Does Probation Count for Severance Pay in Vietnam?

Oct 06, 2026

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Does Probation Count for Severance Pay in Vietnam?

When an employee leaves a company, HR teams often need to determine whether a statutory termination payment is due and which periods of service should be included in the calculation. A common situation arises when an employee first joins under a probation contract, then continues working under fixed-term or indefinite-term employment contracts. In this case, employers often ask: should the probation period be counted when calculating severance pay in Vietnam?

In general, the answer is yes. A probation period may be included if it was an actual working period for the employer and was not covered by unemployment insurance.

Table of Contents

When is a statutory termination payment required?

Under Article 46 of the 2019 Labor Code of Vietnam, when an employment contract ends in certain statutory cases, the employer must make a termination payment to an employee who has worked regularly for the employer for at least 12 months.

The statutory rate is: One-half month’s salary for each year of service.

However, not every period of employment is automatically included. Employers must identify the eligible service period based on labor and unemployment insurance rules.

How to determine the eligible service period

For calculation purposes, the eligible service period is determined as follows:

Total actual working period with the employer minus (-) the period during which the employee participated in unemployment insurance and any period for which severance or job-loss allowance has already been paid.

In practical terms, this benefit generally applies to periods where the employee actually worked for the company but did not participate in unemployment insurance and has not previously received a corresponding statutory allowance.

Is probation included?

Under the 2013 Employment Law, employees working under a probation contract are not subject to unemployment insurance.

At the same time, the Labor Code provides that the service period for statutory termination benefits is based on the employee’s actual working time for the employer, after deducting the time covered by unemployment insurance and any period already compensated.

As a result, the probation period is generally counted when determining the payable service period, provided that:

The employee actually worked for the company during probation;
The period was not covered by unemployment insurance;
The same period has not been paid as severance or job-loss allowance before.

What if probation salary already included insurance-related amounts?

Some companies state in the probation contract that the probation salary includes amounts equivalent to social insurance, health insurance, unemployment insurance, or other statutory contributions.

Employers should distinguish between:

A contractual salary arrangement; and
Actual participation in unemployment insurance under the law.

For a standalone probation contract, the employee is not subject to unemployment insurance. Therefore, even if the probation salary is agreed to include insurance-related amounts, that period is generally not treated as an unemployment-insurance-covered period.

Accordingly, if the general conditions are met, it may still be included in the calculation of the statutory termination benefit.

Practical case

Assume an employee starts probation on 1 February 2020 for 60 days, then continues working under fixed-term and indefinite-term contracts, and resigns on 1 January 2026.

When processing the resignation, the employer should review:

The employee’s total actual working period;
The period covered by unemployment insurance;
The probation period not covered by unemployment insurance;
Any previous statutory allowance paid for termination or job loss.

If the only non-insured period is the initial 60-day probation, that period should be considered when determining the payable service time.

HR checklist for employers

Before finalizing payment upon termination, HR and payroll teams should:

Review the employee’s full employment history;
Check probation records and subsequent labor contracts;
Reconcile unemployment insurance participation periods;
Identify any period not covered by unemployment insurance;
Confirm whether any statutory allowance has already been paid;
Keep calculation records and payment documents for future reference.

This review helps employers reduce the risk of underpayment, employee complaints, or labor disputes.

Legal basis

Article 46 of the 2019 Labor Code of Vietnam;
Article 43 of the 2013 Employment Law;
Article 45 of the 2013 Employment Law.

Conclusion

A probation period may be counted when calculating severance pay in Vietnam if the employee actually worked during that time and did not participate in unemployment insurance.

For employers, the key step is to review actual working time, insurance participation records, and any prior statutory allowance payments before finalizing the termination package.

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