Vietnam’s annual leave rules sit in a small but important corner of the Labour Code 2019: Articles 113 to 116. The headline number — 12 working days a year for normal working conditions — is easy to remember, but the rules around hazardous work, long service, pro-rating new hires, and paying out unused leave are where most foreign-invested employers stumble. The wrong calculation at termination is one of the most common reasons companies in Vietnam end up in front of a labour arbitrator.

This guide walks through what the Labour Code 2019 and Decree 145/2020/ND-CP actually require, who is covered, how to calculate pro-rated leave for new joiners, and the four pitfalls that recur in audits and disputes.

Key takeaways

Vietnam’s Labour Code 2019 sets a statutory minimum of 12 working days of paid annual leave for employees in normal working conditions.
Employees working in arduous or hazardous conditions get 14 days; those in especially arduous or hazardous conditions get 16 days.
Employees earn an additional one day of annual leave for every five years of service with the same employer.
Annual leave is pro-rated for employees who have not completed 12 months of service, rounded up to the nearest half day.
Unused annual leave must be paid out on termination, calculated using the average salary of the six months preceding the leave.

The statutory minimum: 12, 14, or 16 days

Article 113 of the Labour Code 2019 sets the floor for paid annual leave. The number of days depends on the working conditions of the role, not the seniority or salary of the employee:

Working conditions	Statutory annual leave
Normal conditions	12 working days
Arduous, toxic, or hazardous conditions	14 working days
Especially arduous, toxic, or hazardous, or minors	16 working days

The 14-day and 16-day brackets cover roles defined as hazardous under separate Ministry of Labour, Invalids and Social Affairs (MOLISA) lists, as well as employees under 18 and disabled employees. For most office, retail, and standard service-sector roles, the relevant figure is 12 days.

For comparison, this is well below the Singapore Employment Act floor of seven to fourteen days, but Vietnam’s 12 days is a hard minimum across the board — there is no three-month qualifying period, and the entitlement begins to accrue from day one.

The long-service add-on

Article 114 adds one further day of annual leave for every five completed years of service with the same employer. So an employee in their fifth year of service in a normal-conditions role moves from 12 to 13 days; at ten years, they get 14; at fifteen, 15; and so on. The add-on stacks on top of whichever bracket applies under Article 113. An employee in arduous conditions with ten years of service therefore receives 14 + 2 = 16 days.

This is a single-employer count. Service with a previous employer does not carry over. Foreign-invested companies sometimes treat the add-on as a contractual nice-to-have, but it is statutory under the Labour Code and not negotiable below the floor.

Eligibility and pro-rating

The Labour Code applies to all employees working under a labour contract in Vietnam, whether the contract is indefinite, fixed-term, or seasonal. There is no salary threshold, and managerial staff are covered on the same basis as line employees.

Pro-rating for less than 12 months

Article 113(2) requires pro-rated leave for employees who have not completed a full 12 months of service. The standard formula is:

(months worked ÷ 12) × annual entitlement

Decree 145/2020/ND-CP confirms that fractional results are rounded up to the nearest half day. So an employee who started six months ago in a normal-conditions role is entitled to (6 ÷ 12) × 12 = 6 working days of leave. If a new joiner leaves after eight months, the calculation gives (8 ÷ 12) × 12 = 8 days of accrued leave; any unused balance is paid out on termination.

Probationary employees

Probationary employees are not entitled to annual leave during the probation period. Once the probation ends and the labour contract begins, accrual starts from day one of the contract.

How annual leave is paid

Annual leave is paid at the employee’s normal salary. For unused leave paid out on termination, the Labour Code uses a different basis: the average salary of the six months preceding the leave, calculated on a daily basis. This six-month average smooths out variation from bonuses, allowances, and overtime, and is what payroll teams must use when finalising a termination payment.

Where an employee with several years of service has banked unused leave, the daily rate used for the payout can differ materially from their current monthly base — a common source of underpayment when companies use a simple “current daily rate” calculation instead of the six-month average.

Employer obligations under Articles 113–116

Vietnamese employers have five core obligations under the Labour Code’s annual leave provisions:

Provide the statutory minimum of 12, 14, or 16 days based on working conditions, plus the long-service add-on.
Pro-rate leave for employees with less than 12 months of service, rounded up to the nearest half day.
Pay employees during annual leave at their normal salary rate.
Pay out unused annual leave on termination using the six-month average salary as the daily basis.
Determine the leave schedule in consultation with the employee — Article 113(4) requires the employer to set an annual leave plan after consulting workers, and to publish it in advance.

Employers must also keep accurate leave records as part of general labour record-keeping obligations under the Code. Inspections by the local Department of Labour, Invalids and Social Affairs (DOLISA) routinely review whether leave balances and payouts match the statutory formulas.

What employees are entitled to

The corresponding rights for employees are:

Right to 12, 14, or 16 days of paid annual leave depending on working conditions.
Right to one additional day for every five completed years of service with the same employer.
Right to be paid for unused annual leave on termination, calculated using the six-month average.
Right to be consulted on the timing of annual leave when the employer sets the annual schedule.
Right to carry over leave to the following year by mutual agreement with the employer.

Where carry-over is agreed, the leave keeps its character as statutory leave and remains payable on termination if still untaken.

Common pitfalls

Four mistakes recur in our reviews of Vietnam payroll and leave audits.

1. Treating the 12-day floor as the contractual ceiling

The 12 days is the minimum, not a target. Many foreign-invested employers offer 15 to 18 days through contract to match regional benchmarks, particularly for professional and technical roles. Setting the contract at exactly 12 is legally compliant but uncompetitive in Hanoi and Ho Chi Minh City labour markets.

2. Forgetting the long-service add-on

The Article 114 increment of one day per five years is easy to miss when a company has not yet had employees reach the threshold. Payroll systems that do not auto-increment leave by tenure under-pay long-tenured staff at termination — and the underpayment is straightforward for a labour inspector to spot.

3. Using the wrong daily rate for termination payouts

The Labour Code requires the payout for unused leave to be calculated using the average salary of the six months preceding the leave, not the employee’s current daily rate. Companies that use a simple “monthly salary divided by working days” approach almost always underpay employees whose salary has recently increased or who received variable allowances.

4. Skipping pro-rating for new joiners

A clean and frequent error is to pay zero accrued leave to an employee who leaves in their first year. Article 113(2) is unambiguous: leave accrues pro rata from day one, and any unused balance must be paid out on termination, even for an employee with only a few months of service.

For broader context on how annual leave fits alongside sick leave, parental leave, and statutory holidays in regional comparisons, see our overview of the main types of leave employers manage and the annual leave guide for Australia.

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Frequently asked questions

How many days of annual leave do employees get in Vietnam?

The Labour Code 2019 sets a minimum of 12 working days of paid annual leave for employees in normal working conditions. Employees in arduous or hazardous roles get 14 days, and those in especially arduous or hazardous conditions, minors, and disabled employees get 16 days. An additional day is added for every five completed years of service with the same employer.

Do employees in Vietnam get annual leave in their first year?

Yes. Annual leave accrues from day one of the labour contract and is pro-rated for employees who have not completed 12 months of service. The formula is (months worked ÷ 12) × the annual entitlement, with fractions rounded up to the nearest half day. Probationary employees are not entitled to annual leave until the labour contract begins.

Can annual leave be carried forward in Vietnam?

Yes, by mutual agreement between the employer and the employee. The Labour Code allows carry-over to the following year where both parties agree. Carried-over leave keeps its statutory status and must be paid out on termination if still untaken.

What rate of pay applies to unused annual leave on termination?

Unused annual leave is paid at the daily rate calculated from the average salary of the six months preceding the leave. Using the employee’s current daily rate alone is a common error and typically underpays employees whose pay has recently increased.

Are probationary employees entitled to annual leave in Vietnam?

No. Probationary employees do not accrue statutory annual leave. The entitlement begins once the probation period ends and the labour contract takes effect. From that point, leave accrues from day one and is pro-rated for the first year.

How is the long-service add-on calculated?

For every five completed years of service with the same employer, the employee earns one additional day of annual leave. The add-on stacks on top of the working-conditions bracket. An employee with 10 years of service in a normal-conditions role is entitled to 12 + 2 = 14 days. Service with a previous employer does not count.

Putting it into practice

If you employ staff under a labour contract in Vietnam, the practical to-do list is short:

Confirm contracts state the correct annual leave bracket — 12, 14, or 16 days — based on the role’s working conditions.
Configure your payroll or HR system to auto-increment leave by every completed five years of service.
Pro-rate leave for new joiners using months worked ÷ 12, rounded up to the nearest half day.
Use the six-month average salary as the daily rate for unused-leave payouts on termination.
Publish the annual leave schedule after consulting employees, and keep records that survive a DOLISA inspection.