5 Payroll Challenges Commonly Faced by HR Dept. in Vietnam & How to Tackle

For a successful business, having payroll & HR under control means you can reduce costs and focus on your bottom line.

There are always new opportunities and challenges in setting up a new business in a foreign country. If you want to have a successful business in Vietnam, you must consistently address the common issues with payroll management. Hiring, firing and dealing with taxes, insurance and more can tough while navigating the bureaucracy of a new country. Here is a handy guide to help you along the way.

Find Out About Cekindo’s Payroll & HR Outsourcing Services

These common challenges can range from governance to technology, communications to local laws and regulations. Let’s dig deeper into some of them in this article.

5 Payroll Challenges in Vietnam

1. Incorrect Employee Classification

You will only make the payroll task harder when to categorise everyone who works for you and with you as your employees. You can’t classify part-time or temporary employees, freelancers, and independent contractors as your employees.

The consequences of misclassification are heavy fines and administrative disasters.

The Solution: When you work with a contractor or hire an employee, put them into the correct category as stipulated by the Vietnamese Law. Each category has its own set of requirements to tell you if your employee is eligible for withholding taxes or certain payroll benefits.

2. Late Payroll Processing

Many companies encounter delayed payroll processing due to improper timesheet, incorrect record, and misclassification of employees.

Paying your employees on-time and accurately is critical for employee satisfaction and retention. Failure to do so will lead to employee’s frustration and disappointment.

The Solution: Partnering with a provider in payroll outsourcing in Vietnam is probably the best way. A payroll outsourcing specialist will take care of every detail of your payroll process to keep your employees happy and your business is compliant.

RELATED: Your Simple Guide to Compensation, Benefits and Bonuses for Payroll in Vietnam

3. Erroneous Time Sheet Management

Supervising and managing workers’ attendance and time sheet is not only taxing but also difficult.

The situation gets worse when it involves employees from different locations, overtime work, holidays, and paid and unpaid leaves.

Wrong entry of time sheet data can lead to overpayment or underpayment of employees – both circumstances do not bring any good to the organisation. Legal issues will arise if an employee is underpaid.

The Solution: What is considered the best option is to outsource all these payroll-related activities to a provider with access to the latest payment management software and technology. With that, all absences and attendance will be uploaded and updated accordingly in real-time. Plus, hours and payroll are calculated automatically.

4. Ineffective Payment Reconciliation

One of the biggest challenges that many employers encounter is to reconcile the payment details with employees.

An easy way is to then send the payment through a payroll processor. However, the fact is many business owners can’t afford to use a payroll processor.

The Solution: A firm specialised in payroll outsourcing in Vietnam has all the most advanced payroll software you need to generate a pay chart and ensure the payment amount matches.

5. Inadequate Personal Files Management

Important documents such as labour or employee agreements, employee’s insurance, personal deduction declarations, and personal statements shall be properly organised and kept.

These files are vital for payroll processing and many companies do not have the correct system in place to do it.

The Solution: An HR and payroll outsourcing provider in Vietnam can help manage these critical files with modern and specialised software. All files are stored and organised properly in the cloud and backup harddisk and you don’t have to worry about losing them.

Outsource to Cekindo

Do you need relief from mundane HR and payroll tasks because you are ready to focus more on your core business functions? Or do you require a partner to take care of your payroll and keep your business compliant? Outsourcing might be the ideal solution for you.

In circumstances like this, Cekindo is your HR partner that provides you with customised support in payroll outsourcing in Vietnam, regardless of the size of your company.

Whatever your challenge may be, there is more than one reason to outsource with Cekindo.

Our package of payroll outsourcing in Vietnam cover the following key services:

  • Monthly payroll calculation
  • Monthly payslips and reporting
  • Medical and social insurance registration
  • Personal income tax declaration and assessment

Fill in the form below to know more or have a discussion with our payroll specialist.

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Verified by:​

Hien Le

Hien is a Manager of the Human Resources Department at our office in Vietnam. She has more than 15 years of experience in all spectrums of Human Resources including Global Mobility and Office Management.