How does Vietnam payroll tax work in 2026?
Vietnam employers pay 21.5% in mandatory social contributions on top of every salary. That is the combined rate for social insurance, health insurance, and unemployment insurance. It lands before you see the personal income tax stack, which runs five bands up to 35%.
· Vietnam guide
Illustration · Hanoi, Vietnam
Vietnam employers pay 21.5% in total social contributions. This covers social insurance, health insurance, and unemployment insurance.
Employees pay 10.5% in matching contributions. Both rates apply on salaries up to the contribution ceiling.
Personal income tax has five bands. The lowest rate is 5% on annual income up to VND 120,000,000. The top rate is 35% above VND 1,200,000,000.
Employers withhold and file PIT monthly. The payment deadline is the 20th of the following month.
What does an employer pay in Vietnam social contributions?
Employers pay 21.5% on each employee's salary. This covers social insurance at 17.5%, health insurance at 3%, and unemployment insurance at 1%.
Both rates apply on salary up to the contribution ceiling. The ceiling is 20 times the government base salary. The base salary rises from VND 2,340,000 per month to VND 2,530,000 per month from 1 July 2026, so the ceiling rises too.
| Contribution type | Employer rate | Employee rate |
|---|---|---|
| Social insurance (retirement, sickness, maternity) | 17.5% | 8% |
| Health insurance | 3% | 1.5% |
| Unemployment insurance | 1% | 1% |
| Total | 21.5% | 10.5% |
The contribution ceiling
Social insurance and health insurance contributions are capped at 20 times the government base salary per month. Until 30 June 2026 the base salary is VND 2,340,000, giving a ceiling of VND 46,800,000 per month. From 1 July 2026 the base rises to VND 2,530,000 under Decree 161/2026/ND-CP, pushing the ceiling to VND 50,600,000 per month. Earnings above that ceiling are not subject to social contribution. The unemployment insurance ceiling is separate and set at 20 times the regional minimum wage.
Vietnam Trade Union contribution
Employers with trade union members also pay a union fee of 2% of the payroll fund. This sits outside the social insurance system but forms part of the total employer payroll cost picture.
What does an employee pay in Vietnam social contributions?
Employees pay 10.5% in total social contributions. Social insurance takes 8%, health insurance 1.5%, and unemployment insurance 1%.
Contributions are deducted from the gross salary each month. They apply on the same capped base as the employer side.
| Contribution type | Employee rate | What it funds |
|---|---|---|
| Social insurance | 8% | Retirement pension, sickness, maternity benefits |
| Health insurance | 1.5% | State healthcare coverage |
| Unemployment insurance | 1% | Job-loss benefit fund |
| Total employee deduction | 10.5% |
The social insurance contribution forms part of the employee's pension entitlement. An employee needs 20 years of SI contributions to qualify for a full pension on retirement. The retirement age is 60 for women and 62 for men, rising gradually to equalise at 62.
Foreign employees working in Vietnam on contracts of one year or more are also required to participate in social insurance. This was introduced from 1 December 2018 and still applies in 2026. The same contribution rates apply to foreign nationals as to Vietnamese employees.
Vietnam personal income tax bands for 2026
Vietnam personal income tax uses five progressive bands. The bottom band is 5% on annual income up to VND 120,000,000. The top band is 35% on income above VND 1,200,000,000.
Tax residents get a personal deduction of VND 186,000,000 per year. This is VND 15,500,000 per month. The five-band schedule took effect from 1 January 2026 under the amended Personal Income Tax Law.
| Annual taxable income (VND) | Monthly equivalent (VND) | PIT rate |
|---|---|---|
| VND 0 to VND 120,000,000 | 0 to 10,000,000 | 5% |
| VND 120,000,000 to VND 360,000,000 | 10,000,001 to 30,000,000 | 10% |
| VND 360,000,000 to VND 720,000,000 | 30,000,001 to 60,000,000 | 20% |
| VND 720,000,000 to VND 1,200,000,000 | 60,000,001 to 100,000,000 | 30% |
| Above VND 1,200,000,000 | Above 100,000,000 | 35% |
Personal deductions
Tax resident individuals receive a personal deduction of VND 186,000,000 per year (VND 15,500,000 per month). This is deducted from gross income before applying the band rates. An additional dependent deduction of VND 4,400,000 per month applies for each qualifying dependent. Social insurance contributions paid by the employee are also fully deductible from gross income before PIT calculation.
Non-residents
Non-tax-resident individuals pay a flat rate of 20% on all Vietnam-sourced income. No personal deductions apply. Residency means spending 183 days or more in Vietnam in a calendar year, or having a registered habitual residence there.
The five-band progressive PIT schedule for tax residents applies to employment income in Vietnam from 1 January 2026. The top rate of 35% applies to annual taxable income above VND 1,200,000,000. Employers withhold PIT monthly and must remit by the 20th of the following month.
Source: PwC Tax Summaries: Vietnam Individual Taxes on Personal Income
How does Vietnam payroll withholding and filing work?
Employers withhold personal income tax from each salary payment. The withheld amount is declared and remitted by the 20 days of the following month.
Payroll runs on a monthly cycle. Annual settlement takes place after the calendar year ends. Employees with income from one source can authorise the employer to settle on their behalf.
The Vietnam payroll filing calendar for employers:
- Monthly PIT declaration and payment: due by the 20 days of the month following each pay period
- Monthly social insurance declaration: submitted by the last day of the month for that month's contributions
- Annual PIT finalisation: employers file the annual return by 31 March following the tax year-end and issue individual settlement certificates to employees
Quarterly filing is permitted for smaller employers who meet the revenue threshold set by the tax authority. Quarterly filers must pay PIT by the last day of the month following the quarter. Most employers with multiple employees default to monthly filing.
Social insurance registration and monthly reporting
New employees must be registered with the social insurance authority within 30 days of starting work. Changes to salary that affect the contribution base must be reported by the end of the month in which the change occurs. Contributions are remitted monthly to the Vietnam Social Security authority (VSSA).
What happens if you file late
Late PIT payment attracts daily interest at the prescribed rate. Social insurance arrears carry their own penalty. Repeat non-compliance can result in trading licence suspension. The risk profile for late filing is higher than in many comparable markets because enforcement at the local tax office level is active.
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Collect salary and pay data
Gather gross salary, any allowances, bonuses, and expense reimbursements for the pay period. Confirm which elements form part of the social insurance contribution base.
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Calculate gross social insurance base
Apply the contribution ceiling check. Only the portion of salary up to 20 times the government base salary is subject to social insurance and health insurance contributions.
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Deduct employee social contributions
Withhold 10.5% from the employee's contributable salary. Record the breakdown across social insurance, health insurance, and unemployment insurance.
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Calculate employer social contributions
Add 21.5% as the employer-side cost on the same contribution base. This is separate from and in addition to the gross salary.
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Withhold personal income tax
Apply the progressive PIT bands to taxable income after deducting the personal allowance and the employee's own social contributions. Withhold the resulting amount from net pay.
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Remit and file by the 20th
Pay withheld PIT to the tax authority and pay social contributions to VSSA by the required deadlines. File the monthly PIT declaration by the 20 days of the following month.
Pension and social benefit contributions in the payroll stack
Vietnam does not have a separate mandatory private pension. The retirement pillar sits inside the social insurance system. The employer pays 17.5% for social insurance, which funds pensions, sickness, and maternity benefits.
The employee contributes 8% to social insurance. After 20 years of contributions, the employee qualifies for a full pension on retirement.
The social insurance fund in Vietnam covers five benefits:
- Retirement pension: funded by the combined SI contribution; full pension after 20 years of contributions
- Sickness benefit: paid from the SI fund at 75% of the SI contribution base for short-term illness, subject to contribution history tiers (30, 40, or 60 maximum days per year)
- Maternity benefit: paid at 100% of the average SI contribution base for the duration of maternity leave (six months for mothers)
- Work-injury benefit: compensated from the SI fund where contributions have been made
- Death benefit: a lump sum paid to surviving dependants
Contribution ceiling transition in 2026
The social insurance contribution ceiling is 20 times the base salary set by the government each year. Vietnam's base salary rises from 1 July 2026 under Decree 161/2026/ND-CP, lifting the contribution ceiling from VND 46,800,000 to VND 50,600,000 per month. Employers need to update payroll calculations from July payroll. Salaries above the ceiling are not subject to social insurance contributions on the excess.
Minimum wage as a payroll floor
Payroll must clear the regional minimum wage floor. In 2026 the Region 1 minimum (Hanoi, Ho Chi Minh City, Hai Phong, Da Nang) is VND 5,310,000/month. Region 2 is VND 4,730,000/month. Region 3 is VND 4,140,000/month. Region 4 is VND 3,700,000/month. Most international hires land well above the floor, but it sets the base for social insurance calculation on lower-paid positions.
How does Teamed handle Vietnam payroll for you?
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Vietnam payroll, PIT withholding, social insurance filings, and annual settlement all run on one platform.
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Key sources: PwC Tax Summaries Vietnam, Vietnam Labour Code 2019, and Acclime Vietnam HR and Payroll Guide.
Frequently asked questions
What is the employer social contribution rate in Vietnam in 2026?
Employers pay 21.5% in total mandatory contributions. This breaks down as 17.5% for social insurance, 3% for health insurance, and 1% for unemployment insurance. The rates apply on salary up to the contribution ceiling, which rises mid-year from 1 July 2026 as the government base salary increases.
What social contributions does a Vietnam employee pay?
Employees pay 10.5% in total. The breakdown is 8% for social insurance, 1.5% for health insurance, and 1% for unemployment insurance. These are deducted from gross salary each month. The employee's social insurance contribution is also deductible from gross income before personal income tax is calculated.
What are the Vietnam personal income tax bands in 2026?
Vietnam uses a five-band progressive schedule for tax residents. Band 1: 5% on annual income up to VND 120,000,000. Band 2: 10% up to VND 360,000,000. Band 3: 20% up to VND 720,000,000. Band 4: 30% up to VND 1,200,000,000. Band 5: 35% above VND 1,200,000,000. Tax residents also receive a personal deduction of VND 186,000,000 per year before bands apply.
When must Vietnam employers file and pay payroll taxes?
Employers must declare and pay withheld personal income tax by the 20 days of the month following each pay period. Social insurance contributions are due by the last day of the same month. Annual PIT finalisation is due by 31 March following the tax year-end. Late payment attracts daily interest charges.
Does Vietnam have a separate mandatory pension scheme?
Vietnam does not have a separate mandatory private pension. The retirement pillar sits inside the social insurance system. Employers contribute 17.5% and employees contribute 8% to social insurance, which funds the state pension alongside sickness and maternity benefits. A full pension requires 20 years of qualifying contributions.
The number that surprises most people hiring in Vietnam is not the PIT rate. It is the combined employer social contribution sitting at over 21 percent on top of every salary, before a single dong of income tax. Get that into your offer modelling before you send the package.
Vietnam employer social contributions land at 21.5% on every salary. That number does not move with income. It applies from the first dong to the contribution ceiling.
Add the five-band PIT schedule up to 35%, monthly filing deadlines, and a contribution ceiling that changes mid-year in 2026.
Build the full cost before you make the offer. Run the numbers first.
