{"id":1118,"date":"2025-12-10T11:51:00","date_gmt":"2025-12-10T02:51:00","guid":{"rendered":"https:\/\/est.haro-inc.com\/?p=1118"},"modified":"2025-12-13T13:32:23","modified_gmt":"2025-12-13T04:32:23","slug":"vietnam-payroll-rule","status":"publish","type":"post","link":"https:\/\/est.haro-inc.com\/en\/pyroll-en\/vietnam-payroll-rule\/","title":{"rendered":"Basic Rules of Payroll Calculation in Vietnam"},"content":{"rendered":"\n<p>For Japanese companies operating subsidiaries in Vietnam, <span class=\"swl-inline-color has-black-color\"><span class=\"swl-marker mark_orange\"><strong>payroll calculation<\/strong><\/span><\/span> is one of the most important yet complex HR and labor management tasks.<br>Minimum wages by region, overtime calculation rules, social insurance (SI, HI, UI), and personal income tax (PIT) are all structured very differently from Japan.<\/p>\n\n\n\n<p>In this article, we explain the <span class=\"swl-marker mark_orange\"><strong>fundamental rules of Vietnamese payroll in the order of \u201coverall framework \u2192 individual elements \u2192 practical points\u201d<\/strong><\/span>.<br>This is a comprehensive guide that can be used directly in practice, from those newly assigned to Vietnamese payroll to managers who want to reorganize their understanding of the system.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Overall Payroll Flow in Vietnam<\/h2>\n\n\n\n<p>Payroll calculation in Vietnam generally follows the steps below.<\/p>\n\n\n\n<div class=\"wp-block-group has-border -border02 is-style-bg_grid\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list is-style-num_circle\">\n<li>Confirmation of basic salary and allowances<\/li>\n\n\n\n<li>Aggregation of attendance (working days, overtime, holiday work)<\/li>\n\n\n\n<li>Calculation of social insurance contributions (SI, HI, UI)<\/li>\n\n\n\n<li>Calculation of personal income tax (PIT)<\/li>\n\n\n\n<li>Finalization of net salary and total company labor cost<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p>These elements are <span class=\"swl-marker mark_orange\"><strong>closely interrelated<\/strong><\/span>, and an error in any one of them can disrupt the entire calculation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Basic Salary and Minimum Wage System (Region I\u2013IV)<\/h2>\n\n\n\n<p>In Vietnam, minimum wages are set by <span class=\"swl-marker mark_orange\"><strong>region (Region I\u2013IV)<\/strong><\/span>.<br>Companies are not allowed to set a basic salary below the minimum wage applicable to the region where the workplace is located.<\/p>\n\n\n\n<table class=\"wp-block-table\">\n<thead>\n<tr>\n<th>Region<\/th>\n<th>Main Applicable Areas (Examples)<\/th>\n<th>Characteristics<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><strong>Region I<\/strong><\/td>\n<td>Central Ho Chi Minh City, Central Hanoi<\/td>\n<td>Highest minimum wage (major urban areas)<\/td>\n<\/tr>\n<tr>\n<td><strong>Region II<\/strong><\/td>\n<td>Hai Phong, Da Nang, Binh Duong Province<\/td>\n<td>Semi-urban areas with many industrial zones<\/td>\n<\/tr>\n<tr>\n<td><strong>Region III<\/strong><\/td>\n<td>Provincial cities and surrounding industrial areas<\/td>\n<td>Mid-level regions<\/td>\n<\/tr>\n<tr>\n<td><strong>Region IV<\/strong><\/td>\n<td>Rural and remote areas<\/td>\n<td>Lowest minimum wage<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n<p>This regional classification affects not only minimum wages but also the <span class=\"swl-marker mark_orange\"><strong>upper limit for unemployment insurance (UI)<\/strong><\/span>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Types of Allowances and How They Are Treated for Tax and Insurance<\/h2>\n\n\n\n<p>A key point in Vietnamese payroll design is that <span class=\"swl-marker mark_orange\"><strong>the treatment of each allowance differs for social insurance (SI, HI, UI) and personal income tax (PIT)<\/strong><\/span>.<br>Not all allowances are uniformly subject to tax and insurance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Basic Rules for Determining Taxable and Insurable Allowances<\/h3>\n\n\n\n<p>In general, the following principles apply.<\/p>\n\n\n\n<div class=\"wp-block-group has-border -border02 is-style-bg_grid\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list\">\n<li>Items paid <span class=\"swl-marker mark_orange\"><strong>regularly on a fixed monthly basis<\/strong><\/span> as compensation for work are likely to be subject to insurance and tax<\/li>\n\n\n\n<li>Expense reimbursements or welfare-type benefits may be non-taxable and non-insurable<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Common Allowances and Their Treatment (Overview)<\/h3>\n\n\n\n<table class=\"wp-block-table\">\n<thead>\n<tr>\n<th>Allowance Example<\/th>\n<th>Social Insurance<\/th>\n<th>PIT<\/th>\n<th>Notes<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Position \/ Responsibility Allowance<\/td>\n<td>Applicable<\/td>\n<td>Applicable<\/td>\n<td>Treated similarly to basic salary<\/td>\n<\/tr>\n<tr>\n<td>Meal Allowance<\/td>\n<td>Conditional<\/td>\n<td>Conditional<\/td>\n<td>Taxable if exceeding the threshold<\/td>\n<\/tr>\n<tr>\n<td>Commuting Allowance<\/td>\n<td>Not applicable<\/td>\n<td>Conditional<\/td>\n<td>Generally requires actual expense reimbursement<\/td>\n<\/tr>\n<tr>\n<td>Housing Allowance<\/td>\n<td>Applicable<\/td>\n<td>Applicable<\/td>\n<td>Special caution required for expatriates<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n<p>If allowances are poorly designed, <span class=\"swl-marker mark_orange\"><strong>unexpected social insurance contributions or tax burdens<\/strong><\/span> may arise, so careful consideration is required at the payroll design stage.<\/p>\n\n\n\n<p>\u25b6 Detailed explanation: <a href=\"https:\/\/est.haro-inc.com\/en\/payroll\/vietnam-allowance-tax-insurance\/\" title=\"\">Allowances in Vietnam and Their Tax &amp; Social Insurance Treatment<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Overtime, Night Work, and Holiday Work Calculation Rules<\/h2>\n\n\n\n<p>In Vietnam, overtime premium rates are clearly defined by law.<\/p>\n\n\n\n<div class=\"wp-block-group has-border -border02 is-style-bg_grid\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list\">\n<li>Weekday overtime: <strong>at least 150%<\/strong> of normal wages<\/li>\n\n\n\n<li>Weekly rest day work: <strong>at least 200%<\/strong><\/li>\n\n\n\n<li>Public holiday work: <strong>at least 300%<\/strong><\/li>\n\n\n\n<li>Night work: additional premium applies<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p>Calculation errors can lead to unpaid overtime claims or corrective orders from authorities.<\/p>\n\n\n\n<p>\u25b6 Related article: <a href=\"https:\/\/est.haro-inc.com\/en\/payroll\/vietnam-overtime-calculation\/\" title=\"\">How to Calculate Overtime and Holiday Work Pay<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Basic Structure of Social Insurance (SI, HI, UI)<\/h2>\n\n\n\n<p>In Vietnam, enrollment in the following three types of insurance is mandatory.<\/p>\n\n\n\n<div class=\"wp-block-group has-border -border02 is-style-bg_grid\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list\">\n<li>SI (Social Insurance)<\/li>\n\n\n\n<li>HI (Health Insurance)<\/li>\n\n\n\n<li>UI (Unemployment Insurance)<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p>Contributions are divided into <span class=\"swl-marker mark_orange\"><strong>employee portions and employer portions<\/strong><\/span>, both of which are processed during payroll calculation.<\/p>\n\n\n\n<p>\u25b6 Detailed explanation: <a href=\"https:\/\/est.haro-inc.com\/en\/social-insurance\/vietnam-insurance\/\" title=\"\">Eligibility and Calculation of Social Insurance in Vietnam<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Steps for Calculating Personal Income Tax (PIT)<\/h2>\n\n\n\n<p>PIT is calculated through the following steps.<\/p>\n\n\n\n<div class=\"wp-block-group has-border -border02 is-style-bg_grid\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list is-style-num_circle\">\n<li>Determine total gross income<\/li>\n\n\n\n<li>Deduct social insurance contributions<\/li>\n\n\n\n<li>Apply personal and dependent deductions<\/li>\n\n\n\n<li>Apply progressive tax rates to taxable income<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p>From July 2026, <span class=\"swl-marker mark_orange\"><strong>amendments to the Personal Income Tax Law<\/strong><\/span> are scheduled to take effect.<\/p>\n\n\n\n<p>\u25b6 Related article: <a href=\"https:\/\/est.haro-inc.com\/en\/tax-pit\/vietnam-pit-law-amendment-2026\/\" title=\"\">Personal Income Tax Law Amendment (Effective July 2026)<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Difference Between Net Salary and Total Company Labor Cost<\/h2>\n\n\n\n<p>In Vietnam, it is essential to clearly distinguish the following three amounts.<\/p>\n\n\n\n<div class=\"wp-block-group has-border -border02 is-style-bg_grid\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list\">\n<li>Total gross salary (Gross)<\/li>\n\n\n\n<li>Net take-home pay (Net)<\/li>\n\n\n\n<li>Total company labor cost (Company Cost)<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p>If the employer\u2019s share of social insurance is not taken into account, <span class=\"swl-marker mark_orange\"><strong>actual labor costs may be underestimated<\/strong><\/span>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion: A Comprehensive Understanding Is Essential for Vietnamese Payroll<\/h2>\n\n\n\n<p>Payroll in Vietnam involves a complex interplay of minimum wages, social insurance, taxes, and labor laws.<br>Rather than handling issues in isolation, it is crucial to operate with a <strong><span class=\"swl-inline-color has-swl-deep-01-color\">clear understanding of the overall framework<\/span><\/strong>.<\/p>\n\n\n\n<p>EST provides an integrated solution for managing these complex payroll and HR processes, enabling both headquarters in Japan and local Vietnamese offices to operate with confidence.<\/p>\n\n\n<div class=\"p-blogParts post_content\" data-partsID=\"983\">\n<div class=\"swell-block-fullWide pc-py-60 sp-py-40 has-bg-img alignfull lazyload\" style=\"background-color:rgba(247, 247, 247, 0.41)\" data-bg=\"http:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/DSC_1122.jpg\"><div class=\"swell-block-fullWide__inner l-article\">\n<div class=\"wp-block-columns\">\n<div class=\"wp-block-column\">\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"600\" height=\"400\" src=\"http:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta2.png\" alt=\"\" class=\"wp-image-504\" srcset=\"https:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta2.png 600w, https:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta2-300x200.png 300w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure>\n\n\n\n<div class=\"swell-block-button blue_ is-style-btn_normal\"><a 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complex HR and labor management tasks.Minimum wages by region, overtime calculation rules, social insurance (SI, HI, UI), and personal income tax (PIT) are all structured very differently from Japan. In this article, we explain the fundamental rules of Vietnamese [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1061,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"swell_btn_cv_data":"","_locale":"en_US","_original_post":"https:\/\/est.haro-inc.com\/?p=1047","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-1118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pyroll-en","en-US"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/12\/column5.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/posts\/1118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/comments?post=1118"}],"version-history":[{"count":1,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/posts\/1118\/revisions"}],"predecessor-version":[{"id":1119,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/posts\/1118\/revisions\/1119"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/media\/1061"}],"wp:attachment":[{"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/media?parent=1118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/categories?post=1118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/tags?post=1118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}