A 13th month salary in Vietnam is not required by law. The Labour Code treats a bonus as something the employer decides on the basis of business results and each employee's performance, under a bonus policy the employer itself sets (Article 104). It becomes an enforceable obligation only when the employer has promised it: in the employment contract, a collective bargaining agreement, a published bonus policy, or an offer letter that the contract incorporates.
That distinction matters more for foreign-invested companies than for local ones. Some group templates from Japan, Korea, Singapore or Europe write a "guaranteed 13th month" into the contract, and the first loss-making year then turns a discretionary Tet bonus into a fixed debt. This guide walks HR and finance teams through the four sets of rules a Tet bonus touches: labour, social insurance, personal income tax (PIT) and corporate income tax (CIT). Lunar New Year 2027 falls on Saturday 6 February 2027; the Tet holiday 2027 options for companies are at the end.
The 13th month salary in Vietnam across four sets of rules#
| Area | Question | Short answer | Basis |
|---|---|---|---|
| Labour | Must we pay it? | No, unless the contract, a collective agreement or a published bonus policy promises it | Article 104, Labour Code |
| Labour | What does a bonus policy need? | Employer decides it, consults the grassroots employee representative body where one exists, and publishes it before applying it | Article 104(2); Article 23(1)(a) and (c), Decree 283/2026 |
| Social insurance | Is it part of the contribution base? | No, if it is a performance-based bonus rather than a fixed sum paid every pay period | Article 31(1)(b), Law 41/2024; Article 7(1), Decree 158/2025 |
| PIT | Is it taxable? | Yes, in cash or in kind; it falls in the tax year of the payment date | Article 8(2)(i) and Article 46(3), Decree 253/2026 |
| CIT | Is it deductible? | Yes, if the conditions and amount are set in the contract, collective agreement, financial regulations or bonus policy and it is actually paid with records | Article 10(8)(a) and (b), Decree 320/2025 |
Is the 13th month salary mandatory in Vietnam?#
No. Article 104(1) of the Labour Code defines a bonus as money, property or another benefit the employer gives "based on business results and the employee's degree of work completion". There is no statutory minimum, no rule that a bonus be paid at Tet, and no fine for not paying one. Unlike some jurisdictions in the region, there is no statutory 13th month salary in Vietnam. So is the 13th month salary mandatory for your company? That depends on what your own documents say.
A bonus is legally separate from salary. Salary is what the employer pays "as agreed to perform the work": the job or title rate, salary allowances and other agreed supplements (Article 90(1)). Circular 10/2020/TT-BLDTBXH asks employers to list bonuses under Article 104 as a separate item in the employment contract, apart from salary (Article 3(5)(c)).
The Tet bonus becomes a duty when the employer has bound itself:
- The employment contract states the bonus with an amount or formula.
- A collective bargaining agreement contains a Tet bonus clause.
- A published bonus policy sets conditions and amounts, and the employee meets them.
- An offer letter or secondment letter from the group promises a "guaranteed 13th month". In our reading, once the Vietnamese employment contract repeats or refers to it, it is an agreed term.
How the wording of a "13th month" changes the outcome#
"13th month salary" is not a Labour Code term. The consequences follow from how the company drafts it:
| Drafting | Our reading | Consequence |
|---|---|---|
| "Year-end bonus at the company's discretion, based on results and individual appraisal, under the bonus policy" | Bonus under Article 104 | Company sets the amount each year; outside the social insurance base |
| "13th month salary equal to one month's salary, paid in December", with no conditions | Agreed payment that does not depend on results | Non-payment is a breach of contract and may be treated as failing to pay agreed salary (Article 23(2), Decree 283/2026) |
| One-twelfth of the 13th month added to each monthly payslip as a fixed sum | Agreed supplement with a fixed amount paid every pay period | Part of the social insurance base (Article 7(1)(c), Decree 158/2025) |
For the second row, Article 23(2) of Decree 283/2026/ND-CP fines failing to pay, or underpaying, "salary as agreed in the employment contract" from VND 5-10 million (1 to 10 employees affected) up to VND 40-50 million (301 or more). Those are the amounts for individuals; a company pays double (Article 7(1) and (2)(b)), and must pay the arrears with interest (Article 23(5)(a)). The decree does not say whether a fixed 13th month counts as "salary" for this purpose. We treat it as a real risk, not a settled answer.
Cutting a promised bonus#
A contractual bonus cannot be dropped unilaterally. The party wanting a change must give at least three working days' notice; if both agree, they sign an annex or a new contract; if not, the existing contract continues (Article 33, Labour Code). A bonus policy can be amended by repeating the adoption steps below. In our reading, a revised policy should apply only to a bonus period that has not started, not cut a bonus already being earned in the current year.
For new hires, draft the bonus as discretionary and refer to the policy. For existing staff on "guaranteed" wording, a change needs individual consent.
Bonus policy in Vietnam: consultation, publication and fines#
Article 104(2) lets the employer decide the bonus policy, with two conditions: consult the grassroots employee representative body (only where one exists, typically a grassroots trade union) and publish the policy at the workplace. Nothing is registered or approved by an authority.
Where a grassroots representative body exists, adopting a bonus policy is one of the events that require workplace dialogue (Article 63(2)(c), Labour Code); without one, there is no mandatory consultation step. Article 41(1) of Decree 145/2020/ND-CP sets the steps: send the draft in writing to the employee-side dialogue representatives; they collect employees' views and reply in writing; the employer holds a dialogue meeting with signed minutes; within three working days the employer posts the main points at the workplace. The consultation is advisory; the employer still decides. The policy must also be disclosed to employees as a regulation affecting their rights (Article 43(1)(b)).
Fines under Article 23 of Decree 283/2026, in force since 10 September 2026:
| Breach | Amount in Article 23 (individual) | Company (double) | Basis |
|---|---|---|---|
| Not publishing the bonus policy at the workplace before applying it | VND 5-10 million | VND 10-20 million | Article 23(1)(a) |
| Not consulting the employee representative body on the bonus policy, where one exists | VND 5-10 million | VND 10-20 million | Article 23(1)(c) |
The bonus policy usually sits next to the salary scale and the internal labour rules; see our guides on the salary scale in Vietnam and internal labour rules. A workable Tet bonus policy answers: who is eligible (contract staff, probationers, secondees); the conditions (minimum service, appraisal grade, no discipline); how the pool is set; the individual formula and pro-rating; whether leavers before the payment date qualify; when and how it is paid; and who can change the policy.
Leavers. The law only requires settling "amounts related to each party's rights" within 14 working days after termination (Article 48(1), Labour Code). If the policy says "employed on the payment date", a leaver has no claim. If it is silent and the bonus rewards a full year's results, disputes are likely; in our reading the employee then has an arguable claim to a pro-rated share. See terminating an employment contract in Vietnam. An Article 104 bonus is also outside the salary used for severance, which is the average contractual salary of the last six months (Article 46(3)); a fixed contractual 13th month is less clear.
How the 13th month salary in Vietnam is taxed#
The Tet bonus, like any 13th month salary in Vietnam, is employment income. The Law on Personal Income Tax 109/2025/QH15 includes "benefits in cash or in kind in any form" (Article 3(2)(b)), and Decree 253/2026/ND-CP lists "bonuses in cash or in kind, including bonuses in securities" as taxable (Article 8(2)(i)). Only state honours, awards recognised by the state, state-recognised invention and technical improvement awards, and rewards for reporting violations to authorities are excluded (Article 8(4)(a)). A company's Tet bonus is none of these.
December 2026 or January 2027: which tax year?#
Employment income is recognised when it is paid or received (Article 8(3) of the Law; Article 46(3) of Decree 253). What the bonus is "for" does not matter:
- Paid on or before 31 December 2026: tax year 2026, settled in the 2026 personal income tax finalization (due 31 March 2027 for the employer's filing, 30 April 2027 for employees who file themselves).
- Paid in January or early February 2027, before Tet: tax year 2027.
The new five-band scale and the family deductions of VND 15.5 million a month for the taxpayer and VND 6.2 million for each dependant already apply to the whole of 2026 (Article 9, Article 10(1) and Article 29(2) of the Law), so the timing does not change the rates. It only decides which year's annual calculation picks up the bonus.
Monthly withholding in the bonus month#
For employees on contracts of three months or more, the employer withholds on the month's taxable income using the progressive scale (Article 50(1) and (2), Decree 253). The bonus is added to that month's pay, so the month usually jumps a band. The monthly scale (Article 9 of the Law): up to VND 10 million 5%; over 10 to 30 million 10%; over 30 to 60 million 20%; over 60 to 100 million 30%; over 100 million 35%.
Hypothetical example, in VND million. Minh earns taxable salary of 25 a month, pays compulsory insurance of 10.5% (2.625), has one dependant and no exempt income. The company pays a one-month Tet bonus of 25 with the January 2027 salary.
| Normal month | January 2027 with bonus | |
|---|---|---|
| Taxable income | 25 | 50 |
| Less employee insurance | 2.625 | 2.625 |
| Less family deductions (self + 1 dependant) | 21.7 | 21.7 |
| Assessable income | 0.675 | 25.675 |
| Tax withheld | 0.034 (5%) | 2.068 (10% x 25.675 - 0.5) |
Withholding for 2027 (eleven normal months plus the bonus month) totals about 2.44. On an annual basis, income of 325 less insurance of 31.5 and deductions of 260.4 (186 + 6.2 x 12) leaves 33.1, taxed at 5%: 1.655. Minh has overpaid about 0.78, which comes back through the annual finalization. Monthly withholding tends to overshoot for mid-range earners because the bonus month is taxed as if the whole year sat in that band.
Gifts in kind, leavers, short contracts and non-residents#
- Tet gifts in kind. Decree 253 taxes "other benefits the employer provides, including spending on holidays and festivals" (Article 8(2)(k)). Hampers and vouchers are valued at the normal market price of the goods or services at the time the income arises (Article 17(2)). The decree expressly excludes only shared leisure, entertainment and health services not issued in anyone's name (Article 8(2)(d)); it is silent on a year-end party or other shared spending that cannot be attributed to one person. In our reading, such shared spending is close to that exclusion and stays out of individual income, while a hamper handed to each employee has an identifiable recipient and is taxable.
- Leavers. A bonus paid to someone whose contract has ended is withheld at 10% if the payment is VND 5 million or more (Article 50(2), which expressly covers payments to former employees).
- No contract, contracts under three months, freelancers. Also 10% from VND 5 million per payment; below that only on request; a person whose only income is of this kind and who expects no annual tax liability after family deductions can give a commitment to defer withholding (Article 50(2)). A former employee already earning a salary elsewhere does not qualify for that commitment. In our reading, a probationer on a separate probation contract falls under this rule rather than the progressive scale.
- Non-resident foreigners. A flat 20% on the gross employment income for work performed in Vietnam, wherever it is paid, with no deductions (Article 21 of the Law). Tax-resident expatriates are taxed like Vietnamese staff; see personal income tax for foreigners in Vietnam. For net-of-tax packages, the bonus has to be grossed up through the same conversion as monthly salary.
Is the 13th month salary in Vietnam subject to social insurance?#
Not if it is a genuine Article 104 bonus. For employees whose pay the employer sets, the contribution base is monthly salary: the job rate, salary allowances and "other supplements agreed to be paid regularly and stably in each pay period" (Article 31(1)(b), Law on Social Insurance 41/2024/QH15). Decree 158/2025/ND-CP narrows this to supplements with a fixed amount stated alongside the salary in the contract and paid regularly each pay period, excluding anything that depends on productivity, work progress or performance (Article 7(1)(c)).
Two drafting traps:
- A 13th month split into twelve fixed monthly instalments meets every element of that definition, so in our reading it is contributable. Some companies do this to smooth employees' tax; they end up paying social insurance on it.
- A fixed 13th month paid once a year is not paid "in each pay period", so in our reading it stays outside the base even though it is guaranteed.
The familiar exclusion list ("other benefits such as bonuses under Article 104, innovation bonuses, meal allowances...") came from Circular 59/2015/TT-BLDTBXH as amended by Circular 06/2021/TT-BLDTBXH. Both ceased to have effect on 1 July 2025 (Article 20(2), Circular 12/2025/TT-BNV), and Circular 12/2025/TT-BNV does not replace the list. Many guides still quote it; the conclusion above follows from the general test in Article 7(1) of Decree 158. The 2% trade union fee is calculated on the social insurance salary fund, so a bonus outside that base does not increase it either. For expatriate staff in the scheme, see social insurance for foreign employees.
When is the 13th month salary in Vietnam deductible for CIT?#
Decree 320/2025/ND-CP sets three filters:
- Documented in advance. Salary and bonuses whose conditions and amounts are not stated in one of the employment contract (or, for intra-group transferees, the foreign company's secondment letter), the collective agreement, the company's financial regulations, or a bonus policy issued by the chair, general director or director under the financial regulations, are not deductible (Article 10(8)(b)). A bonus approved by email does not meet this.
- Actually paid, with records. Amounts booked but not paid, or paid without records, are disallowed (Article 10(8)(a); Article 9(2)(h) of Law 67/2025/QH15).
- Non-cash payment. Article 9(1)(c) of Decree 320 requires non-cash payment records for "purchases of goods and services and other payments" of VND 5 million or more each time. Whether "other payments" covers salary and bonuses is not spelled out. Paying through the bank avoids the question.
2026 bonus paid in January or February 2027. Decree 320 disallows "salary, wages and allowances" still unpaid by the deadline for the annual CIT finalization, unless the company has set up a salary reserve of up to 17% of the salary fund without creating a loss (Article 10(8)(c)). The salary fund for the year likewise counts what is actually paid by that deadline (Article 10(4)(d2)). For a calendar financial year the deadline is 31 March 2027 (Article 10(5)(a), Decree 252/2026/ND-CP). The clause does not mention bonuses. Our reading is that a bonus earned in 2026, decided under a policy in place in 2026 and paid before 31 March 2027 is deductible in 2026 on the same logic; payment after that date is safer claimed in the year of payment. Confirm this with your tax adviser before filing. The full CIT calculation is in how to calculate corporate income tax in Vietnam.
Tet gifts and travel support are welfare, which is capped. Direct welfare spending is deductible only up to one month's average actual salary for the year, and the list includes "support for travel costs on holidays and Tet" and "other welfare spending" (Article 10(4)(d)). One month's average salary is the year's salary fund divided by 12 (Article 10(4)(d1)). In our reading, hampers sit inside this cap together with company trips, wedding and funeral support and medical support, while a cash bonus paid under the bonus policy is a bonus, not welfare. Example: with a 2026 salary fund of VND 6 billion, the cap is VND 500 million; welfare spending of VND 620 million leaves VND 120 million non-deductible.
Tet holiday 2027 in Vietnam and bonus timing#
Employees get five paid days off for the Lunar New Year; foreign employees also get one day for their own country's traditional new year and one for its national day (Article 112(1)(b) and (2), Labour Code). According to official reports on Notice 11483/TB-BNV of 9 October 2026 from the Ministry of Home Affairs:
- Civil servants are off for seven days, from Thursday 4 February to Wednesday 10 February 2027.
- Companies choose one of three options: one day before Lunar New Year's Day and four after; two before and three after; or three before and two after. They are encouraged to follow the civil service calendar, provided employees receive their full statutory entitlements.
- The chosen option must be announced to employees at least 30 days in advance, which in practice means early January 2027.
No law fixes when a Tet bonus is paid. Paying before the break avoids complaints, and choosing December or January also decides which PIT year the bonus belongs to.
Checklist for the 13th month salary in Vietnam before Tet 2027#
- Read the bonus clause in every contract template and offer letter; replace "guaranteed" wording for new hires with a discretionary bonus tied to the policy.
- Make sure a written bonus policy exists, was consulted on where a grassroots union exists, and was published, with the dates on file.
- Cover pro-rating for joiners and the position of leavers before the payment date.
- Decide the payment date, knowing it fixes the PIT year.
- Withhold on gifts in kind and on payments to former employees.
- Do not convert the bonus into fixed monthly instalments unless you accept social insurance on it.
- Pay through the bank, and make sure any 2026 bonus is paid before 31 March 2027 or covered by a salary reserve.
