Vietnam EOR Pricing Explained: Your Essential Guide to Budgeting for Global Talent

Employer of Record service fee

When a company considers expanding its workforce internationally, one of the first and most critical questions is about cost. Understanding Vietnam EOR pricing from the outset is essential for confident budget planning and developing a successful global business strategy. This guide breaks down the core components of EOR (Employer of Record) pricing in Vietnam to give you the clarity you need.

The Total EOR Cost: A Two-Part Calculation

The final price of using an EOR in Vietnam is not a single number. Instead, it’s a combination of two distinct elements: the employee’s total cost and the EOR provider’s service fee.

  1. Employee Cost: The Foundation

This is the total amount you must pay for the employee, encompassing all direct and indirect expenses. It’s the base on which the EOR service fee is applied. According to Vietnam’s labor laws, employee costs typically include:

  • Base salary: The standard monthly wage.
  • Allowances and bonuses: Payments for meals, transportation, performance bonuses, and the common 13th-month salary.
  • Social, Health, and Unemployment Insurance (SHUI): The mandatory employer contributions, which are a significant factor and are calculated based on the employee’s base salary.
  • Union trade expenses: Fees required by a trade union, calculated based on the employee’s base salary.
  • Other expenses: A wide range of potential costs, from birthday gifts and medical check-ups to premium health insurance, phone cards, travel, and seminar tickets.
  • Compensation: This includes potential termination-related costs like severance pay.

You can get an accurate estimate of these expenses by using an employee cost calculator provided by NetViet.

  1. EOR Management Service Fee

This is the fee you pay the EOR provider for their expertise and administrative services, which include payroll processing, compliance management, and general HR administration. It is a separate charge added to the employee’s total cost.

Unpacking Vietnam EOR Pricing Models

EOR providers in Vietnam typically offer two main pricing models. Knowing which one is right for your company is key to managing your budget.

Pricing Model

Description Advantages Disadvantages

Best For…

Percentage of Employee Cost The EOR charges a fee that is a predetermined percentage of the employee’s total cost.
  • Cost alignment: Your cost scales directly with your payroll.
  • Efficiency: Can be more cost-effective for companies with a lower-paid workforce.
  • Budget predictability: Works well for a consistent, low-to-mid-range salary structure.
Cost increases with salary: This model can become expensive when hiring highly-paid employees or giving significant raises. Startups, SMEs, and businesses with a workforce where salaries vary significantly.
Flat Fee per Employee The EOR charges a fixed, flat fee for each employee, regardless of their salary or total cost.
  • Budget predictability: Provides a simple, fixed monthly cost that is easy to forecast.
  • No surprises: Your fee remains the same even if you hire high-earning talent.
  • Simplicity: Easier to manage and understand for financial planning.
Less flexible: The flat rate may not be cost-effective for low-paid employees.
Less scalable: Can be expensive for low-usage scenarios.
Organizations with a consistent employee base and companies seeking straightforward, clear budgeting.

 

Key Factors Influencing the Final EOR Cost in Vietnam

While the pricing model provides a framework, several other factors specific to Vietnam can influence your final bill. A knowledgeable HR professional considers these for accurate forecasting.

  • Number of Employees: Many EOR providers offer volume-based pricing. A larger team may qualify for a lower per-employee fee, as the administrative cost per employee decreases. This is a common practice that rewards scale.
  • Employee Cost: The total employee cost is the base for your EOR cost. Higher salaries and more extensive benefits will result in a higher overall price, especially under a percentage-based model. It’s important to be aware of how benefits, in addition to base salary, will impact your total cost.
  • Service Scope: The range of services you need directly impacts the cost. While basic payroll and compliance are standard, additional services like expense management, visa support for foreign workers, or legal consulting for specific labor matters will add to the fee.

Potential Additional Fees to Consider

  • Setup Fee: A one-time fee for onboarding, particularly for complex requirements.
  • Deposit: A refundable security deposit may be required to cover potential liabilities.
  • Late Payment Fee: An additional service charge for late payments.
  • Ad Hoc Payroll Requests: Extra fees for off-cycle payroll runs or special requests.
  • Offboarding Fees: A charge for processing employee terminations to ensure legal compliance.

Conclusion: Making a Strategic Choice

Navigating Vietnam EOR pricing requires looking beyond the initial quote. By understanding the full cost structure—from the pricing model to potential additional fees—you can make an informed decision that aligns with your company’s strategic goals and budget.

Choosing the right EOR is a strategic partnership that ensures your global team is managed compliantly and efficiently.

NetViet is an EOR service provider with a deep understanding of Vietnam’s labor laws and market dynamics. Contact us for a detailed EOR quotation to fit your specific needs.

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