How to pay contractors in Vietnam

How to choose: paying contractors in Vietnam

Four questions settle the choice. Take them in order: the first firm answer usually decides the platform type.

1. Does the contractor want dong on arrival, or dollars to hold?

Ask before you pick anything, because the two paths behave differently once the money lands.

• Dong. A transfer converted at the mid-market rate arrives as VND in the contractor’s bank account. Wise caps each VND transfer at VND 499,999,999, about USD 19,250 at the rate it showed on 2026-09-28, and cannot pay VND into business accounts at six banks, including HSBC Vietnam and Citibank (Wise Help Centre, checked 2026-09-28).
• Dollars. A resident may receive foreign currency from abroad into a foreign-currency account, keep it and withdraw it as cash (SBV Circular 16/2014, Art. 4, checked 2026-09-28). Spending at home still means selling to a bank for VND, since payments inside Vietnam must be in dong (SBV Circular 32/2013, checked 2026-09-28).

The conversion is also one-way. HSBC Vietnam’s guidance for individuals says a transfer from a VND account into a foreign-currency account is not permitted (HSBC Vietnam, checked 2026-09-28), so a contractor paid in dong cannot simply move it back into a dollar account.

If the contractor wants dong, use a rail that converts at or near mid-market and pays out locally. If they want to hold dollars, pay by SWIFT to their USD account or to a Payoneer balance and let them convert when they choose.

2. Do you need a contract and closing documents behind every payment?

The contractor needs them even if you don’t. A resident paid from abroad files personal income tax directly, quarterly, on Form 02/KK-TNCN (EY Vietnam, May 2026), and the contract, invoices and bank statements are the evidence behind that return. A household business whose revenue passes VND 1 billion a year must issue electronic invoices (Vietnam Law Magazine, April 2026).

If your finance team, auditor or investors expect a contract, an invoice and a payment record per payout in one export, choose a contractor platform that generates them. If you only need money to arrive, a transfer service is enough and costs less.

3. Percentage fee or per-seat subscription?

Platforms charge either a percentage of each payout or a flat monthly fee per contractor. A flat fee S beats a percentage p once the monthly invoice exceeds S ÷ p: a USD 29 seat against 3% breaks even at about USD 967, a USD 40 seat at about USD 1,333.

If you pay a few contractors large monthly invoices, per-seat pricing usually wins. If you pay many small or irregular invoices, a percentage fee with no subscription costs less. Add the conversion spread to both sides: every payment that ends in dong goes through it, and on PayPal alone the spread is 3.00–4.00% (paypal.com/vn, updated 2026-05-28).

4. How close is the role to a job?

Article 13 of Vietnam’s Labour Code treats any agreement containing paid work, wages and management or supervision as an employment contract, whatever it is called. Employment brings employer contributions of 21.5% of salary for social, health and unemployment insurance (PwC, reviewed 2026-09-23). The details are in our hiring guide.

If the contractor works on deliverables, sets their own hours and has other clients, a payout service or contractor platform is enough. If the engagement is long, full-time and run on your team’s schedule, choose a platform with a Contractor of Record tier that signs the contract and so reduces misclassification risk. 4dev acts as Contractor of Record: it is the contracting party for each contractor, which reduces reclassification risk. If the person is really an employee, use an Employer of Record; Deel, Multiplier and Remote run contractors and EOR in one account.

Quick map

Payout rails that work in Vietnam in 2026

Sources: Wise fees and speed (wise.com); Wise limits and bank exclusions (Wise Help Centre); Payoneer (payoneer.com/pricing); PayPal (merchant fees, updated 2026-05-28); AML reporting (Duane Morris, January 2026). All checked 2026-09-28.

Currency rules shape where the money ends up, not whether it arrives. A resident individual’s foreign-currency payment account may take in transfers from abroad, and the holder may withdraw foreign cash (SBV Circular 16/2014, Art. 4, checked 2026-09-28). Inside Vietnam, transactions, prices and payments must be in dong (SBV Circular 32/2013, checked 2026-09-28). Banks set their USD rates within a 5% band around the State Bank’s daily central rate, which reached a record VND 25,306 on 27 July 2026 (VnExpress, checked 2026-09-28).

What the contractor needs

A Vietnamese contractor usually works in one of two ways.

• As an unregistered individual. Income paid from abroad is declared directly with the tax office, quarterly on Form 02/KK-TNCN, by the last day of the month after the quarter (EY Vietnam, May 2026; deadline under Article 44 of the Law on Tax Administration, Viet An Law, checked 2026-09-28). The Q3 2026 return is due on 31 October 2026. The income is taxed at progressive rates of 5% to 35% after a personal deduction of VND 15.5 million a month (Vietnam Law Magazine, checked 2026-09-28).
• As a household business (hộ kinh doanh). The lump-sum tax was abolished from 1 January 2026, and households now self-declare actual revenue (Viet Nam News, checked 2026-09-28). Revenue up to VND 1 billion a year pays no PIT or VAT under Decree 141/2026, and above that the business must issue electronic invoices (Vietnam Law Magazine, April 2026, checked 2026-09-28).

Either way the contractor needs a bank account in their own name (a foreign-currency account if you pay USD) and a tax code, which for Vietnamese citizens has been their 12-digit personal ID number since 1 July 2025 (baochinhphu.vn, checked 2026-09-28). They issue an invoice for each payment. Classification, the two tax routes and contract terms are covered in our hiring guide.

Documents and tax on the payer’s side

Vietnamese withholding. A Vietnamese entity paying a resident for services without a labour contract withholds 10% on payments from VND 5 million (Acclime; Vietnam Law Magazine, checked 2026-09-28). If you pay from abroad, the declaration is the contractor’s, under the self-declaration route above.

US payers. Collect Form W-8BEN. A foreign person who provides a valid W-8 is exempt from backup withholding and Form 1099 reporting (IRS Publication 515, checked 2026-09-28). There is no US–Vietnam income tax treaty in force: Vietnam is not on the IRS list of treaty countries (irs.gov, checked 2026-09-28), and the treaty signed in 2015 still awaits US Senate approval (W&A Consulting, checked 2026-09-28).

What to keep on file:

1. A signed services agreement with deliverables, rate, currency and an explicit IP clause.
2. The contractor’s invoice for every payment.
3. Proof of payment showing the amount sent, the amount received and the FX rate.
4. The contractor’s tax code, and their household business registration if they invoice as one.
5. Form W-8BEN, if you are a US payer.

Where it breaks

• Per-transfer caps. Wise sends at most VND 499,999,999 per transfer, about USD 19,250 on 2026-09-28. A quarterly invoice above that goes out in two transfers or by another rail.
• Business accounts at excluded banks. A contractor who invoices as a household business may give you a business account at HSBC Vietnam, Citibank or ANZ, where Wise cannot deliver VND (Wise Help Centre). Check the bank before the first payment.
• Dong that can’t go back. HSBC Vietnam’s guidance says an individual may not transfer from a VND account into a foreign-currency account (HSBC Vietnam, checked 2026-09-28). If the contract says USD and you send VND, the contractor can’t simply move it back into a dollar account. Agree the payout currency in the contract.
• AML questions. Every inbound or outbound international transfer of USD 1,000 or more is reported to the State Bank’s AML unit (Duane Morris). A bank that asks the contractor where the money came from wants the contract and invoice, so send both with the first large payment. The name on the payment must match the account holder. See also AML and KYC.
• Fee stacking on PayPal. On a USD 1,000 invoice, the 4.40% + USD 0.30 receiving fee takes USD 44.30, and a 3.00–4.00% conversion takes USD 28.67 to USD 38.23 of the rest: 7.3% to 8.3% gone before the dong reach a bank. If the contractor wants PayPal, agree in the contract who bears the fee.
• Short-paid wires. SWIFT payments sent with shared charges arrive minus correspondent fees, so the invoice is settled short. Send with the sender paying all charges, or use a rail that pays out locally in VND.