Payroll calculation in Vietnam involves multiple systems such as social insurance (SI / HI / UI) and personal income tax (PIT), making it a challenging area for many Japanese companies.
In this article, we summarize frequently asked payroll questions in a clear Q&A format, covering payroll calculation, deductions, social insurance, and foreign employee handling.
Basic Payroll Calculation FAQs
Q. In what order is payroll calculated in Vietnam?
A. Payroll is generally calculated in the following order:
Gross salary → Social insurance deductions → Taxable income → PIT calculation → Net salary.
It is critical that social insurance is calculated before tax.
For a full overview, please refer to “ Basic Rules of Payroll Calculation in Vietnam ”.
Q. Is monthly salary the standard payroll system in Vietnam?
A. Yes. Monthly salary is the standard in Vietnam. Even daily or hourly wages are usually aggregated and processed on a monthly basis.
Social Insurance (SI / HI / UI) FAQs
Q. Does social insurance apply to all salary components?
A. No. Social insurance applies mainly to base salary and fixed, regularly paid allowances.
Irregular bonuses and Tet bonuses are generally excluded.
For detailed criteria, see “ Social Insurance Eligibility and Contribution Calculation ”.
Q. What is the employee contribution rate for social insurance?
A. For Vietnamese employees, the employee contribution rate is SI 8% / HI 1.5% / UI 1%, totaling 10.5%.
Q. Is unemployment insurance (UI) required for foreign employees?
A. No. Unemployment insurance (UI) applies only to Vietnamese employees and does not apply to foreign employees.
For details, please refer to “ Social Insurance for Foreign Employees ”.
Personal Income Tax (PIT) FAQs
Q. At what stage is PIT calculated?
A. PIT is calculated after social insurance deductions, based on taxable income, and is applied at the final stage.
For the overall deduction flow, see “ How Payroll Deductions Work (SI / HI / UI / PIT) ”.
Q. Is the Tet bonus subject to PIT?
A. Yes. The Tet bonus is subject to personal income tax (PIT).
Foreign Employee FAQs
Q. Are foreign employees required to enroll in Vietnam’s social insurance?
A. Yes. If certain conditions are met (such as a labor contract of one year or more and a valid work permit), foreign employees are required to enroll in social insurance.
Practical and Operational FAQs
Q. What are common payroll mistakes made by Japanese companies?
A. Common issues include incorrect social insurance scope, wrong deduction order, improper handling of foreign employees, and failure to reflect legal updates.
Specific examples are summarized in “ Common Payroll Mistakes Japanese Companies Make in Vietnam ”.
Managing Payroll Accurately in Vietnam
Vietnam payroll management requires careful handling of social insurance, PIT, foreign employees, and frequent legal changes.
With EST, you can centralize payroll, deductions, and social insurance management in Vietnam, significantly reducing operational risk for Japanese companies.
👉 We also recommend reading “ Basic Rules of Payroll Calculation in Vietnam ”.
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Basic Rules of Payroll Calculation in Vietnam
