Posted 10.02. 2021 by Cekindo
Payroll is a complicated matter in Vietnam because there are many factors to consider: tax, insurance, and benefits. Moreover, there are differences between foreign employees and local employees regarding social security, trade union fee, and personal income tax percentages.
1. Social security
For Vietnamese employees
For foreign employees
2. Trade union
3. Personal income tax
In Vietnam, there are three kinds of insurance that are compulsory for Vietnam’s employees. They are social insurance, health insurance, and unemployment insurance. Since foreign employees are only eligible for health insurance out of the three types of insurance, foreign staff’s employment taxes are lower than those of local workers.
However, Vietnam’s Social Insurance Law that has been in force since 2016, specifies that companies can also pay for social insurance for their foreign staff starting from the beginning of 2018. Payments for foreign employee’s social insurance became mandatory from December 1st, 2018, allowing foreigners to enjoy the same benefits as local employees in Vietnam.
The rates of social insurance payment applicable to foreign employees and their employers are as below:
Other than social insurance, under the latest decree, foreign employees are eligible for compensations for their maternity leave, sick leave, occupational diseases, retirement, accidents, and death, as well as one-time pension payment upon exiting Vietnam.
Nonetheless, compulsory social insurance is only applicable to foreign employees in Vietnam when they meet the following conditions:
Foreign staff is not eligible for mandatory social insurance in the following situations:
Standard minimum wage and regional minimum wage are the two types of minimum wage in Vietnam.
It is a law that employers must grant paid leaves to their employees in Vietnam. Paid leaves in Vietnam include maternity and paternity leaves, sick leave, annual leaves, and public holidays.
Other additional off days that employees take for themselves are considered unpaid.
Here at Cekindo, our clients believe in our experts so much that they use our services long-term to help them achieve a cost-effective managed payroll in Vietnam. Our highly-experienced Vietnam payroll team will take the burden off your employees and your business without compromising on accuracy, compliance, and efficiency.
Cekindo takes the complexity out of Vietnam’s payroll and tax compliance. Our practical and up-to-date approaches align with the Vietnamese authorities’ latest revisions, reducing the possibilities of non-compliance and legal complications.
Our solutions are tailored to fit your unique business needs and give you peace of mind when you know that your payroll in Vietnam is processed timely and accurately.
Learn more about Cekindo’s payroll outsourcing solution now. Complete the form below.