Posted 9.11. 2020 by Cekindo
Accurate payroll calculation in Vietnam is extremely crucial as it connects to your business’ accounting system that will affect your employee’s pay and tax outcome. A precise payroll is also related to eliminating unethical issues, ensuring consistency, cutting down costs and resources, enhancing organisational performance, and most importantly complying with Vietnamese payroll and tax legislations.
Before going further into payroll options in Vietnam, it is important to know that other than basic wage and salary for Vietnam payroll calculation, there are other elements to consider:
As per the Vietnamese Law, employees in Vietnam are entitled to three kinds of insurances: social security insurance (18% from employers; 8% from employees), health insurance (3% from employers; 1.5% from employees), and unemployment insurance (1% from employers; 1% from employees).
It is also possible that organisations provide additional benefits such as supplementary life and health insurance to their employees. For companies on a smaller scale, they don’t usually provide supplementary health insurance but an allowance instead. Other extra benefits include vacation time and an annual trip.
Bonuses and Leave
Bonuses provision is common practice for almost all companies in Vietnam due to the tradition of the Lunar Holiday. The 13-month bonus provided by employers is not required by law but most organizations have it. If they don’t, they will at least have a commission-plan for their employees. 13-month bonuses are calculated based on an employee’s service duration in the company.
Other than the nine public holidays, there are three major types of leave in Vietnam: maternity and paternity leave, sick leave, and annual leave.
The female staff is eligible for 6-month maternity leave with full salary for a newborn and an extra 30 days for each additional child. Male employees are also qualified for 5 to 14-day paternity leave with full wage. Sick leave ranges 30-60 days depending on the employment length; and each employee will have at least 12-day annual leave.
For foreigners interested in starting businesses in Vietnam, there are four payroll options they can consider to deal with their Vietnam payroll calculation and compliance:
This option is ideal for large organisations in Vietnam that have a long-term vision. Internal payroll requires higher expenses to hire more full-time employees.
A parent company overseas will carry out the remote payroll for your company in Vietnam. One thing to keep in mind that the payroll regulations differ in the parent company’s country and Vietnam – something that your HR professional must take notice of.
Vietnam payroll process company
Many foreign companies work with payroll process companies in Vietnam. The requirement is that you need to establish an entity in the country and must comply with all Vietnamese payroll legislations.
Cekindo’s payroll outsourcing services
Cekindo will take care of all your payroll functions and employment liabilities. We make sure that your payroll and HR activities are in full compliance to eliminate legal risks.
Cekindo offers payroll outsourcing services to help you with Vietnam payroll calculation and processing, human resources support and policies, and benefits and compensation administration. Our solutions can relieve your team and business from time-consuming and complex tasks.
Outsourcing your payroll and human resources tasks can not only help your business reduce human resources costs, but it also decreases administrative burden significantly, as well as managing staff-related risks.
Cekindo’s professional team makes sure that all your business information and data are kept strictly confidential while improving your organisational effectiveness.
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