Vietnam changed more payroll rules in 2026 than any other market in the region. Personal income tax deductions rose, the bracket count fell from seven to five, regional minimum wages went up, and the social insurance contribution cap moves again in July. This guide sets out the current rates, the deadlines, and the ways to run payroll, whether you use your own entity or outsource it to AYP.
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Running payroll in Vietnam means withholding personal income tax each month and paying three compulsory insurances on top of salary, against caps that are set by two different benchmarks. None of it is conceptually hard. The difficulty is that the numbers move often, and 2026 moved more of them at once than usual, with a further change landing mid-year.
This guide covers what employers are legally required to do: the 2026 contribution rates and caps, the new tax brackets and deductions, the regional minimum wages, the filing calendar, and the ways to actually run payroll once you have staff on the ground. It sits alongside AYP's wider APAC payroll services and the full payroll country guides.
The table below is the quick reference most employers need. Rates and caps are current for 2026.
Two bodies matter most. Vietnam Social Security administers social, health and unemployment insurance, and the tax authority under the Ministry of Finance handles personal income tax. Labour terms, including the regional minimum wage, come from government decrees.
Payroll is processed monthly and paid in Vietnamese Dong on a date fixed in the labour contract. The tax year follows the calendar. Employers withhold personal income tax at source each month, pay the three insurances on top of salary, and reconcile tax annually.
The framework rests on the Labour Code 2019, the Social Insurance Law 2024 which took effect on 1 July 2025, and the Personal Income Tax Law as amended for 2026. Foreign employees on labour contracts of at least twelve months are covered by compulsory social insurance in the same way as local staff.
This is where 2026 changed most. Under Resolution 110/2025/UBTVQH15, the monthly personal deduction rose from VND 11 million to VND 15.5 million, and the deduction for each dependant rose from VND 4.4 million to VND 6.2 million, applying to income earned from 1 January 2026. The amended Personal Income Tax Law also cut the resident bracket count from seven to five, keeping 35% as the top rate.
Taxable income is gross salary less compulsory insurance contributions and the personal and dependant deductions. In practice, a resident with no dependants pays no tax until monthly income is around VND 17 million.
Non-residents, meaning individuals in Vietnam for fewer than 183 days in a tax year without a permanent residence, are taxed at a flat 20% on Vietnam-sourced employment income with no personal deductions.
Three insurances are paid on top of salary: social insurance, health insurance and unemployment insurance. The employer carries roughly twice the employee's share. The employer's 17.5% social insurance portion breaks down into 3% for sickness and maternity, 14% for retirement and survivorship, and 0.5% for occupational accident and disease.
The two caps use different benchmarks, which is a common source of error. Social and health insurance are capped at twenty times the reference level, currently VND 2,340,000, giving a ceiling of VND 46,800,000 a month. That reference level rises to VND 2,530,000 on 1 July 2026, lifting the ceiling to VND 50,600,000, so payroll set up earlier in the year will need updating mid-year. Unemployment insurance is capped separately at twenty times the regional minimum wage, which in Region I means VND 106,200,000 a month.
Employers also pay a trade union fee of 2% of the social insurance salary fund.
Vietnam sets its minimum wage by region rather than nationally. Decree 293/2025/ND-CP raised all four regions by an average of 7.2% with effect from 1 January 2026. Region I covers the main urban and industrial centres including Hanoi, Ho Chi Minh City, Hai Phong and Da Nang, and the rates step down from there.
Standard working hours are 8 a day and 48 a week under the Labour Code. Overtime is capped at 40 hours a month and, for most sectors, 200 hours a year, extended to 300 hours in specified industries. Premiums are calculated on the normal hourly rate.
Employees are entitled to at least 12 days of paid annual leave, rising by one day for every five years of service with the same employer.
Insurance contributions are settled monthly, while personal income tax can be declared monthly or quarterly depending on the size of the employer's withholding.
Most payroll problems for foreign employers in Vietnam come from a handful of recurring issues rather than the base calculations.
The first is the pace of change. In a single year the tax deductions rose, the bracket structure changed, minimum wages went up, and the insurance cap is due to move again in July. Payroll configured in January will be wrong by the second half of the year unless someone is tracking it.
The second is the two different caps. Social and health insurance are capped against the reference level, while unemployment insurance is capped against the regional minimum wage. Applying one benchmark to all three is a frequent error, and it shows up immediately for higher earners.
The third is region assignment. Minimum wage and the unemployment insurance cap both depend on which of the four regions the workplace sits in, so companies with sites in more than one region carry more than one set of figures.
The fourth is foreign staff. Foreign employees on labour contracts of twelve months or more fall inside compulsory social insurance, which employers new to Vietnam sometimes assume does not apply to them.
Once you have people to pay, there are three practical ways to handle Vietnamese payroll, and the right one depends on whether you already have a local entity and how many staff you expect to hire.
Building payroll in-house gives full control but needs local expertise and someone watching for new decrees. A local provider takes the processing off your plate while you keep the employer relationship. Outsourced or managed payroll goes further, covering tax withholding, the three insurances, the trade union fee and reporting as a single service.
If you have not set up a Vietnamese entity yet, or you want to hire before you do, an Employer of Record is the usual route, since it lets you employ staff compliantly without your own local company. That is a broader hiring decision than payroll alone, so it is covered separately in AYP's Employer of Record Vietnam service and the guide to hiring in Vietnam. For a comparison of running payroll internally against outsourcing it, AYP's team has written on in-house versus outsourced payroll.
AYP handles Vietnamese payroll for companies that would rather not track decree changes themselves. The platform withholds personal income tax under the current brackets and deductions, calculates and files social, health and unemployment insurance against the right cap for each, applies the correct regional minimum wage, handles the trade union fee, and issues payslips. Pricing is a predictable monthly fee, set out on the pricing page.
The same team supports payroll across 18 Asian markets, so a company scaling from Vietnam into the wider region keeps one provider rather than stitching together local vendors. To see how it maps to your headcount, speak to the AYP team. Employers new to the process can also read AYP's note on the common payroll mistakes businesses make.
Employers contribute 21.5% of salary, made up of 17.5% social insurance, 3% health insurance and 1% unemployment insurance. Employees contribute 10.5%, made up of 8%, 1.5% and 1%. Employers also pay a trade union fee of 2% of the social insurance salary fund.
From income earned on 1 January 2026, the monthly personal deduction rose from VND 11 million to VND 15.5 million and the dependant deduction from VND 4.4 million to VND 6.2 million, under Resolution 110/2025/UBTVQH15. The resident bracket count also fell from seven to five, with 35% remaining the top rate.
Minimum wage is set by region. From 1 January 2026 under Decree 293/2025/ND-CP the monthly rates are VND 5,310,000 in Region I, VND 4,730,000 in Region II, VND 4,140,000 in Region III and VND 3,700,000 in Region IV, an average increase of about 7.2%.
Social and health insurance are capped at twenty times the reference level, giving VND 46,800,000 a month while the reference level is VND 2,340,000. That level rises to VND 2,530,000 on 1 July 2026, lifting the cap to VND 50,600,000. Unemployment insurance uses a separate cap of twenty times the regional minimum wage.
Not directly through a standard payroll provider, which needs an entity to register with Vietnam Social Security and the tax authority. Employers who want to hire and pay staff before setting up a company typically use an Employer of Record instead.