The trade union fee in Vietnam is 2% of the payroll used as the social insurance contribution base, owed by every company with staff on compulsory social insurance (Article 29(1)(b) of the Law on Trade Unions No. 50/2024/QH15, as amended by Law 97/2025/QH15). The money comes from the company's own funds and is booked as an operating expense (Article 5(3) of Decree 105/2026/ND-CP); nothing is withheld from employees for it. It is paid monthly, at the same time as social insurance, by the last day of the following month.
Foreign-invested companies are not exempt from the trade union fee in Vietnam, and in our reading a company owes the fee even if its employees have never formed a union. No provision says so in those words; the conclusion follows from how the Law and Decree 105 define who pays. Two texts changed in 2026: Decree 105 (in force 16 May 2026) replaced Decree 191/2013/ND-CP on union finance, and Decree 283/2026/ND-CP (in force 10 September 2026) replaced Decree 12/2022/ND-CP on penalties. This guide to the trade union fee Vietnam employers pay reflects the law in force on 16 October 2026.
How the trade union fee differs from union dues#
Head-office payroll teams often confuse two separate items. Article 29(1) of the Law lists them separately:
| Trade union fee (kinh phi cong doan) | Union dues (doan phi) | |
|---|---|---|
| Who pays | The employer | Employees who are union members |
| Rate | 2% of the social insurance payroll | Set by the Vietnam General Confederation of Labour (VGCL) |
| Paid from | Company funds, deductible expense | The member's salary |
| Needs a union at the company? | No, in our reading | Only members pay |
| Penalty for non-payment | Article 42 of Decree 283/2026 | None in Decree 283/2026 |
Union dues are set under the VGCL charter, not by statute. Secondary sources citing VGCL Decision 61/QD-TLD put them at 0.5% from 1 July 2025, down from 1%; we have not seen the original. If the company collects dues through payroll, note that Article 102(1) of the Labour Code only allows salary deductions to compensate damage to the employer's property. The cautious course is to deduct dues only with each member's written consent.
Who pays the trade union fee in Vietnam, even without a union?#
Article 29(1)(b) of the Law and Article 2(1) of Decree 105 name the payers: enterprises, public service units not fully funded by the state budget, cooperatives and other agencies, organisations and units employing workers. There is no headcount threshold, no SME relief and no carve-out by ownership. Article 25(9) makes paying the fee a duty of every employer, and Article 10(5) lists non-payment, late payment and underpayment among prohibited acts.
Why we read the duty as applying where there is no grassroots union:
- Article 29(1)(b) defines payers by type of entity and sets the base as the social insurance payroll. It contains no "where a union exists" condition.
- Article 4(1)(a) of Decree 105 puts "enterprises" in general in the monthly payment group, and Article 17(1)(a) requires them to pay in full and on time.
- Article 15(1) refers to enterprises where an employee organisation registered under Article 172 of the Labour Code (not a VGCL union) "performs the obligation to pay the trade union fee" as a condition for that organisation to receive a share of the money. The Decree therefore assumes the duty exists where the employee body is not a VGCL union.
- Article 31(2)(d) of the Law spends union funds on "establishing grassroots trade unions". This is only a supporting point, but it fits a system that collects from workplaces without a union.
The obligation starts in the first month the company has staff on compulsory social insurance, mainly employees on labour contracts of one month or more (Article 2(1)(a) of Law 41/2024/QH15 on Social Insurance). Decree 105 sets no separate registration step; collection follows the VGCL's internal allocation (Article 17). When registering for social insurance, ask the provincial Labour Federation which union body collects and to which account.
Two edge cases remain open. Unpaid company managers are now on compulsory social insurance with a self-selected base (Article 2(1)(n) and Article 31(1)(d) of Law 41/2024); whether they count towards the payroll "for employees" is not addressed. Household businesses are not named in Article 29(1)(b), although one that hires staff under labour contracts is an employer on compulsory social insurance (Article 2(3) of Law 41/2024), and Decree 283 fines them as individuals (Article 7(3)). We do not treat household businesses as clearly liable; one with staff on social insurance should ask the provincial Labour Federation in writing.
How much: the 2% trade union contribution, its base and its cap#
The 2% trade union contribution is calculated on the sum of each employee's social insurance salary, not on total payroll cost. For a private employer that base is the monthly salary: the rate for the job or title, salary allowances and other supplements agreed to be paid regularly and stably each pay period (Article 31(1)(b) of Law 41/2024). The salary bands in your salary scale and contracts therefore drive the amount directly.
Each person's base is capped at 20 times the reference level (Article 31(1)(dd)). While the statutory base salary exists, the reference level equals it (Article 141(13)). From 1 July 2026 the base salary is VND 2,530,000 (Article 3(2) of Decree 161/2026/ND-CP). On that figure the cap is VND 50,600,000, so the fee for one highly paid employee is at most about VND 1,012,000 a month. This is our derived figure and moves with the reference level.
Worked example (hypothetical). A company has eight staff on VND 12,000,000, a manager on VND 40,000,000 and a general director on VND 80,000,000, all on compulsory social insurance. The director's base is capped at VND 50,600,000, so the payroll base is 96,000,000 + 40,000,000 + 50,600,000 = VND 186,600,000. The October 2026 fee is VND 3,732,000, due by 30 November 2026. Without the cap the company would pay VND 4,320,000, overpaying VND 588,000 a month.
Trade union fee for foreign employees and union membership#
Whether the trade union fee for foreign employees is owed has no official answer yet. Our reading:
- Foreign nationals on fixed-term labour contracts of 12 months or more are on compulsory social insurance (Article 2(2) of Law 41/2024). Article 29 of the Law on Trade Unions does not distinguish by nationality, so their social insurance salary can be part of the 2% base.
- The phrase "employing Vietnamese workers" in Article 4(1)(a) of Decree 105 sits only in the paragraph on foreign agencies and organisations and operating offices of foreign parties to business cooperation contracts. The paragraph on enterprises stands alone and has no such qualifier.
- Intra-company transferees, people already at retirement age when the contract is signed and those on contracts under 12 months are outside compulsory social insurance (Article 2(2)), so they have no social insurance salary to count.
If you employ many expatriates, ask the collecting union body to confirm the position in writing. For who is covered by social insurance in the first place, see social insurance for foreigners in Vietnam.
Membership is a separate point and is often misstated. A foreign employee on a labour contract of 12 months or more may join and take part in a grassroots union (Article 5(2) of the Law on Trade Unions). What they cannot do is serve as a union officer, because Article 4(5) defines union officers as Vietnamese citizens. Requiring anyone to join, not join or leave a union as a condition of hiring or renewal is prohibited discrimination (Article 10(2)(a)), so group-wide labour relations policies should be checked against it.
Representative offices of foreign traders are not named in Decree 105. The closest group in Article 4(1)(a) is foreign agencies and organisations whose activities relate to trade unions, and operating offices of foreign BCC parties employing Vietnamese staff. A representative office with Vietnamese staff on social insurance should ask the provincial Labour Federation in writing.
When and where to pay#
Most companies pay the fee monthly, at the same time as compulsory social insurance, by the last day of the following month (Article 4(1)(a) and 4(2)(a) of Decree 105). Agricultural, forestry, fishery and salt businesses paying wages by production cycle may register with the union body to pay monthly or once every three months, by the last day of the month after each cycle (Article 4(1)(b) and 4(2)(b)).
Payment goes to the union body designated under the VGCL's collection rules (Article 17(1)(a); Article 31(4) of the Law). The share earmarked for grassroots level is then redistributed inside the union system to the company's union or registered employee organisation (Article 15). That is union money, not a refund to the employer. Keep monthly bank transfer records that reconcile to the social insurance list for the same month, since the union or authorities may ask for them (Article 17(1)(b)).
Exemption, reduction and suspension of the trade union fee in Vietnam#
Article 30 of the Law and Articles 11 to 13 of Decree 105 set three forms of relief. None is a size-based concession, and each is discretionary ("may be considered").
| Relief | When it may be considered | Extent |
|---|---|---|
| Exemption (Art. 11) | Dissolution, where the union takes part in the debt settlement plan that includes the unpaid fee; bankruptcy, where the union files the petition | Unpaid amounts are waived |
| Suspension (Art. 13) | Hardship from restructuring, technology change, economic crisis or downturn, state economic restructuring policy, natural disaster, fire, epidemic or crop failure, plus one of: a halt of 30 days or more with no work available, leaving at least 50% of the pre-halt workforce temporarily off work with their pension and survivorship contributions suspended; or loss of over 50% of total asset value (land excluded) from natural disaster, fire, epidemic or crop failure | Up to 12 months, then back-payment |
| Reduction (Art. 12) | Suspension has ended and layoffs continue: 30% or 30 workers (under 200 staff), 50 workers (200 to 1,000), 100 workers (over 1,000) | Up to 20% off, for up to 6 months |
A 20% reduction still leaves the company paying at least 1.6% of the base; in the example above, VND 2,985,600 a month. Suspension does not cancel the debt: the suspended months are paid back in full by the last day of the month after suspension ends (Article 30(3) of the Law). Business suspension at the business registry does not suspend the fee; a separate application is needed. Companies being wound up through company dissolution should include the unpaid fee in the debt settlement plan and involve the union, since that is the condition for an exemption.
Applications use the forms in Appendix II (suspension) or Appendix I (reduction) of Decree 105, with a workforce report and the relevant staff list or loss report. The VGCL or provincial Labour Federation answers within 15 working days, taking account of the union system's own finances. Approved suspension or reduction does not count as late payment (Article 6(3)).
What happens if the fee is paid late or not at all?#
Decree 105 defines late payment as not paying, or paying short, after the deadline (Article 6(1)). Non-payment means not paying at all, or underpaying the amount or headcount for more than 60 days after the deadline (Article 6(2)).
Article 42 of Decree 283 states fines at the individual level. Companies, including branches and representative offices of foreign enterprises, pay double (Article 7(1) and 7(2)(b)). The right-hand column is our calculation on that rule.
| Breach | Article 42 rate | For a company |
|---|---|---|
| Late payment; not paying; underpaying amount or headcount beyond 60 days (clause 1) | 12% to under 15% of the total due when the violation record is made, max VND 75 million | 24% to under 30%, max VND 150 million |
| Not paying for the entire workforce (clause 2) | 18% to 20%, max VND 75 million | 36% to 40%, max VND 150 million |
The 18% to 20% band applies only where nothing is paid for the whole workforce; partial underpayment, even beyond 60 days, falls under clause 1. The line between clause 1(b) ("not paying") and clause 2 has no guidance, so a company that has never paid anything is exposed to clause 2.
Within 30 days of the penalty decision the company must also pay the arrears plus interest at the highest non-term deposit rate published by state-owned commercial banks at the time of the penalty (Article 42(4)(a)). Take the company in the worked example: six unpaid months come to VND 22,392,000 at the time of the violation record. Under clause 1 its fine would be VND 5,374,080 to under VND 6,717,600; if treated as not paying for the whole workforce (clause 2), VND 8,061,120 to VND 8,956,800. The arrears and interest are payable on top. Repeated clause 1 breaches at different times, not yet penalised and within the limitation period, are fined as one breach with an aggravating factor (Article 7(4)). The limitation period for labour violations is one year (Article 3(4)(a)). That limits the fine, not the debt: we found nothing in the Law or Decree 105 that extinguishes the payment obligation when the limitation period ends. For arrears that arose before 10 September 2026, a breach that ended before that date is dealt with under the decree in force when it was committed, while a breach still continuing is dealt with under Decree 283 (Article 67(1) and (2)). Whether old unpaid amounts count as a continuing breach is determined under the rule referred to in Article 3(5) of Decree 283.
Accounting and corporate income tax treatment#
The trade union fee is booked as a production and business expense of the period (Article 5(3) of Decree 105). For corporate income tax it is deductible if it meets the general conditions in Article 9(1) of Law 67/2025/QH15: actually incurred, related to the business and supported by non-cash payment records as required. Article 9(2)(l) excludes only levies "not allowed as expenses by law", and Decree 105 expressly allows this one.
Administrative fines are not deductible (Article 9(2)(b)). Interest paid under Article 42(4)(a) of Decree 283 has no specific guidance; the conservative course is to treat it as non-deductible until the tax authority confirms otherwise. For the wider deductibility rules, see how to calculate corporate income tax in Vietnam.
Once employees set up a grassroots union#
Beyond the 2%, the company must provide workspace and facilities for the union (Article 27(1) of the Law). Part-time union officers get 24 paid working hours a month (chair and vice chair) or 12 (executive committee members, group leaders and deputies) for union work, and paid leave for meetings and training called by the higher-level union that does not count against those hours (Article 27(2) and (3)). Their contracts expiring mid-term are extended to the end of the term. Dismissing, terminating or reassigning them needs the written agreement of the next-level union; failing agreement, the company reports to the competent authority and may decide only after 30 days (Article 28). Failing to provide the workspace, hours or paid leave is fined VND 3 to 5 million, or VND 6 to 10 million for a company (Article 39(1) of Decree 283).
To check how the trade union fee in Vietnam applies to your expatriate staff, clear historic arrears or prepare a suspension application, LexData's employment law advice for companies in Vietnam works to an agreed scope. This article is general information and does not replace advice on a specific case.
