Social insurance. PIT progressive. Compulsory funds. Vietnam payroll, handled.
Vietnam’s payroll is not a single deduction – it is a layered system of compulsory social funds, progressive personal income tax, and labour code obligations enforced at provincial level. It demands a live SI multi-fund engine, PIT progressive slab computation with dependency deductions, health and unemployment insurance tracking, and in-country teams with direct authority relationships. Most providers deliver two of these. Mercans delivers all of them – on a single proprietary stack with no intermediaries.
native payroll
vs nearest peer
since inception
- Employer SI
- 17.5% (14%+3%+0.5%)
- Employee SI
- 8% (retire + survivor)
- Employer HI
- 3%
- Employee HI
- 1.5%
- Employer UI
- 1%
- Employee UI
- 1%
- SI Base Ceiling
- 20× base salary (region-specific)
- PIT Income Tax
- Progressive 5%–35%
- PIT Deduction (Self)
- VND 15,500,000/month
- PIT Deduction (Dependent)
- VND 6,200,000/dependent/month
- PIT Non-Resident
- Flat 20%
- Trade Union Fee (ER)
- 2% of SI salary fund
- Contracts
- Vietnamese mandatory
- Severance
- 0.5 month / year (2+ yrs)
- Payment Channel
- Bank transfer · VND only
Payroll compliance: the details that can’t be missed
Vietnam’s regulators enforce at both national and provincial level. Vietnam Social Security (VSS) retroactively assesses underpaid SI contributions with interest. The General Department of Taxation auto-flags PIT discrepancies during annual finalisation. MOLISA inspects labour contract compliance and working hour records. Provincial labour departments enforce independently. None of these failures announce themselves – they accumulate silently until an inspection makes them very visible.
SI retroactive shortfall + interest
VSS audits compare declared SI bases against actual compensation. Under-reported bases trigger retroactive contribution demands plus daily late-payment interest. Employers bear both shares for periods of non-compliance.
PIT under-withholding on annual finalisation
Vietnam’s PIT annual finalisation (by March 31) reconciles monthly withholding against the full-year liability. Systematic under-withholding results in employer surcharges plus interest from the original due dates.
Labour contract non-compliance
Vietnam’s Labour Code requires Vietnamese-language contracts with specific mandatory clauses. MOLISA inspections check contract form, probation terms, working hour records, and overtime limits (max 40 hrs/month, 200 hrs/year). Violations carry administrative fines per employee.
Regional minimum wage miscalculation
Vietnam uses four regional minimum wage zones (I–IV) with different rates. An employer applying Zone II rates to Zone I employees produces systemic underpayment that triggers both MOLISA fines and employee claims across every affected pay period.
The three types of providers who struggle with Vietnam
Global Aggregator Platforms
Platforms like Deel, Remote, and Rippling operate through a partner network in Vietnam — they don’t own the entity, don’t directly manage VSS filings, and don’t control the provincial compliance relationship. When regional minimum wages change, the instruction travels: platform → partner → your payroll. Each handoff introduces delay and interpretation risk.
- ×No direct VSS relationship — third-party intermediary handles filings
- ×Regional minimum wage zone mapping typically unsupported
- ×PIT dependency deduction tracking often manual or absent
- ×Regulatory updates filtered through partner SLAs, not live
Large Global Payroll Incumbents
ADP, Ceridian, and similar incumbents have Vietnam coverage — in name. In practice, their Vietnam coverage is often delivered through regional partners or legacy systems that weren’t built for Vietnam’s multi-fund SI architecture, regional wage zones, or the mandatory trade union fee calculation.
- ×SI funds collapsed into a single rate — fund-by-fund reporting absent
- ×Trade union fee calculation typically manual workaround
- ×Long implementation timelines — Vietnam not a core market
- ×No Vietnamese-language contract generation in-platform
Local Vietnamese Firms
Local Vietnamese accounting and BPO firms know the market — but they can’t scale with you. No payroll technology platform, no HCM integration, no multi-country consolidation, and no data security certifications that multinationals require. Fine for 30 employees in Ho Chi Minh City. Inadequate at 300 across multiple provinces.
- ×No proprietary payroll technology — manual spreadsheet-based processing
- ×No HCM connector — Workday, SAP, Oracle feeds require custom work
- ×No data security certifications (SOC 1/2, ISO 27701, BCR)
- ×No multi-country consolidation — cannot report across Vietnam + other APAC entities
The only provider that closes every gap
Mercans is the only Vietnam payroll provider that combines a proprietary payroll technology stack, full-time in-country compliance teams, direct authority relationships, and enterprise-grade data security – simultaneously, on one contract, with no intermediaries.
The only engine built for Vietnam’s actual payroll architecture
G2N Nova™ is the world’s only API-first gross-to-net payroll engine. It natively models Vietnam’s social insurance, health insurance, and unemployment insurance as three distinct calculation layers, handles the four regional minimum wage zones, enforces SI base ceilings (20× base salary), runs PIT progressive computation with dependency deductions, and auto-calculates the mandatory trade union fee. This isn’t configuration. It’s engineering.
Full-time Vietnam team – not a partner you phone when things break
Mercans employs full-time payroll and compliance professionals in Vietnam. They maintain active relationships with VSS, the General Department of Taxation, and MOLISA – not through a contact directory, but through ongoing regulatory engagement. When the government adjusts regional minimum wages, when VSS updates contribution reporting formats, when MOLISA issues a new labour circular – we know before it reaches your inbox.
The security posture multinationals require – and Vietnam now mandates
Vietnam’s Decree 13/2023/ND-CP on Personal Data Protection requires payroll processors handling employee personal data to maintain documented privacy controls, consent management, and impact assessment frameworks. Mercans holds BCR approval, ISO 27701 certification, SOC 1 & 2 certifications, and ISO 27017/27018 – the only payroll provider in APAC with this complete certification stack. Zero security breaches since inception.
Where Mercans wins on every Vietnam-specific capability
Each row is a Vietnam-specific capability. Each cell shows native coverage as a fill bar – full = native in-platform, half = partial / manual workaround, empty = gap.
Vietnam Capability Coverage · 11 dimensions
SI + HI + UI separate
5 brackets · 5%–35%
20× base salary cap
Workday · SAP · Oracle
Every rate. Every cap. Every obligation.
Vietnam payroll operates on exact numbers with hard deadlines across national and provincial authorities. Mercans builds every figure below into G2N Nova™ and monitors them proactively – so you’re never discovering a rate change from a penalty notice.
Vietnam · Rate & Compliance Dashboard
Live 2025–26Three Insurance Funds Are Three Separate Engines
Vietnam’s compulsory insurance system comprises social insurance, health insurance, and unemployment insurance – each with independent rates, base calculations, and filing requirements. A compliant Vietnam payroll must calculate and report all three independently per employee. Mercans’ G2N Nova™ maintains them as separate engines.
→ Modelled natively in G2N Nova™Regional Minimum Wage Zones Affect SI Base Floors
Vietnam’s four regional minimum wage zones (Zone I: Ho Chi Minh City, Hanoi; Zone IV: rural areas) set different wage floors. The minimum wage directly affects the SI contribution base floor. An employer applying the wrong zone produces systemic underpayment across every pay period.
→ Automatic zone assignment per employee work locationPDPD Compliance Is a Payroll Processor Obligation
Vietnam’s Decree 13/2023/ND-CP on Personal Data Protection places explicit obligations on entities that process employee personal data – including payroll providers. Non-compliant processors create direct liability for the employers they serve.
→ BCR · ISO 27701 · PDPD agreements standardPIT Annual Finalisation Reconciles the Entire Year
Vietnam’s PIT annual finalisation (deadline March 31 for employers) reconciles monthly withholding against the full-year liability including all dependency deductions. Systematic errors in monthly PIT computation produce large year-end discrepancies that attract surcharges and interest.
→ Pre-finalisation audit on every employee before March deadlineRun a Vietnam payroll. Right here, right now.
Switch workforce type. Move the slider. Every number you see is the same calculation G2N Nova™ runs in production – multi-fund SI logic, PIT progressive computation, dependency deductions, and true cost of employment exposed live.
Vietnam Payroll Sample · Live
G2N Nova™ engineEight things only Vietnam experts know to handle
These are the compliance details that don’t appear in standard payroll setup guides – but appear in every VSS audit, tax inspection, and MOLISA review we’ve encountered in Vietnam over 15 years.
SI Contribution Base Is Broader Than Basic Salary
Vietnam’s SI base includes basic salary plus allowances that are “fixed and regular” per the labour contract. Variable bonuses and one-time payments are excluded, but recurring allowances (position, responsibility, seniority) are included. Under-reporting the SI base is the most common Vietnam compliance error.
Four Regional Minimum Wage Zones Affect Everything
Vietnam’s four minimum wage zones (Zone I highest, Zone IV lowest) determine not just minimum pay but also affect SI contribution base floors. An employer with staff across Ho Chi Minh City (Zone I) and rural provinces (Zone IV) applies different minimum thresholds. The zones are revised annually by government decree.
PIT Dependency Deductions Require Registration
Vietnam’s PIT allows a personal deduction of VND 15,500,000/month plus VND 6,200,000 per registered dependent. Dependents must be formally registered with the tax authority via Form 02/DK-NPT-TNCN. Unregistered dependents cannot be claimed – and retroactive registration is limited to the current tax year.
Non-Resident PIT Is Flat 20% with No Deductions
Non-residents (present in Vietnam fewer than 183 days in 12 consecutive months) face flat 20% PIT on Vietnam-source employment income – with no personal or dependency deductions. The resident/non-resident determination affects every PIT calculation and can change mid-year if the 183-day threshold is crossed.
Trade Union Fee Is Mandatory Even Without a Union
Employers must pay 2% of the SI salary fund as a trade union fee regardless of whether a trade union exists at the enterprise. Of this, 1% is remitted to the upper-level trade union and 1% is retained at the enterprise level (or fully remitted if no enterprise union exists). This is an employer-only cost that most international platforms omit.
Severance Calculation Excludes SI-Covered Service Periods
Vietnam’s severance allowance (half a month per year of service for employees with 12+ months) only applies to service periods not covered by unemployment insurance. Since UI became mandatory in 2009, severance for post-2009 service is effectively replaced by UI benefits. This interaction creates calculation complexity for long-tenure employees.
Overtime Caps Are Strict and Actively Enforced
Vietnam’s Labour Code limits overtime to 40 hours/month and 200 hours/year (300 hours in specific industries with government approval). Overtime rates are 150% (weekday), 200% (weekend), and 300% (public holiday). MOLISA inspectors actively audit overtime records. Violations carry per-employee administrative fines.
Foreign Workers Are Subject to Mandatory SI Since 2018
Foreign nationals with work permits and labour contracts of 12+ months in Vietnam are subject to compulsory social insurance (retirement, sickness, maternity, occupational accident, and occupational disease). Health insurance has applied since 2018; pension contributions are being phased in. Employers who exclude foreign workers face VSS back-assessments.
One workforce. Two entirely different compliance tracks.
The foundational split in Vietnam payroll – Vietnamese nationals on full statutory coverage vs. foreign workers on conditional obligations – is not a configuration toggle. It requires parallel calculation engines, different filing obligations, and different terminal settlement frameworks. Mercans runs both simultaneously on every pay cycle.
Parallel Compliance Engines
SI registration is mandatory from Day 1. Employer contributes 17.5% (14% retirement + 3% sickness/maternity + 0.5% occupational) and employee 8% (retirement + survivorship). Base includes salary plus fixed regular allowances, capped at 20× base salary.
Health insurance and unemployment insurance run in parallel. HI (ER 3% + EE 1.5%) and UI (ER 1% + EE 1%) are separate from SI with independent filing. UI base is capped at 20× regional minimum wage.
PIT progressive rates with dependency registration. Five brackets (5%, 15%, 25%, 30%, 35%) effective Jan 2026. Personal deduction VND 15,500,000/month; dependent deduction VND 6,200,000/dependent/month. Dependents must be formally registered with the tax authority.
Severance interacts with unemployment insurance coverage. Half a month per year of service, but only for periods not covered by UI. Post-2009 service effectively covered by UI benefits, creating split calculation for long-tenure employees.
SI is mandatory for foreign workers with 12+ month contracts. Since 2018, foreign nationals with valid work permits and definite-term contracts of 12 months or more are subject to compulsory SI. Pension contributions are being phased in per government roadmap.
PIT depends on residency status. Residents (183+ days in 12 months) face progressive 5%–35% with deductions. Non-residents face flat 20% with no deductions. Status can change mid-year when the 183-day threshold is crossed.
Work permit is a payroll prerequisite. Foreign workers without valid work permits cannot be legally employed. Work permits have a maximum duration of 2 years and require renewal. Payroll processing without a valid permit exposes the employer to MOLISA penalties.
Benefits and allowances for expats are taxable differently. Housing, relocation, children’s education, and home-leave flights provided to foreign workers are generally taxable benefits under PIT. The tax treatment depends on how benefits are structured in the labour contract.
Every obligation. Every authority. Mercans owns the calendar.
Vietnam compliance runs across VSS, the General Department of Taxation, MOLISA, and provincial authorities on monthly, annual, and event-triggered cadences. Mercans’ managed payroll absorbs every filing as standard scope – you don’t track deadlines. We do.
SI + HI + UI Contribution Filing
Three compulsory insurance fund contributions (social, health, unemployment) filed and remitted to Vietnam Social Security for all enrolled employees. Includes both employer and employee shares. Late filing triggers daily interest penalties.
PIT Withholding Declaration
Monthly PIT withholding declaration filed with the General Department of Taxation. Includes progressive computation for residents and flat 20% for non-residents. Dependency deductions applied per registered dependents.
Trade Union Fee Remittance
2% of the SI salary fund remitted as trade union fee. Split between upper-level trade union (1%) and enterprise-level (1%), or fully to upper-level if no enterprise union exists. Mandatory regardless of union presence.
PIT Annual Finalisation
Annual reconciliation of monthly PIT withholding against full-year liability for all employees. Includes adjustment for over/under-withholding, dependency deductions, and any additional income sources. Employer files on behalf of employees who authorise.
SI Enrollment / De-enrollment
New employee SI registration within 30 days of hire. De-enrollment on termination with SI book issuance. VSS requires accurate salary base declaration and full employment history for each enrolled employee.
Final Settlement + Severance
Terminal settlement including severance (0.5 month/year for pre-UI service periods), earned leave encashment, proportionate 13th-month salary if applicable, and SI book handover. Must be completed within 14 days of termination per the Labour Code.
Work Permit & Labour Contract Compliance
MOLISA requires Vietnamese-language contracts with mandatory clauses. Foreign worker work permits must be valid and match the employment terms. Provincial labour departments conduct periodic inspections of contract compliance and overtime records.
Regional Minimum Wage Update
The government issues an annual decree adjusting regional minimum wages across four zones. The update affects SI base floors, minimum compensation thresholds, and overtime rate bases. Employers must implement within the effective date – typically July 1.
Vietnam is one market. Mercans covers the entire region.
For companies running payroll across multiple Asian markets, complexity multiplies – not adds. Each country runs its own labour authority, social insurance body, and tax regime. Mercans covers all major APAC markets on a single platform with country-specific compliance engines running in parallel.
covered
1 contract
consolidation
APAC
Every filing. Every format. Submission-ready.
Mercans generates the exact file types that VSS, the General Department of Taxation, MOLISA, and provincial authorities expect to receive — not formatted summaries that need reformatting before you can submit them.
