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Vietnam Salary Calculations

QUICK GUIDE

(updated for salaries from 1 January 2020)

Process for Calculating Employer Costs, Net Payments to Employees, and Payments to the Authorities

EMPLOYER Costs & Calculations

Salary Cost Calculation for the Employer is:

Gross Salary for Employee

Plus:
Social Insurance* @ 17.5% Health Insurance* @ 3% Unemployment Insurance* @ 1%

Equals: Total Salary Cost to Employer

Notes:
(1) *These Insurances are subject to caps on amounts to be paid. See

reverse side for details
(2) From 1 December 2018, foreign employees are subject to Social

Insurance, with employers contributing 3.5%. This will increase to

17.5% effective from 1 January 2022
(3) Foreign employees are not subject to Unemployment Insurance (4) Certain one-off bonuses and specific allowances may be

excluded from insurance and/or tax calculations
(5) Overtime rates can apply ranging from 150% to 390%.

EMPLOYEE Costs & Calculations

GOVERNMENT Share

Salary Received by an Employee is Calculated as:

Gross Salary for Employee

Less:
Social Insurance* @ 8% Health Insurance* @ 1.5% Unemployment Insurance* @ 1%

Equals: Taxable Salary
Less: Personal Income Tax
Equals: Total Cash Received by the Employee

Personal Income Tax (“PIT”) is based upon the PIT scales shown on the reverse side. The Personal Allowance and any Dependent Allowances are deducted from the Taxable Salary before calculating the applicable PIT

Notes:
(1) *These Insurances are subject to caps on amounts to be paid. See

reverse side for details
(2) From 1 December 2018, foreign employees are subject to Social

Insurance, however employee contributions will only start from

January 2022 when the full 8% applies
(3) Foreign employees are not subject to Unemployment Insurance (4) Certain one-off bonuses and specific allowances may be

excluded from insurance and/or tax calculations.

Contributions and Payments to Government Authorities:

Amounts paid by the Employer and Employee:

Social Insurance of: 17.5% + 8% = 25.5% Health Insurance of: 3% + 1.5% = 4.5% Unemployment Insurance of: 1% + 1% = 2%

Plus:

Personal Income Tax deducted from Employee, and based upon relevant PIT scales

Total contribution/withholdings to the Government are remitted by the Employer for both Employer and Employee portions.

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Vietnam Salary Calculations

QUICK GUIDE

(updated for salaries from 1 January 2020)

Personal Income Tax (PIT)

PERSONAL INCOME TAX (PIT)

Personal Income Tax rates (Resident Taxpayers)

Tax Rate

Monthly Taxable Income (VND)

Maximum Tax in Bracket (Cumulative Tax including current Bracket) (VND)

5%

up to 5,000,000

250,000

10%

5,000,001 - 10,000,000

500,000 (750,000)

15%

10,000,001 - 18,000,000

1,200,000 (1,950,000)

20%

18,000,001 - 32,000,000

2,800,000 (4,750,000)

25%

32,000,001 - 52,000,000

5,000,000 (9,750,000)

30%

52,000,001 - 80,000,000

8,400,000 (18,150,000)

35%

80,000,001 and above

Taxable Income for each employee, prior to calculating PIT, is further reduced by:
- Personal Allowance of 9,000,000 VND per month,

and
- Dependent Allowance of an additional 3,600,000 VND per

month for each registered dependent.

Social Insurance

Social Insurance is levied on the Gross Salary of the Employee as follows:

Employer 17.5% Employee 8.0%

The maximum monthly salary that is subject to Social Insurance is capped at 29,800,000 VND (being 20 times the Minimum Basic Wage, which is currently 1,490,000 VND per month).

Note: from 1 July 2020 onwards, the Minimum Basic Wage will be 1,600,000 VND per month.

Unemployment Insurance

Unemployment Insurance is levied on the Gross Salary of the Employee as follows:

Employer 1.0% Employee 1.0%

The maximum monthly salary that is subject to Unemployment Insurance is capped at 20 times the Minimum Monthly Wage of the Zone the Employer is in. The Zone 1 minimum is 4,420,000 VND, which equates to a cap of 88,400,000 VND per month.

Minimum Wages

Zone

Minimum Monthly Wage (VND)

Zone 1

4,420,000

Zone 2

3,920,000

Zone 3

3,430,000

Zone 4

3,070,000

Zones are designated by the Government. For example, Zone 1 covers areas including urban areas of Hanoi, Ho Chi Minh City and Hai Phong, along with certain industrial areas of Binh Duong and Dong Nai.

Health Insurance

Health Insurance is levied on the Gross Salary of the Employee as follows:

Employer 3.0% Employee 1.5%

The maximum monthly salary that is subject to Health Insurance is capped at 29,800,000 VND (being 20 times the Minimum Basic Wage, which is currently 1,490,000 VND per month).

Note: from 1 July 2020 onwards, the Minimum Basic Wage will be 1,600,000 VND per month.

All information referred to is believed to be correct at the time of publication, but is subject to change without notice.
This document is for general information only, and should not be relied upon or substituted in place of specific professional advice.

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