2020 Vietnam payroll modification for foreign workers

Trường Lăng

December 31, 2019


2020 Vietnam payroll modification for foreign workers

Trường Lăng

December 31, 2019

Payroll obligations are subject to change again in 2020 after the major November 2018 changes brought by 143/2018/ND-CP decree on compulsory social insurance payments and the payroll for foreign employees working in Vietnam. We will examine below the changes to consider soon and, as a quick reminder, we will pinpoint the most important of Vietnam recent payroll management modifications.

Increasing contributions rate in 2020 are to be planned in the payroll of foreign workers in Vietnam

On 1 January 2020, the social insurance contributions of one company paying for employees will be:

Paid by the employer From the employee’s salary
Social Insurance 17.5% 8%
Health Insurance 3% 1.5%
Trade Union Fee 2% 0

The benefits of death and Retirement for foreign workers will also come into force at the same time (at the beginning of 2020).

Reminder on compulsory Social Insurances for foreign workers in Vietnam payroll to this day

Which foreign employees are eligible for social insurance in Vietnam ?

Not all foreign workers are eligible for compulsory Social Insurance contributions. Social Insurance only applies if they meet these below requirements:

  • Their employment contract is indefinite or, in case of definite contracts, the term of the contract is at least one full year.
  • Having a work permit, a practicing certificate, or a practicing license.


  • internally transferred to Vietnam from an office abroad.
  • reached the retirement age in Vietnam which is 60 for men and 55 for women.

What kind of insurance are applicable to foreign workers in Vietnam?

There are two types of compulsory insurance in a company for foreign employees:

  • Health insurance
  • Social insurance

Following the 143/2018/ND-CP decree, non-Vietnamese workers would be granted the same benefits as their Vietnamese partners because they would receive compensation for sickness and maternity leave, occupational diseases, accidents, retirement, and death.
Moreover, when leaving Vietnam, foreign employees would get a one-time pension payment.

Contribution rates

As following the new decree, the employment taxes for non-Vietnamese employees are:

Social Security Personal Income Tax Trade Union Fee
Health Insurance Social Insurance 5-35% for residents
20% for non-residents
3% paid by employer
1.5% paid by employee
3.5% paid by employer
0% paid by employee

These above-mentioned taxes are applied from 1 December 2018 to 31 December 2021.

The increase in Vietnam minimum wages in 2019

Common minimum wage and Regional minimum wage are two types of minimum wages in Vietnam.

About Common minimum wage

This kind of wage applies to workers employed in state-owned enterprises and companies.  In November 2019, Vietnam Government increased the common minimum wage from 1,490,000 VND/month (~ US $64.4) to 1,600,000 VND/month (~ US $69.2). Although the Common minimum wage in Vietnam has constantly increased annually, this is the highest rise within recent seven years from 2013.
Total salary is the result of the multiplication between Common minimum wage and the wage coefficient. The wage coefficient depends on your degree and position.

About Regional minimum wage

Other enterprises and companies in Vietnam will pay for their employee following the Regional minimum wage. There are four regions reflecting the socio-economic conditions of this country. The first one includes urban areas of Hanoi, Hai Phong, and Ho Chi Minh city, Dong Nai, and Binh Duong province. The fourth one covers the most rural areas of Vietnam.
As the releasing of Decree No.90/2019/ND-CP, the regional minimum wages in Vietnam at the starting of January, 2020 are:

Region Monthly minimum wage
I 4,420,000 (~US$ 191)
II 3,920,000 (~US$ 169)
III 3,430,000 (~US$ 148)
IV 3,070,000 (~US$ 133)

These above-mentioned numbers show the rise in the Region minimum wage comparing to this wage in 2019, especially the minimum wage for region I. On average, the minimum monthly wage in Vietnam increased by 195,000 VND (~US$ 8.43) which makes it an 11.43% climb.
Viettonkin Consulting stands by your side with international know-how and local knowledge, all from a single source, allowing you to expand your business successfully in a potential market like Vietnam. If you have any questions, please feel free to contact us via email: or hotline: +84 918 866 858.

Related posts


Unlocking Opportunities: A Comprehensive Guide to Talent Acquisition in Vietnam

Table of Contents Insights into the Vietnamese Labor Market and High-Demand Industries Insights from the Vietnamese Labor Market in 2023Dynamic industries with high-demand workforces in VietnamOpportunities ...
Read more
Doing Business

Public Holidays in ASEAN countries (Part 4 – Indonesia)

Table of Contents Major public holidays in IndonesiaImplications of public holidays for enterprises and companies in respect of the Calculation of Employee Salary and HolidaysThe ...
Read more
Doing Business

Public Holidays in ASEAN countries (Part 3 – Singapore)

Table of Contents Major public holidays in SingaporeImplications of public holidays for enterprises and companies  in respect of the Calculation of Employee Salary and HolidaysHow ...
Read more

Public Holidays in ASEAN countries (Part 2 – Thailand)

Table of Contents Thailand’s important holidaysImplications of public holidays for enterprises and companies in respect of the Calculation of Employee Salary and Holidays Thailand is ...
Read more

Download our Latest Ebook about Real Estate and Property!

Real estate holds a pivotal position in the development of a country, not only via the spillover impacts on other economic sectors such as construction, manufacturing, tourism, finance and banking etc. but also affecting the social dynamic by mobilizing the residency and infrastructure system. Foreign direct investment in real estate (RFDI) in Vietnam has a long running history and is unique in that it is largely dominated by the private sector compared to other industries which usually still have a rather large Government involvement. International capital has consistently been selecting real estate as the destination of choice, given that RDI has always been in the top 2 and 3 for volume inflow over the last 10 years, even throughout extremely turbulent periods such as COVID-19, per the General Statistics Office of Vietnam’s (GSO) data. Find out more in this ebook edition.

Tải cuốn ebook mới nhất về nền kinh tế số Việt Nam!

The digital economy of Vietnam has been fueled and accelerated by the global digital trends and the pandemic Covid-19. The movement of digital transformation is underway in every corner of Vietnamese life, strongly influencing the way people do things. Digital economy is the future of the Vietnam economy. Realizing the potential of the digital economy, the Vietnam government has issued policies, guidelines and created legal frameworks to support and further enhance this economy. In this ebook edition, the digital economy is looked at from different angles. Perspectives from the key elements comprising Vietnam digital economy are examined and discovered.

Our Happy Clients