If you are an employer hiring Vietnamese employees, understanding the social insurance obligations during the probation period is crucial for compliance and payroll management. One common question that many people concern about is: “Are employers required to pay additional salary for mandatory insurances to employees during the probation period?”. Let’s find out in the explanation below!

Probation Under a Separate Probationary Contract

In Vietnam, if an employee is hired under a separate probationary contract (a contract only for the probation period), this type of contract is not subject to mandatory social insurance contributions. Employees working under probationary contracts are exempt from compulsory social, health, and unemployment insurance (1).

• Implication: Since there is no social insurance contribution required from either employer or employee during this probation period, employers are not obligated to pay any additional amount equivalent to social insurance contributions as part of the salary.

This means the probationary salary paid under a probationary contract typically does not include extra compensation for social insurance.

Probation Included Within a Labor Contract

If the probation period is included within a labor contract (i.e., the employee signs a labor contract with probationary terms), the situation changes:

• The employee is subject to mandatory social insurance contributions from the first day of the labor contract, including the probation period.
• Both employer and employee must contribute to social insurance, health insurance, and unemployment insurance according to the prescribed rates.
• In this case, no additional salary payment is required to compensate for social insurance contributions, since the contributions are already deducted and paid as part of the payroll.

How Long Can the Probation Period Last?

Vietnamese labor law regulates the maximum length of probation periods based on the nature and complexity of the job:

Employers and employees can only agree on one probation period per job, and probation is not allowed for labor contracts shorter than one month.

What Should Employers Do?

• Choose the right contract type: To defer social insurance contributions during probation, employers may opt for a separate probationary contract. However, this means no social insurance benefits during probation and no additional salary compensation for social insurance.
• Include probation in labor contracts: If you include probation in the labor contract, be prepared to make social insurance contributions from day one of employment.
• Communicate clearly: Inform probationary employees about their social insurance status and salary structure during probation.
• Ensure compliance: Vietnam’s authorities require social insurance contributions once a labor contract is signed, regardless of probation. Non-compliance can lead to penalties.

Conclusion

Foreign employers in Vietnam must carefully consider how they structure probation periods and social insurance obligations. While probationary contracts exempt employees from mandatory social insurance, no extra salary payment is required to compensate for this. Conversely, probation included in labor contracts requires immediate social insurance contributions without additional salary compensation.

For tailored advice and payroll management support, partnering with local HR experts like NetViet can help ensure your business remains compliant and your employees are fairly treated.

Contact NetViet for professional HR and payroll services to navigate Vietnam’s labor laws smoothly.

Note:
(1) Vietnam’s Labor Code 2019 and the Law on Social Insurance 2014

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