Employee benefits and compensation are central to building a strong workforce in Vietnam. Salary, office environment, and job security are key factors that influence candidates’ choices, while job security, career growth, and training opportunities shape long-term loyalty. These priorities highlight the importance of a well-structured benefits policy for organizations.

Employers who communicate entitlements clearly and provide opportunities for growth create workplaces where employees feel valued and motivated. The Vietnam Labour Code sets clear standards for employee benefits, ensuring welfare and fairness across industries. This blog explores the compensation and benefits landscape in Vietnam, offering actionable insights on statutory requirements, competitive strategies, and practical steps to meet the evolving expectations of the workforce.

What are Employee Benefits in Vietnam?

Employee benefits in Vietnam are the entitlements and support that employers provide alongside salary, as required by the Vietnam Labour Code and agreed upon in the employment contract. These include statutory benefits such as severance allowance, paid annual leave, mandatory social and health insurance, and maternity/paternity leave.

Employers also commonly offer additional benefits like housing and transport allowances, bonuses, annual flight tickets, and wellness programs to meet workforce needs and support retention. For both Vietnamese nationals and expatriates, these benefits form a key part of the overall employment package and play a major role in job satisfaction and long‑term engagement.

Labor Laws Covering Compensation in Vietnam

Compensation in Vietnam is governed by the Vietnam Labour Code (Law No. 45/2019/QH14) and its guiding decrees, along with related ministerial circulars from the Ministry of Labour, Invalids and Social Affairs (MoLISA).

• This law defines the rights and obligations of employers and employees in the private sector, including rules on wages, payment, working hours, leave, termination, and severance entitlements.
• The Vietnam Labour Code applies to most private‑sector employees, both Vietnamese citizens and expatriates, working under definite or indefinite-term contracts.
• It does not cover specific state officials and civil servants, members of the armed forces, police, and security personnel who are governed by separate regulations.
• Employees working in specialized Export Processing Zones (EPZs) or High-Tech Parks may have specific administrative processes, though they are still protected by the federal Labour Code.
• Employers must pay salaries at least once a month, ensuring timely and full payment via cash or approved banks, with the employer bearing any bank transfer fees.
• Beyond employment contracts, the law protects employees from unjust termination and sets minimum standards for wages, compensation, and benefits.
• It outlines how salaries must be structured, when and how they must be paid, and what entitlements employees have for overtime, leave, and severance pay.

Mandatory Employee Benefits in Vietnam

In Vietnam, employers must provide specific benefits by law. These statutory benefits apply to most private‑sector employees and form the legal foundation of any employment package. Each benefit is defined under the Vietnam Labour Code and related regulations, and employers are required to deliver them as part of the employment contract.

End‑of‑Service Gratuity

End‑of‑service gratuity, known locally as a severance allowance, is a statutory entitlement for employees in Vietnam, payable when employment ends under qualifying conditions. The amount is calculated based on the employee’s basic salary and length of service for periods not covered by unemployment insurance. Employees receive half a month’s wage for each qualifying year of service, provided they have worked for the employer for at least 12 regular months.

Annual Leave

Employees in Vietnam are entitled to paid annual leave as per the Vietnam Labour Code. The minimum number of days is 12 for standard working conditions, increasing by one day for every five years of service. Leave must be taken within the calendar year. Employers must pay full wages during annual leave. Unused leave can be carried forward to the next year or compensated financially, depending on company policy and mutual agreement.

Sick Leave

Sick leave is a statutory entitlement that allows employees to take paid time off for illness or injury. The law defines the total number of sick days (typically 30 to 60 days depending on working conditions), and the pay is covered by the Social Insurance fund at 75% of the insured salary. Employers must accept valid medical certificates and follow the legal framework when reporting to the insurance fund, ensuring employees are not unfairly penalized.

Public Holidays

Employees are entitled to paid time off on 11 official public holidays declared by the Vietnamese government, including the Lunar New Year (Tet). If an employee is required to work on a public holiday, they must receive additional compensation of at least 300% of their standard wage. Employers must clearly communicate the holiday schedule and ensure employees receive their entitlements without delay.

Maternity Leave

Maternity leave is a statutory right for female employees in Vietnam. The law grants 6 months of paid leave, with the Social Insurance fund covering 100% of the employee’s average insured salary. Employers must grant maternity leave as required and cannot terminate or demote an employee for taking it. This benefit supports employee well‑being and ensures compliance with Vietnamese labour regulations.

Paternity Leave

Paternity leave is a statutory entitlement that allows male employees paying social insurance to take paid time off around the birth of a child. The law defines the number of days (ranging from 5 to 14 days depending on the type of birth). Employers must facilitate this leave as required, supporting work‑life balance and family responsibilities.

Health Insurance

Across Vietnam, employers are legally required to provide and contribute to state health insurance coverage for all contracted employees. The contribution is a set percentage of the employee’s salary, paid into the national fund. Employers are responsible for arranging the registration, and employees must be covered for the duration of their employment to access the public healthcare system.

Working Hours and Overtime

The Vietnam Labour Code sets standard working hours at a maximum of 48 hours per week, and defines when overtime applies. Employees who work beyond normal hours are entitled to additional pay ranging from 150% to 300% depending on the day. Employers must track working hours accurately and ensure overtime is compensated correctly, maintaining compliance and avoiding disputes.

Rest Periods and Weekly Holidays

Employees are entitled to daily rest periods (at least 30 to 45 minutes) and a weekly holiday (usually Sunday, offering at least 24 consecutive hours of rest). Employers must ensure that employees get adequate rest and are given their weekly day off. If an employee is required to work on the weekly holiday, they must be paid additional compensation as per the law.

Non-Mandatory Benefits: What Employers Offer

In addition to statutory benefits, many employers in Vietnam offer non‑mandatory benefits to attract and retain talent. These benefits are not required by law but are commonly included in employment packages, especially in competitive industries and larger organizations. They help improve job satisfaction, support employees’ personal and financial needs, and make a company more attractive to skilled professionals.

Housing Allowance

A common non‑mandatory benefit where the employer provides a fixed monthly amount to help cover rent. The amount varies by role, seniority, and company policy, and is usually paid in addition to the basic salary. It is particularly valuable for expatriate employees and those working in high‑cost cities like Hanoi and Ho Chi Minh City.

Transport Allowance

A transport allowance helps employees cover commuting costs. It can be a fixed monthly amount or provided through company transport, depending on the employer’s policy and the employee’s role. This benefit is especially useful for employees who travel long distances or work in locations with limited public transport or high traffic congestion.

Meal and Food Allowance

Supports daily living costs and is often provided as a fixed monthly amount, meal vouchers, or access to a company cafeteria. This benefit is common in manufacturing roles, on‑site positions, and companies that operate across multiple locations. For employees working long hours, a mid-shift meal allowance (which can be tax-exempt up to a statutory limit) ensures they can afford proper nutrition without added financial stress.

Education Allowance

Helps employees cover school or university fees for their children. The amount and conditions depend on the employer’s policy and the employee’s level. This benefit is especially valued by expatriate employees and is common in multinational companies. In Vietnam, where international school fees can be very high, an education allowance is a strong retention tool and a key differentiator in job offers.

Annual Flight Tickets

A standard benefit for expatriate employees allowing them to travel home once a year. Employers usually cover economy‑class tickets for the employee and sometimes for immediate family members. This benefit supports work‑life balance and is a key consideration for many expatriates. In competitive markets, some employers offer business‑class tickets or additional trips for senior roles to strengthen their employer brand.

Performance Bonuses

Widely used to reward individual and company performance. These are typically a percentage of salary or an extra month’s pay (such as the 13th-month salary given before Tet) and are paid once or twice a year, depending on company policy. They help align employee goals with business results and improve motivation. Clear, transparent bonus structures also build trust and make it easier for employees to understand how their performance impacts their total compensation.

Wellness and Lifestyle Benefits

Wellness and lifestyle benefits are becoming more common, including premium private health insurance, gym memberships, health check‑ups, and flexible work arrangements. These benefits support employee well‑being, reduce stress, and improve work‑life balance, which in turn boosts productivity and retention.

Employee Benefits for Expatriates in Vietnam

Expatriate employees in Vietnam are entitled to the same core protections as all private-sector workers under the Labour Code 2019, including paid leave, rest days, and mandatory health insurance contributions.

In addition to statutory entitlements, most employers offer a wider benefits package to attract and retain foreign talent. These packages typically include:

• Housing or accommodation allowances to offset high rental costs in central districts of Hanoi and Ho Chi Minh City.
• Annual airfare for the employee and eligible family members for home-country travel.
• Education allowances to cover part or full international school fees for children, which can be provided tax-free if paid directly to the school.
• Transport allowances or company-provided vehicles with drivers.
• Relocation and visa support, including work permit processing and temporary housing on arrival.

Expatriates are subject to specific social insurance contributions depending on their contract type. Their total compensation often includes 30–50% of value in allowances, reflecting the additional costs of living and relocation overseas.

Golden Visa and Long-Term Incentives

Vietnam’s equivalent to a Golden Visa comes in the form of Investor Visas (DT1, DT2, DT3) and long-term Temporary Residence Cards (TRCs). These are up to 3 to 10-year renewable residence permits that allow foreign nationals to live and work in Vietnam. The program targets large-scale investors, entrepreneurs, and highly specialized professionals, offering long-term stability that traditional short-term work visas cannot provide.

TRC and Investor Visa holders gain extended residency rights, meaning they can navigate the business landscape with much greater ease. The long-term visa provides several key advantages:

• Family sponsorship, allowing spouses and children to reside in Vietnam for the same duration.
• Exemption from renewing standard work visas every single year.
• Ability to establish and manage local businesses more seamlessly.
• Full access to local banking, property leasing, and financial services.
• Simplified entry and exit without the need for repetitive visa applications.
• Long-term stability that facilitates buying certain types of property under foreign ownership quotas.
• Greater integration into the local economy and professional networks.

For employers, offering assistance in securing long-term TRCs as part of an executive benefits package significantly strengthens retention and positions the organization as committed to long-term employee investment.

How to Qualify for Employee Benefits in Vietnam?

To receive statutory benefits in Vietnam, an individual must be formally employed under the Vietnam Labour Code and meet specific conditions related to contract type, service duration, and compliance with employment rules. Eligibility is not automatic; it depends on how the employment relationship is structured and maintained.

• Valid Employment Contract: An employee must be hired under a written employment contract registered appropriately for social insurance. The contract must clearly state the job role, basic salary, allowances, working hours, and place of work. Only employees with a valid contract are entitled to statutory benefits like severance, leave, and state insurance.
• Private‑Sector Employment: Statutory benefits under the general Labour Code apply to employees working in the private sector. Government employees, armed forces, police, and security personnel are covered under separate state regulations with different frameworks.
• Minimum Service Period: Most statutory benefits require a minimum length of continuous service. For example, severance allowance is only payable after completing 12 months of employment. Annual leave entitlements scale with service duration, so shorter tenures result in pro-rated days.
• Attendance and Conduct Rules: To remain eligible for certain internal benefits, employees must follow company attendance policies and maintain acceptable conduct. Serious misconduct can lead to disciplinary dismissal, which heavily impacts eligibility for severance and internal bonuses.
• Proper Documentation and Records: Employees must hold valid identification, and foreigners must hold a valid Work Permit and TRC to prove their legal employment status. Employers are required to maintain accurate records of attendance, leave, and salary payments, which are used to verify eligibility when benefits are claimed.

How to Calculate Employee Benefits Cost in Vietnam?

Under the Vietnam Labour Code, benefit calculations are based on defined percentages and salary components set by regulation. Employers must calculate statutory entitlements precisely to remain compliant. For local employees, employers must contribute 21.5% of the employee’s insured salary to the national funds (17.5% Social Insurance, 3% Health Insurance, 1% Unemployment Insurance), while employees contribute 10.5%.

Expatriates also participate in the mandatory insurance schemes at varying rates depending on their exact visa and contract status. When determining any additional or non‑statutory fringe benefits, such as housing, education, or travel allowances, companies rely on market benchmarks and industry averages to ensure competitiveness. Accurate benefit calculations and clear documentation help employers stay compliant and provide fair, transparent compensation packages.

Tax Treatment of Benefits in Vietnam

Vietnam operates a progressive Personal Income Tax (PIT) system, meaning employees are taxed on salaries, wages, bonuses, and most allowances based on income brackets ranging from 5% to 35%.

• Both Vietnamese nationals and expatriates must pay PIT on their worldwide or Vietnam-sourced income depending on their tax residency status.
• Employers are responsible for deducting the employee’s portion of social insurance and PIT before paying the net salary.
• While most benefits are taxable, certain allowances are tax-exempt if structured correctly, such as mid-shift meal allowances (up to a statutory cap), uniform allowances, and specific one-off relocation allowances for expats.
• Education allowances for expatriates’ children are tax-free only if the employer pays the tuition directly to the school.
• Benefits-in-kind such as company-provided accommodation are taxable, but the taxable housing benefit is capped at 15% of the employee’s total taxable gross income (excluding the rent).
• Because of the progressive tax system, employers often negotiate salaries on a “Net” basis, meaning the employer must accurately gross up the payroll calculations to cover the tax burden.

Designing a Competitive Benefits Program: Steps for Employers

Creating a benefits program that attracts and retains talent in Vietnam requires structured planning beyond statutory compliance. Follow these steps to build a package that meets workforce expectations while fitting your organization’s budget and business goals.

Step 1: Conduct a Workforce Needs Assessment

Survey current employees to identify which benefits matter most to them. Expatriate families value education allowances and annual flight tickets, while local younger professionals may prefer premium health insurance, training programs, and flexible work arrangements. Use anonymous feedback to gather honest input about gaps in your current offering and what would improve job satisfaction.

Step 2: Benchmark Against Industry Standards

Review what competitors in your sector and region are offering. Check salary surveys, industry reports, and job postings to understand the market rate for benefits like housing allowances, 13th-month bonuses, and private healthcare levels. This prevents your package from falling below market expectations and helps you identify areas where you can stand out.

Step 3: Calculate Total Benefits Cost

Establish your total compensation budget by calculating the full cost of each benefit per employee. Include direct costs like private insurance premiums and housing allowances, plus indirect costs such as employer social insurance contributions and PIT gross-up calculations. This gives you a clear view of what you can afford and helps you allocate resources effectively across different benefit categories.

Step 4: Prioritize Based on Budget and Impact

Not all benefits deliver equal return on investment. Rank potential benefits by cost versus their impact on recruitment and retention. Mandatory social insurance and annual leave are non-negotiable, but additional benefits like wellness programs or a guaranteed 13th-month bonus may deliver higher employee satisfaction per dong spent than across-the-board salary increases.

Step 5: Structure Benefits by Employee Level

Design tiered benefit packages that reflect seniority and role requirements. Entry-level positions might receive basic statutory benefits plus meal and transport allowances, while senior roles include housing allowances, education support for children, high-tier performance bonuses, and private family healthcare. Clear tier structures help employees understand their progression path and what they can expect as they advance.

Step 6: Draft Clear Benefits Policies

Document every benefit in written policies that specify eligibility criteria, claim procedures, payment schedules, and conditions. Include details on probation periods, pro-rata calculations for new joiners, and how benefits are handled during notice periods or termination. Clear policies prevent disputes and ensure consistent application across your organization.

Step 7: Communicate Benefits Effectively

Create a benefits guide that explains every entitlement in plain language and distribute it during onboarding. Use multiple formats, written handbooks, digital portals, and one-on-one HR sessions, to ensure employees understand their full package. Employees who don’t understand their benefits can’t appreciate their value, reducing the impact of your investment.

Step 8: Review and Update Annually

Schedule an annual benefits review to assess utilization rates, employee feedback, and changing market conditions. Remove benefits with low uptake, add new offerings that address emerging needs, and adjust allowance amounts to keep pace with inflation, tax changes, and cost-of-living adjustments in major Vietnamese cities.

Case Studies: Leading Vietnam Companies’ Benefit Packages

Leading employers in Vietnam design their benefits to attract and retain skilled employees while meeting Labour Code requirements. The following case studies show how top companies balance compliance with competitive advantages that improve employee loyalty and satisfaction.

Vingroup

Vingroup offers one of the strongest employee benefits packages in Vietnam, providing lifestyle and family support that meets the needs of its diverse workforce:

• Premium medical insurance for employees through Vinmec, with extended options for dependents.
• Annual performance bonuses and traditional Tet (13th-month) bonuses.
• Generous discounts on internal ecosystem products (VinFast vehicles, Vinhomes properties, Vinpearl resorts).
• Education support and subsidies for employees’ children attending Vinschool.
• Allowances for transport and daily meals provided on-site.
• Annual leave entitlement that strongly rewards loyalty and years of service. These benefits help employees manage major costs such as schooling, housing, and healthcare, improving retention and satisfaction among their staff.

Petrovietnam (PVN)

PVN’s benefits plan focuses on financial security and career growth for its large technical and engineering workforce:

• Highly competitive base salaries combined with substantial hazard and remote-working allowances.
• Housing provisions or allowances for staff working at remote refineries or offshore sites.
• Comprehensive state and supplemental private health insurance.
• Transport allowances and company buses for technical staff commuting to industrial zones.
• Annual performance bonuses and profit-sharing models. PVN’s focus on structural allowances, robust insurance, and bonuses supports employee retention in technical and leadership roles, helping secure long-term workforce stability.

FPT Corporation

FPT offers benefits that reward results and support the dynamic needs of tech-industry employees:

• Comprehensive health insurance for employees (FPT Care), with scalable coverage for dependents.
• Clear performance bonuses and stock option programs for senior developers and management.
• Allowances covering internet, device upgrades, and continuous technical certifications.
• Extended parental support and family-friendly event days.
• Flexible work options, including remote hybrid work and modern campus facilities featuring gyms and cafeterias. FPT’s policies support both high technical performance and work-life integration, making it one of Vietnam’s most employee-focused technology employers.

How HRBS Global Can Help With Employee Benefits in Vietnam?

HRBS Global helps companies create employee benefit programs that meet workforce expectations, reduce turnover, and simplify HR management across Vietnam. Here’s how we support your organization:

• Complete Benefits Management: We design, implement, and manage benefits, from salary structures and allowances to 13th-month bonuses and private healthcare, so your teams feel supported and valued.
• Employer of Record Solutions: Through our EOR platform, we handle employee onboarding, payroll, PIT calculations, and benefits administration for businesses without a legal entity in Vietnam. You can hire, pay, and manage teams legally and efficiently.
• Expatriate and Local Benefits: We build benefit plans that suit both Vietnamese nationals and expatriates, including support for housing, TRC processing, education, and relocation. Each plan is adapted to your workforce needs and industry standards.
• Health Insurance and Well‑Being: We partner with trusted local and international providers to secure health coverage and wellness programs that improve employee satisfaction while keeping costs under control.
• Continuous Program Enhancement: We review benefit usage and benchmark data regularly to ensure your offering remains competitive and meaningful in a fast‑changing market.

Partnering with HRBS Global means your business delivers clear, attractive, and compliant benefits that genuinely motivate employees, helping you build a stronger, more engaged workforce across Vietnam.

FAQs

What are the mandatory employee benefits in Vietnam? 

Employers in Vietnam must provide severance allowance, paid annual leave, sick leave (via Social Insurance), maternity and paternity leave, 11 public holidays, and mandatory contributions to state Social, Health, and Unemployment Insurance. These core benefits apply to all private‑sector workers under valid contracts and are a minimum requirement for lawful employment.

Are expatriate employees entitled to the same benefits as Vietnamese nationals? 

Yes. Expatriate employees receive the same statutory protections (like leave and rest days) and participate in mandatory insurance schemes. However, to attract and retain international talent, many employers add housing allowances, education support for children, and annual flight tickets to their packages to offset relocation and living expenses in cities like Hanoi or Ho Chi Minh City.

Can employers replace annual leave with cash payment in Vietnam? 

Unlike some regions, Vietnam allows employers to convert unused annual leave into a cash payment if the employee cannot take the leave due to work requirements or termination. This is typically calculated using the employee’s standard salary rate and can be paid out at the end of the year or when employment ends.

Are remote employees working from outside Vietnam entitled to local benefits? 

Employees working fully outside Vietnam are generally not covered by the Vietnam Labour Code. Their benefits depend on the governing jurisdiction of their employment contract and the regulations of the country where they perform their duties. However, Vietnam‑based companies may still choose to extend partial standard benefits to maintain fairness.

How often should payroll and benefits be reviewed in Vietnam? 

Employers should assess payroll and benefits annually—especially before the Tet holiday—or after major changes to the statutory minimum wage to remain compliant and competitive. Reviews should cover allowances, healthcare plans, and PIT structures in line with inflation trends, workforce needs, and evolving industry benchmarks in the Vietnamese job market.

What additional benefits help employers attract top talent in Vietnam?

Beyond legal entitlements, offering long‑term incentives such as guaranteed 13th-month bonuses, TRC sponsorship for expats, premium private family healthcare (like Bao Viet or similar), and wellness programs can significantly boost an employer’s appeal. Flexible work arrangements and clear career progression paths also enhance retention and strengthen employer branding across the region.