Hiring and salary standards in Vietnam

How to hire employees in Vietnam and how much to pay them.

Vietnam has become an attractive market for foreign companies after experiencing rapid growth in its manufacturing, tech and IT sectors, all buoyed by the country’s relatively competitive wages.

As the country continues to grow its economy, wages are expected to rise.

Foreign employers looking to attract and retain the best talent need to understand Vietnam’s payroll system and how to develop appropriate salary structures for their employees. 

Understanding the salaries in Vietnam

Wage computation in Vietnam

Generally, an employee’s typical monthly salary package includes their gross salary and mandatory insurance contributions. 

Salaries and bonuses are subject to personal income taxes (PIT) in Vietnam and are levied on the balance after mandatory insurance contributions have been deducted.

An employee may also receive allowances and monetary or non-monetary benefits designed to retain staff. Some of these are subject to PIT.

Taxable benefits include:

  • Housing rent;
  • Payments for power, water, and associated services for employees that amount to more than 15 percent of their total taxable income;
  • Transportation allowances;
  • Premiums for life insurance;
  • Health care services.

Prefixed lump sum amounts (or “khoan chi” amounts) for telephone calls and services, stationery, uniforms and per diem allowances are not subject to taxes if the amounts are within the levels set out under regulations.

Foreigners that work in Vietnam are also exempted from PIT on various benefits such as relocation allowances for moving into the country, airfare to their home country, and education fees for their children.

Average salaries in Vietnam across regions

On January 1 2020, region-based minimum wages for non-state employees in Vietnam increased by an average of 5.5%. 

With the cost of living dramatically different throughout Vietnam, the government divides the country into four salary regions for the purpose of issuing minimum wages, reflecting the economic realities of the urban/rural divide. The increase in the minimum wage for 2020 is summarised in the table below.

Monthly minimum wage by region

RegionAreas Included2020 Minimum Wage
IHanoi; Hai Phong; Ho Chi Minh City and its neighboring provinces of Dong Nai, Binh Duong, and Ba Ria; Vung TauVND 4,420,000 ($190 USD)
IIOutskirts of Hanoi and Ho Chi Minh City; other large and medium-sized cities such as Da Nang, Nha Trang, and Can ThoVND 3,920,000 ($168 USD)
IIISmaller provincial cities and suburban districtsVND 3,430,000 ($148 USD)
IVThe least developed and sparsely populated rural and mountainous regions of VietnamVND 3,070,000 ($132 USD) 

Companies are not permitted to pay unskilled employees monthly wages which are lower than the relevant minimum wage. Wages paid to employees who have undergone vocational training should be at least 7% higher than the minimum salary.

Fresh graduate salaries in Ho Chi Minh City

In Emerhub’s experience, fresh university graduates in Vietnam are receiving on average around US$250 to US$380.

According to a study by JobStreet,  Vietnam’s average salary for fresh graduates increased from US$225 in 2017 to US$345 in 2019.

Vietnamese employees commonly join a company on a low salary with the expectation of a significant increase. And the younger the employee, often the steeper the increase. It is not unheard of that employees expect a 40% increase on their salary after one year.

2020 salary guide in Vietnam

Ho Chi Minh City and Hanoi are regarded as having the highest salaries in Vietnam, although this does vary depending on the industry. We have collected data on a range of positions in four main industries below on the current salary ranges for finance, legal, sales and marketing and administrative positions.

Since the differences in salaries between Ho Chi Minh City and Hanoi are relatively small, we have combined the results based on the level of seniority instead of geographical location.

Finance salaries in Vietnam

Years of experienceExamples of positionsMonthly salary range in Ho Chi Minh City and Hanoi (USD)
0-2Retail Relationship Manager500-800
2-4Credit Approval Officer 500-1,000
5-7Internal Audit Specialist1,500-2,500
7-10Head of Sales (Corporate Banking)4,000-7,000

Legal salaries

Years of experienceExamples of positionsSalary range in Ho Chi Minh City and Hanoi (USD)
2-4Paralegal800-1,500
6-8Senior Associate3,000-10,000
8-10Legal Counsel6,000-15,000

Sales and Marketing salaries

Years of experienceExamples of positionsSalary range in Ho Chi Minh City and Hanoi (USD)
1-3Account Executive500-1,000
2-8Copywriter1,000-3,000
3-8Art Director1,500-3,000
8+Creative Director3,000-5,000

Administrative salaries

Years of experienceExamples of positionsSalary range in Ho Chi Minh City and Hanoi (USD)
0-2Receptionist400-700
2-4Personal Assistant1,000-2,000
4-6Office Manager1,500-3,000
7-10 HR Manager2,000-6,000

Finding employees in Vietnam

Negotiating salaries with job applicants

It is a common practice to ask for a candidate’s current (or last) salary during the shortlisting process. Usually, candidates expect a 10-50% increase to change jobs.

Emerhub recommends to ask the candidates for their expected salary first and then negotiate if needed. Usually, the candidates are willing to modify their initial request.

Once you agree on compensation, it is standard to pay 85% of the proposed gross salary to the candidate during the two month probation period. During this time the employer and employee negotiate the employment contract and upon completion of the probation period enter into that contract with full salary.

Vietnamese candidates usually provide their desired salary amount as a net salary (after taxes). However, we recommend signing the employment contracts as a pre-tax gross salary to make the payroll calculations easier.

Salaries are paid monthly and a 13th salary is expected, even if not requested.

The best time to hire in Vietnam

The golden period of recruitment in Vietnam is the first two months after the Lunar New Year celebrations. It is a market standard to pay the 13th salary before the Lunar New Year after which employees considering a new position tend to leave their post.

In Emehub’s experience candidates, especially younger employees, tend to leave a job before finding a new position. This means the recruitment cycle can be very fast after the New Year.

Hiring employees in Southeast Asia
Emerhub web app for hiring local employees without having to set up a legal entity

Hiring foreign workers in Vietnam

Currently, there is no enforced ratio that companies must adhere to when employing foreign nationals and local employees. Expert positions can be filled by a foreigner if they have three years of experience and higher education, but both must be evidenced.

In order to apply for a work permit for a foreign employee, the employer needs to provide sufficient reasons such as international experience, a good level of English and specialist skillset required for the position. From January 2021 an approval from the Labour Department will also be required.

Paying the 13th salary in Vietnam

It is also possible to motivate employees to stay with your company by paying more than one month’s salary as the 13th salary (Tet bonus). This is common in sectors where employees are harder to recruit and retention is more important.

Salaries do not tend to be a well-kept secret in Vietnam, so depending on the salary levels it is common that people ask for an increase before the first year is over if they feel that others are paid more for a similar level position.

Recruitment in Vietnam with Emerhub

For companies looking to recruit it can be time-consuming to understand the hiring and salary standards in Vietnam and working with a specialized recruitment service helps to navigate some of these challenges. 

Our consultants can assist your company to match the right talent to the right role, and help you with all of the administration associated with recruitment including setting salary and managing candidate expectations. 

Let's grow your business in Vietnam

Emerhub has years of experience with headhunting in Vietnam. Get in touch with Emerhub by filling in the form below and our consultants will reach out to you within a few working hours.

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