13th Month Salary in Vietnam: Market Norm vs. Legal Requirement

Ask a candidate in Ho Chi Minh City about pay and you will often hear "plus the 13th month". The 13th month salary in Vietnam is so common that many foreign employers assume it is mandatory. It is not. But once you promise it in writing, it becomes binding, and it has real tax and budget effects.

With Tết 2027 arriving in early February, this is the time of year when employers in Vietnam settle their bonus plans. This guide explains what the law requires, what the market expects, and how to set a policy you can keep.

What the Labour Code says

Vietnam's Labour Code 2019 does not use the term "13th month salary". It covers bonuses in Article 104:

• A bonus is money, property or another form of reward the employer gives an employee based on business results and the employee's work performance.

• The bonus regulation is decided by the employer and published at the workplace, after consulting the grassroots employee representative organisation where one exists.

So there is no statutory duty to pay a 13th month or a Tết bonus, and no minimum amount. The law leaves it to the employer, linked to results and performance.

When the "optional" bonus becomes binding

The bonus stops being optional when you commit to it. That happens if it is written into:

• the labour contract (for example "13th month salary equal to one month's basic salary"),

• a collective labour agreement, or

• your published bonus regulation or internal policy.

At that point the employee can claim it like any other contractual entitlement. A common dispute: an employee who leaves in November asks for a pro-rated 13th month because the contract said "guaranteed", while the employer thought it was discretionary. Clear wording prevents this. Decide, and write down:

1. Is the amount guaranteed or discretionary?

2. Who is eligible (minimum service, still employed on the payment date, probation staff)?

3. How is it pro-rated for joiners and leavers?

4. When is it paid (before Tết, with December payroll, or in January)?

Social insurance: usually no contributions on the bonus

Under the Social Insurance Law 2024 (Article 31), the contribution base is monthly salary: the salary for the job or title, salary allowances, and other amounts agreed to be paid regularly and stably each pay period. Bonuses under Article 104 of the Labour Code are not part of that base when they are recorded as a separate benefit in the labour contract. The Department of Wages and Social Insurance confirmed this approach in Official Letter 1198/CTL&BHXH-BHXH (5 September 2025).

In practice, this means a properly documented 13th month or Tết bonus does not add the employer's 23.5% (SI, HI, UI and trade union fee) or the employee's 10.5%. If you fold it into the monthly salary instead, for example "salary includes 1/12 of a 13th month", it can become part of the insurance base.

PIT: fully taxable, in the month you pay it

Bonuses are employment income for personal income tax. Tax is withheld in the month the bonus is paid, not the month it is accrued. For the 2026 tax year, residents are taxed on the 5-bracket schedule (5% / 10% / 20% / 30% / 35% at 10 / 30 / 60 / 100 million VND of monthly taxable income) with a personal deduction of 15,500,000 VND per month (Resolution 110/2025/UBTVQH15).

Worked example

An employee in Ho Chi Minh City earns a gross salary of 30,000,000 VND per month, with no dependants. The 13th month equals one month's salary and is paid together with one month's normal salary.

The bonus raises withholding that month by 4,135,000 VND, about 13.8% of the bonus. Because the bonus is not added to the insurance base, insurance stays the same.

The monthly withholding can overshoot. On an annual basis (12 × the monthly brackets), the same bonus adds about 3,000,000 VND of tax. If the employee's year-end PIT finalization is done through the employer, the difference is settled then. Explain this to staff before Tết; a smaller-than-expected net bonus is a frequent source of complaints.

Corporate income tax: keep the paperwork

For the bonus to be a deductible expense, the conditions for receiving it and the amount must be set out in the labour contract, collective labour agreement, financial regulations or bonus regulation, and it must actually be paid with supporting documents (Decree 320/2025/ND-CP, Article 10, as summarised by MISA). A bonus decided verbally, or booked but not paid, is at risk of being disallowed.

What the market expects

The norm is strong. Many Vietnamese employees treat one extra month as part of their total pay, and some employers in tech and finance pay more based on performance. The Ministry of Home Affairs also asks provinces to report on salary and Tết bonuses each year (for Tết 2026, Official Letter 10287/BNV-CTL&BHXH, with data due before 25 December 2025), so the topic gets public attention every winter.

For foreign employers, the practical choice is between:

• Guaranteed 13th month: simple to explain, easy to budget, but binding.

• Discretionary performance bonus: flexible, but you must explain it well at offer stage, or candidates will compare it to a guaranteed offer.

Either is lawful. What causes trouble is promising one and paying the other.

Key takeaways

• The 13th month salary in Vietnam is a market norm, not a legal requirement.

• It becomes binding once written into the contract, a collective agreement or your bonus regulation.

• Publish a bonus regulation after consulting the employee representative organisation, if you have one.

• A bonus recorded separately from salary is generally outside the social insurance base.

• PIT is withheld in the month of payment; annual finalization may refund part of it.

• Keep the documents that make the bonus deductible for CIT.

Planning bonuses with an EOR in Vietnam

When you hire through an EOR in Vietnam, the bonus policy still needs to be your decision, written down clearly. A good provider helps you draft it, runs the PIT and insurance treatment correctly, and shows the numbers on the payslip. When you compare EOR cost between providers, check whether bonus payments and year-end PIT finalization are included in the monthly fee.

At HR4U, our EOR service starts from USD 109 per employee per month, statutory costs are passed through at cost, and contracts are bilingual. We prefer to be honest about what the law requires and what it does not, so you can choose a bonus policy that fits your budget. View EOR in Vietnam or talk to us.

This article is for general information and reflects rules in effect as of October 2026. It is not legal or tax advice.