Payroll services in Vietnam (The 2026 guide for foreign companies)

Navigating the complexities of Vietnam payroll is a challenge for international investors entering the market. Establishing and managing a payroll system in Vietnam is not just a matter of calculating employee income, but it is about maintaining strict compliance with evolving labour laws, Personal Income Tax (PIT) regulations, and mandatory social insurance requirements. For Foreign Direct Investment (FDI) companies and representative offices, managing payroll services in Vietnam can be intricate due to legislative updates, tax structures, and reporting demands from local authorities. Even minor errors in calculation or filing can lead to severe tax arrears, administrative penalties, and significant risks during tax audits. Consequently, an increasing number of global investors are turning to professional payroll services in Vietnam as a secure and efficient compliance solution.

Quick overview of the payroll system in Vietnam

Regulations on wages and benefits in Vietnam

FDI companies operating in Vietnam must adhere to regulations governing the management of salaries and employee benefits. Ensuring that the payroll system in Vietnam is updated with the latest statutory requirements is essential for maintaining operational stability.

Important legal documents related to the salary regime of the unit

• Labour Code 2019 (No. 45/2019/QH14): The foundational document regulating wages, minimum wage levels, payment methods, deductions, and overtime pay.
• Social Insurance Law 2024 (No. 41/2024/QH15): Directly impacts the basis for social insurance contributions (monthly salary).
• Personal Income Tax Law 2025 (No. 109/2025/QH15): Regulates tax obligations and Personal Income Tax deductions for employees within an enterprise.
• Decree 293/2025/NĐ-CP: (Effective from January 1, 2026) Stipulates the new minimum wage levels applicable to employees.
• Other relevant labour and employment regulations.

Employers must ensure that salary calculations, tax withholdings, and insurance contributions comply with Vietnamese law, particularly when the regional minimum wage has adjustments.

Payroll obligations in Vietnam for FDI enterprises

Foreign-invested companies are responsible for performing multiple payroll obligations in Vietnam. Managing payroll in Vietnam for FDI enterprises requires an understanding of the following components:

Calculating wages for employees

An employee’s income may include:

• Basic salary
• Bonuses
• Overtime pay
• Allowances and subsidies (e.g., lunch, travel, housing, telephone, etc.)
• Other welfare benefits

Withholding personal income tax

Companies must withhold Personal Income Tax (PIT) from employee salaries and remit it to the tax authorities. Vietnam applies a progressive PIT rate ranging from 5% to 35%, depending on the employee’s income level after applicable deductions.

Payment of mandatory social, health, and unemployment insurance

Both employers and employees must contribute to insurance funds as prescribed to set up a payroll in Vietnam. The mandatory insurance contribution rates are as follows:

Reporting obligations

Enterprises must perform salary-related reporting, including:

• Monthly Personal Income Tax (PIT) declarations
• Social insurance reports
• Annual Personal Income Tax finalisation
• Reports to the Department of Industry and Trade for representative offices in Vietnam
• Investment reports for FDI enterprises in Vietnam

Common errors when building a payroll in Vietnam

Based on the practical experience of Viet An Law, approximately 80% of new FDI enterprises in Vietnam encounter errors in insurance contributions during their first year of operation. Utilising payroll outsourcing in Vietnam can help mitigate the following common pitfalls:

• Incorrect calculation of PIT and insurance rates: Failing to apply the progressive tax table correctly, forgetting family circumstance deductions, miscalculating taxable income, or mistakenly between social insurance, health insurance, and unemployment insurance.

• Failure to update new legal regulations: Forgetting to adjust for regional minimum wage changes (e.g., the 2026 adjustments) or missing updates to PIT thresholds and deduction levels.
• Misclassification of income and obligations: Errors in determining which allowances or bonuses are subject to mandatory insurance or PIT. Examples: Bonuses, allowances, benefits. Not all payments are treated equally under the law.
• Incorrect overtime calculations: Failing to apply the correct multipliers (150%, 200%, 300%) as stipulated by the Labour Code.
• Missing or incorrect payroll reports: Failure to submit monthly PIT reports, insurance reports, or investment and activity reports, leading to administrative fines and compliance risks.
• Human resources data errors: Mismanagement of tax identification numbers (TIN) or deduction information.
• Lack of synchronisation between accounting and payroll services in Vietnam: Discrepancies between salary records and accounting books, or failure to retain salary and tax vouchers.

Benefits of payroll accounting services in Vietnam for FDI companies and representative offices

Utilising professional payroll services in Vietnam provides significant advantages for foreign investors:

• Ensuring legal compliance: Service providers stay updated on the latest legislative changes, helping businesses avoid legal risks.
• Reducing administrative workload: Companies can focus on core business activities rather than processing complex payroll procedures.
• Increasing accuracy: Professional systems minimise errors in calculation and withholding. For instance, an FDI enterprise that miscalculated insurance for six months faced over 200 million VND in arrears and penalties before standardising its system with Viet An Law.
• Optimising payroll in Vietnam for FDI companies: Specialised providers ensure that all welfare and bonus structures are tax-efficient and compliant.

Cost of payroll outsourcing in Vietnam

The cost of payroll outsourcing in Vietnam depends on the number of employees and the scope of services. Below is a reference for common monthly fees:

Why should foreign companies outsource payroll accounting services?

Internal payroll management can be overwhelming due to:

• Complex labour regulations and frequent updates to tax and insurance laws.
• Strict compliance reporting requirements.
• Language barriers for foreign investors.

By leveraging payroll in Vietnam for foreign companies, investors ensure they remain compliant while reducing administrative burdens.

Frequently Asked Questions (FAQ) about payroll services in Vietnam

How often do FDI companies in Vietnam pay their employees?

Most FDI companies pay salaries on a monthly basis, although other arrangements may be stipulated in the labour contract.

Are FDI enterprises responsible for filing Personal Income Tax for employees?

Yes. The company must withhold PIT from salaries and remit it to the tax authorities.

Is the company responsible for paying mandatory insurance for employees?

Yes. Both the company and the employee must contribute to mandatory insurance funds at the rates prescribed by labour and insurance laws.

Can FDI companies outsource their payroll?

Yes. Many companies, particularly FDI enterprises, use payroll outsourcing in Vietnam to ensure full compliance with local regulations.

Payroll services in Vietnam for FDI enterprises – Viet An Law Firm

Many FDI companies and representative offices choose to outsource their payroll for FDI companies in Vietnam to simplify human resource management. Viet An Law and Viet An Tax provide comprehensive payroll services in Vietnam for over 200 FDI companies from the US, Japan, South Korea, Singapore, and the EU. Our services include:

• Monthly salary calculation and payroll processing
• Calculation and declaration of Personal Income Tax
• Registration and payment of social insurance
• Preparation of payroll, tax, and investment reports
• Providing payslips to employees
• Annual Personal Income Tax finalisation

Contact Viet An Law for professional consultation on Payroll Services in Vietnam (2026 Guide for Foreign Companies), payroll auditing, and support for tax and insurance compliance within 24 hours via: +84 961 67 55 66 (WhatsApp, Zalo, Viber).