer contribution rate in vietnam?
The employer’s SHUI contributions total 21.5% of the contribution base (17.5% SI, 3% HI, 1% UI), plus a 2% trade union fee on the SI base. That brings the combined employer on-cost to approximately 23.5%.
Do contribution caps apply to all three shui components?
SI and HI share the same cap of VND 46,800,000 per month. The UI cap is calculated separately at 20 times the regional minimum wage, so it varies depending on where your employee is based.
Are foreign employees subject to the same shui rules as vietnamese employees?
Not entirely. Foreign employees need to be enrolled in HI once their contract reaches three months and in SI once it reaches 12 months. They’re exempt from UI contributions regardless of contract length.
When did the 2026 pit allowances take effect?
The updated allowances, VND 15,500,000 for the personal allowance and VND 6,200,000 per dependent, took effect on January 1, 2026, under Resolution 110/2025/UBTVQH15.
