Employer of record in Vietnam: costs, rules and how to hire
The most common mistake foreign employers make in Vietnam is issuing an English-only employment contract denominated in US dollars or euros, then discovering that Vietnamese law treats it as non-compliant from day one. Contracts involving a foreign party must be in Vietnamese or bilingual, with the Vietnamese version legally prevailing, and salary must be stated in Vietnamese dong. That single compliance gap can invalidate probation clauses, complicate termination, and expose an employer to full labour protections they thought they had structured around.
Beyond the contract form, the payroll economics deserve attention early. Employers carry a statutory social contribution rate of 21.5% of gross salary, broken down across social insurance, health insurance, unemployment insurance, and a trade union fee. Employees contribute a further 10.5% of gross. The average monthly wage sits at around 8,579,562 VND, and the statutory minimum is 4,960,000 VND per month, so the absolute cost of contributions is manageable in global terms, but the compliance architecture around them is not simple, particularly for foreign workers who must be enrolled in Vietnamese statutory schemes rather than covered by home-country arrangements alone.
Vietnam also has a labour force of over 57 million people and an unemployment rate of around 1.5%, which means competition for skilled workers is real. The thirteenth-month salary is customary here, not statutory, but skipping it in a competitive market is a meaningful retention risk.
How should you hire in Vietnam?
| Employer of Record (EOR) | Your own legal entity | Independent contractor | |
|---|---|---|---|
| Time to first hire | Days | Months | Immediate |
| Upfront cost | None | Incorporation, registrations, local counsel | None |
| Ongoing cost | From $49.99–$699/employee/month | Payroll, accounting, filings, benefits administration | Contractor invoices only |
| Best when | You want 1–5 hires fast, without a local entity or in-house payroll expertise. | You are building a long-term team (roughly 10+ employees) and want full control. | Genuinely project-based, independent work. Misclassifying an employee as a contractor carries real penalties. |
- Time to first hire
- Days
- Upfront cost
- None
- Ongoing cost
- From $49.99–$699/employee/month
- Best when
- You want 1–5 hires fast, without a local entity or in-house payroll expertise.
- Time to first hire
- Months
- Upfront cost
- Incorporation, registrations, local counsel
- Ongoing cost
- Payroll, accounting, filings, benefits administration
- Best when
- You are building a long-term team (roughly 10+ employees) and want full control.
- Time to first hire
- Immediate
- Upfront cost
- None
- Ongoing cost
- Contractor invoices only
- Best when
- Genuinely project-based, independent work. Misclassifying an employee as a contractor carries real penalties.
Rule of thumb: an EOR wins on speed and simplicity for the first handful of hires; once a team in Vietnam passes roughly ten people, running your own entity usually starts to win. Treat that as a risk-adjusted rule of thumb rather than a calculation. Registration and accounting are the cheap part; the costs that decide it are payroll software, local employment-law advice, pension administration and the statutory sick-pay and termination exposure you take on directly once you are the employer.
EOR pricing in Vietnam: providers covering Vietnam publish base fees from $49.99 to $699 per employee per month, before statutory employer costs. How EOR pricing works.
For an entity owner, the regulatory step that consumes the most time before a single foreign employee starts work is the labour demand registration. Vietnamese law requires employers to justify their need for foreign labour to a state authority and obtain written approval for each position at least 15 days before the scheduled start date. An EOR, already operating inside the Vietnamese system with established relationships and compliance processes, absorbs that step entirely. The same applies to enrolling foreign staff in mandatory social security, health, and unemployment insurance schemes, and to maintaining bilingual contracts that satisfy the Vietnamese-language requirement. These are not one-time setup tasks; they recur with every new hire and every contract amendment.
On the economics, setting up your own entity in Vietnam takes three to six months. An EOR can put someone on payroll in three to five days. For a single hire or a small initial team, the entity route means months of overhead before any work begins. The employer social contribution rate of 21.5% of gross applies regardless of which structure you use, so the cost of employment itself does not change. What changes is who manages the compliance, and in Vietnam that compliance layer is genuinely dense. In my experience, the labour demand registration requirement alone is enough to make most first-time Vietnam hirers reconsider going direct, at least until they have a local HR or legal team in place.
Contractor arrangements are worth a separate note here. Vietnam's labour authorities look at the actual working relationship, and a contractor who works regular hours under direct supervision, integrated into daily operations, is likely to be treated as an employee. The statutory protections that follow, including social insurance enrollment and leave entitlements, are not waivable by contract. For short-term, genuinely project-based work with clear deliverables and no day-to-day direction, a contractor structure can work. For anything that looks like ongoing employment, the risk is real and the correction is expensive.
Vietnam employment facts at a glance
Each row shows the year of the most recent citable source for that figure. Where a year looks old, that is the newest comprehensive source available, and we keep the sourced figure rather than substitute an unsourced newer one. Statutes may have changed since.
Across employer contributions, severance and notice combined, Vietnam ranks #4 of 192 in our Global Employer Burden Index.
Average salary in Vietnam by occupation
Gross monthly earnings of employees per ISCO-08 occupation group, in VND, from the ILO's official labour statistics. These are the latest published survey figures for Vietnam(reference year 2024), refreshed automatically when the ILO releases newer data. Survey earnings, not the statutory minimum wage above. Use them to benchmark an offer before an EOR quote turns it into total employer cost.
Source: ILOSTAT, the International Labour Organization's statistics database (average monthly earnings of employees, both sexes), reference year 2024.
What it costs to employ in Vietnam
Based on OECD 2026 aggregate data for a single earner at average wage.
What catches employers out in Vietnam
Vietnam's labour rules carry several requirements that are easy to miss if you are used to hiring in common-law or EU markets. Each of the items below has tripped up foreign employers who assumed the rules would resemble what they knew.
Prior state approval before hiring any foreign worker
Before recruiting a foreign employee, Vietnamese employers must register their labour demand with the competent state authority and obtain written approval for each position, at least 15 days before the planned start date. This is a separate step from the work permit process, and it requires demonstrating that no suitable local candidate is available. Foreign employers used to moving straight from offer letter to contract signing often miss this step entirely, which can invalidate the hire and delay the start date significantly.
Vietnamese-language contracts and VND salary denomination
When one party to a labour contract is a foreign national, the contract must be in Vietnamese or bilingual, with the Vietnamese version mandatory for legal validity and prevailing in any dispute. Salary must also be stated in Vietnamese dong, not solely in a foreign currency. English-only contracts denominated in USD or EUR are treated as non-compliant, which can undermine probation clauses and termination procedures that the employer believed were in place.
Hard statutory caps on overtime hours
Vietnam sets firm quantitative limits on overtime: no more than 50% of normal daily working hours as overtime, a combined ceiling of 12 hours in any single day, and a monthly cap of 40 overtime hours with an annual ceiling of 200 hours in most cases. Contractual consent from the employee does not override these limits. Employers who rely on broad overtime clauses without actively tracking hours against the statutory ceilings are in breach of the Labour Code, regardless of what the employment contract says.
Foreign employees must join Vietnamese statutory insurance schemes
Foreign workers in Vietnam are not exempt from local social security, health insurance, or unemployment insurance obligations. Employers must enroll foreign staff in Vietnamese statutory schemes and make the required contributions. Assuming that home-country coverage or a private international health plan satisfies this obligation is a common and costly error, as non-enrollment triggers back liability for both employer and employee contributions.
Probation is a formally regulated phase, not an informal arrangement
Vietnamese law requires probation to be documented either in a separate probation contract or as a clearly stated clause in the main labour contract, and probation periods cannot exceed 60 days for most roles. Informal or loosely worded probation arrangements can be ruled invalid, meaning the employee is treated as having full labour-law protections from the first day of work. Foreign employers who carry over flexible probation practices from other markets often discover this only when they try to end a relationship during what they thought was a trial period.
Your next step
45 EOR providers can employ for you in Vietnam. Compare them independently, or tell us about your hire and get a shortlist matched to your situation.
Common questions about hiring in Vietnam
What does it cost an employer to hire someone in Vietnam on top of gross salary?
How quickly can I get someone on payroll in Vietnam?
Is the thirteenth-month salary mandatory in Vietnam?
What are the annual leave and public holiday entitlements in Vietnam?
Do I need a special approval process before hiring a foreign worker in Vietnam?
What is the personal income tax top rate in Vietnam?
Can I hire someone in Vietnam as an independent contractor instead of an employee?
Can I use a PEO in Vietnam?
Not in the US sense of the word. A PEO (professional employer organization) is a co-employment model under US law and needs your own local entity; Vietnam has no equivalent. When a provider offers a "PEO in Vietnam", it is in practice an employer of record: the provider is the legal employer and you direct the work. That is the route this guide describes. EOR vs PEO explains where the two models differ.