If you have ever run payroll in Vietnam, you know it is not just about paying salaries on time. Payroll here sits at the intersection of labor law, social insurance, and personal income tax, and even small changes in regulations can have a real operational impact.
As of 2026, and with important reforms taking effect from the 2025 tax year, here are the compliance areas every HR team in Vietnam needs to stay on top of.
Statutory Insurances: Where Most Payroll Issues Begin
Vietnam payroll is built around three mandatory insurance schemes:
- BHXH – Social Insurance
- BHYT – Health Insurance
- BHTN – Unemployment Insurance
These are not optional, and they are audited regularly.
Current Contribution Rates (2025)
| Insurance | Employer | Employee |
|---|---|---|
| Social Insurance (BHXH) | 17.5% | 8% |
| Health Insurance (BHYT) | 3% | 1.5% |
| Unemployment Insurance (BHTN) | 1% | 1% |
| Total | 21.5% | 10.5% |
From an HR perspective, the challenge is not the percentages, it is getting the salary base right.
- BHXH and BHYT are capped at 20 times the statutory base salary
- BHTN is capped at 20 times the regional minimum wage, which varies by location
Foreign employees also need special attention. In most cases, they are not subject to Unemployment Insurance, but eligibility depends on contract type and work permit status. This is one of the most common areas where companies make mistakes.
On top of this, employers must budget for the Trade Union Fee (Kinh phí Công đoàn) 2% of the insurance salary fund. This cost applies even if your company does not have an active labor union.
Personal Income Tax: What’s Changing
Vietnam uses a progressive Personal Income Tax (PIT) system for tax residents. While the structure has been familiar for years, the 2026 reform brings meaningful changes.
Updated Deduction Levels
Before calculating PIT, HR teams can apply:
- Personal deduction: VND 15.5 million per month
- Dependent deduction: VND 6.2 million per dependent per month
- Mandatory insurance contributions, which remain fully deductible
For many employees, especially those supporting families, these changes will noticeably reduce taxable income.
New PIT Brackets
| Monthly Taxable Income | Tax Rate |
|---|---|
| Up to VND 10 million | 5% |
| Over 10 – 30 million | 10% |
| Over 30 – 60 million | 20% |
| Over 60 – 100 million | 30% |
| Above 100 million | 35% |
For non-residents, the rules remain straightforward: a flat 20% tax on Vietnam-sourced income, with no deductions.
In practice, PIT compliance is less about monthly payroll and more about annual finalization, dependent registration, residency status, and reconciliation errors often surface at year-end if records are not maintained carefully.
Why Payroll Accuracy is Important in Vietnam
From experience, most compliance issues do not come from intentional non-compliance, they come from:
- Misapplying insurance caps
- Using outdated minimum wage
- Incorrect treatment of foreign employees
- Manual adjustments made outside the payroll system
Vietnamese authorities are increasingly strict with audits, and penalties for incorrect insurance or PIT filings can add up quickly, not just financially, but also in terms of administrative time.
That is why many HR teams in Vietnam are moving away from spreadsheets and manual calculations toward localized HR and payroll systems that automatically apply the correct rates, caps, and reporting formats as regulations change.
Final Thought from the HR Desk
In Vietnam, payroll compliance is not something you “set and forget.” Rates change, thresholds move, and interpretations evolve. The role of HR is not just to follow the rules, but to anticipate change and protect the business from unnecessary risk.
Having the right processes and the right tools makes that job far more manageable.
If your HR team is still spending too much time double-checking insurance and tax calculations, it may be time to look at a better approach. HRMLabs supports Vietnam-localized HR and payroll needs, helping companies stay compliant while running payroll more efficiently.