Jul 17, 2025

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Finding a Payroll Agency: When is the Golden Time to Optimize Salary Management in Vietnam?

Effective salary management is not only a key factor in attracting and retaining talent but also ensures legal compliance, optimizes costs, and enhances competitive advantage. However, many businesses, especially SMEs or those lacking expertise in labor law, often encounter numerous difficulties in building and operating their compensation systems. So, when is the right time to seek a professional payroll agency?

Let’s analyze common scenarios and the core issues businesses often face with NetViet HRS.

Table of Contents

Case Study 1: Company A – Starting with Net Salary Challenges

Company A, a small business, completed its recruitment process and successfully negotiated “net salary” amounts with its employees. After signing labor contracts, Company A began searching for a payroll agency to handle monthly payments.

In this case, the payroll agency would work based on the salary figures already agreed upon with the employees. While this might seem straightforward, it carries significant legal and financial risks if not executed systematically from the outset. “Net salary” often leads to ambiguity regarding employee and employer contributions, complicating the determination of total payroll costs and compliance with regulations on social insurance (SI) and personal income tax (PIT).

Case Study 2: Company B – Consequences of Ignoring Legal Compliance

Company B regularly paid salaries and submitted SI and PIT contributions monthly. However, due to non-compliance with legal regulations concerning payroll records and documentation, Company B was audited by state authorities and found to have many errors. To rectify this, Company B sought a payroll agency to complete its documentation for previous years.

Company B’s case is a prime example of the importance of building a legally compliant payroll management system from the beginning. Deficiencies in processes and documentation can lead not only to administrative penalties but also severely damage the company’s reputation and employee engagement.

Core Issues Businesses Often Encounter in Payroll

Negotiating “Net Salary” Without Clear Contribution Breakdown

Many companies negotiate a “net salary” with employees, meaning the amount they actually receive after deductions. However, this often leads to a lack of transparency:

Unclear Responsibilities: It fails to clearly distinguish between contributions that are the employee’s responsibility (e.g., a portion of SI, all PIT) and those that are the employer’s responsibility (e.g., a portion of SI, health insurance, unemployment insurance, trade union fees).
Financial Burden on the Business: If not clearly defined, the business might bear all costs, while employees lack the motivation to provide necessary documents (e.g., dependent records to optimize PIT).
Legal Risks: Lack of transparency can expose the business to labor disputes or penalties from regulatory bodies for non-compliance with mandatory deduction and submission rules.

Inability to Calculate Total Payroll Costs from the Outset

One of the most pressing issues for businesses is the inability to determine the true total cost per employee. As one client shared: “I hardly make any profit on my projects because I don’t know how much an employee costs.”

This occurs when a company lacks a detailed payroll structure with all categories: basic salary, allowances, benefits, projected SI, health insurance, unemployment insurance, trade union fees, and PIT. The absence of a projected payroll budget before recruitment means businesses cannot control their finances, leading to unexpected costs and directly impacting project profitability or overall business operations. A transparent payroll structure from the beginning also helps employees feel more secure and committed to the company.

Difficulties with Any Legal or Company Policy Adjustments

Labor laws and salary-related policies in Vietnam are frequently updated, such as adjustments to regional minimum wages, new social insurance regulations, or the company’s annual salary review policies.

Without an initial plan, a clear salary structure, and a flexible management system, businesses will face significant difficulties in making adjustments and ensuring compliance. This not only creates “headaches” for management but also carries the potential for legal violations and reputational damage.

Penalties Due to Non-Compliance

The absence of standardized internal policies and regulations, particularly the failure to register a salary scale with regulatory bodies, prevents businesses from fully complying with labor laws.

The consequence of non-compliance is administrative penalties, which not only directly impact the budget but also harm the company’s reputation. Furthermore, a lack of a transparent and fair compensation system can lead to employee dissatisfaction, disengagement, talent drain, and negatively affect productivity.

When is the Most Suitable Time to Engage a Payroll Agency?

Based on the above analysis, NetViet HRS recommends that businesses proactively seek a professional payroll agency at the following crucial times:

When you begin planning your company’s payroll fund: This is the ideal time to build a solid foundation. A payroll agency will help you establish your salary structure, allowances, benefit policies, and project total human resource costs from the start, ensuring legal compliance and economic efficiency.
Before recruiting your first employee: Even for a new business or when scaling up, support from a payroll agency will help you build a salary scale appropriate for the market, ensure compliance with labor contract, SI, and PIT regulations, and avoid mistakes from the very beginning.
When the business wants to restructure its compensation system or faces legal changes: To ensure up-to-date practices and cost optimization, businesses should consult experts when there are major policy changes or when they wish to enhance the effectiveness of their salary management.
When there are signs of compliance risks or issues related to labor disputes: If the business identifies shortcomings in record-keeping, documentation, or faces the risk of audits, engaging a payroll agency for review and completion is absolutely essential.

A standardized, well-structured payroll system from the outset not only allows businesses to operate with peace of mind but also builds strong trust with employees. Don’t let salary management issues hinder your business’s growth.

Are you facing challenges in payroll management? Contact NetViet HRS for expert and effective consultation!

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