Foreign employers that want to attract and retain the best talent need to ensure they understand payroll in Vietnam and coordinate salary structures with HR management. Here, Vietnam Briefing explains the payroll basics and some best practices for employers in the country.
In recent years, foreign direct investment (FDI) flows into Vietnam have been on the rise as greater numbers of foreign companies decide to establish businesses in the country. Employers, however, need to develop a good understanding how human resources work in the country. For many, salary structures are usually a beginning point, particularly as it rationalizes wages and motivates staff.
Compensation
For Vietnamese employees that work in foreign companies in Vietnam, compensation is determined through negotiations between the two parties. However, the compensation should be no lower than the minimum monthly salary rates as stipulated by the government.
The monthly minimum wage rates in Vietnam, updated in January 2019, are as immediately below.
The above minimum wage rates are only for Vietnamese employees that conduct the most basic work in normal working conditions. Employees who have passed vocational training courses (i.e., company training courses) typically have wage rates that are at least seven percent higher than those mentioned above.
Employees who work extra hours are also paid for those extra hours based on their current hourly wages, as immediately below.
In cases where an employee works extra hours at night, they are paid extra in accordance to the applicable regulations. Furthermore, employees who are given time off in compensation for working extra hours will need to be paid the difference between their wages during normal working hours and overtime work. Finally, employees who work night shifts should be paid at least 30 percent higher than normal.
Salaries paid to Vietnamese staff working for foreign companies must be denominated in Vietnamese Dong. Foreign employers may base salary rates in either Vietnamese Dong or US Dollars, but salaries that are based in US Dollars must be converted into Vietnamese Dong.