Managed Payroll Services in Vietnam

  • Payroll Processing Vietnam

  • Fund Management Vietnam

Our Vietnam Managed Payroll Service provides businesses a convenient way to manage their payroll within Vietnam.

Our services in Vietnam include:

  • Full end to end payroll administration including adjustments, overtime, expenses etc
  • Employee payslips including both electronic and carbon based
  • Compliance with Ministry of Human Resources
  • Range of monthly and annual reports, including SHUI (Social – Health – Unemployment insurance) contribution; PIT (personal income tax) payable and employee net income
  • Mandatory Personal Income Tax (PIT) where applicable
  • End of year tax consolidation and submission

Vietnam has attracted many multinational companies in these five years including those that seek ways to diversify their manufacturing operations in Asia. Its large and young workforce has seen an increase in disposable income in the recent years. LI’s long presence in Vietnam means we are well positioned to support your expatriates’ payroll.

Our services in Vietnam include:

  • Multi-currency payroll calculation (VND, USD)
  • International payroll transfers (subject to banking regulations)
  • Management of monthly tax withholding for non-resident individuals

Are you looking for someone to apply for your employee work permits? Take a look at our Work Permit Management services.

Social Security Scheme

Vietnam’s social security system has three elements, Social Insurance (SI), Unemployment Insurance (UI) and Health Insurance (HI). SI and UI are only applicable to Vietnamese employees. HI contributions are required for Vietnamese and foreign employees under Vietnam labour contracts. Therefore, foreign employees under overseas employment contracts in Vietnam do not require HI contributions. Both the employer and employee are required to make contributions to the fund. The contribution is calculated based on the employee’s gross salary, capped at 20 times the regional gross minimum salary which is subjected to change every year.

Vietnam Tax

Ministry of Finance is responsible for managing tax in Vietnam.

Corporate Income Tax

There is no difference in tax residency for Corporate Income Tax (CIT). The CIT applies to all domestic entities which are incorporated under Vietnamese laws and foreign entities which are incorporated under foreign laws while doing business in Vietnam. The standard CIT rate is at 20%. Preferential CIT rates of 17% may be granted to certain encouraged projects. Oil and gas companies are subjected to CIT rates ranging from 32% to 50%, depending on the project’s conditions such as its location. Mineral resources companies are subjected to rates of 40% or 50%, depending on the project’s location.

Personal Income Tax

All tax residents are subjected to the Personal Income Tax (PIT) on all global taxable income. Tax residents are individuals who:

  • Reside in Vietnam for 183 days or more in either a calendar year or the period of 12 consecutive months from the date of first arrival
  • Have a permanent residence in Vietnam or foreigners with a registered permanent / temporary residence in Vietnam with a lease term of 183 days or more

Employment income is applied on progressive tax rates.

Resident Employment Income Tax Rates

Annual Taxable Income
(in million VND)
Monthly Taxable Income
(in million VND)
Rate (%)
Up to $60 Up to $5 5%
Above $60 to $120 Above $5 to $10 10%
Above $120 to $216 Above $10 to $18 15%
Above $216 to $384 Above $18 to $32 20%
Above $384 to $624 Above $32 to $52 25%
Above $624 to $960 Above $52 to $80 30%
Above $960 More than $80 35%

Other income is taxed at different rates.

Resident Other Incomes Tax Rates

Type of Taxable Income Tax rate
Business income 0.5% to 5%
Interest (but not bank interest) / dividends 5%
Sale of shares 0.1% of the sales proceeds
Capital assignment 20% of the net gain
Sale of real estate 2% of the sales proceeds
Income from copyright 5%
Income from franchising / royalties 5%
Income from winning prizes 10%
Income from inheritances / gifts 10%

Non-residents are subjected to PIT at a flat tax rate of 20% on their Vietnam-sourced employment income. For Vietnam-sourced business income, the rates are taxed between 1% and 5%, depending on the type of business activity. Other incomes are subjected to flat rates as shown below. The rates may differ if there are any Double Taxation Agreements enforced.

Non-resident Employment Income and Other Incomes Tax Rates

Type of Taxable Income Tax rate
Employment income 20%
Other Incomes Business income 1% to 5%
Interest/dividends 5%
Sale of shares/Capital assignment 0.1% of the sales proceeds
Sale of real estate 2% of the sales proceeds
Income from royalties/franchising 5%
Income from inheritance/gifts/winning prizes 10%

Other Taxes

  • There is the stamp duty, also known as business licence tax and registration fees.
  • Indirect tax – the Value Added Tax (VAT) has various rates. A 0% VAT rate is applied for exported goods or services, construction and installation in overseas and in non-tariff zones, international transportation, certain aviation and marine services. A 5% VAT rate is applied to certain essential goods and services such as clean water, agricultural activities, fresh foodstuffs, medical, education equipment and scientific and technology services etc. Additionally, certain supplies are exempted from VAT. Otherwise, there is a standard 10% VAT rate applied.
  • Foreign Contractor Tax (FCT) is applied on payments to foreign parties for goods supplied within Vietnam or associated with services rendered in Vietnam. It usually comprise of two parts – the CIT and VAT at varying rates.
  • Special Sales Tax is a form of excise tax that applies to the production or import of certain goods and the provision of certain services that varies according to the products and services.
  • Natural Resources Tax ranging from 1% to 40%, depending on the resource, is applied to the production output at a specified taxable value per unit on industries exploiting Vietnam’s natural resources. Natural water used may be exempted under certain conditions. Other methods can be used to calculate the taxable value when the commercial value cannot be determined. Crude oil, natural gas and coal gas are taxed at progressive tax rates, depending on the daily average production output.
  • Environment Protection Tax is applied to the producing and importing of certain goods deemed detrimental to the environment, where the rates vary according to the type of goods.
  • Property tax in Vietnam applies to land-use fee, land rental and non-agricultural land-use tax.
Managed Payroll Services