Insights
Annual Leave in Vietnam 2026: Days & Unused Payout
By Nguyễn Quốc Trung — Deputy General Director · Updated
An employee who has worked a full 12 months for one enterprise is entitled to 12, 14 or 16 working days of annual leave on full pay, depending on the nature of the work (Article 113 of the Labour Code 2019, No. 45/2019/QH14, in force from 1 January 2021). When an employee resigns or loses their job with leave still untaken, the enterprise must pay wages for those days: the wage used as the basis is the contractual salary of the month immediately preceding the month of resignation or job loss (Decree 145/2020/ND-CP, Article 67(3)), which is then converted into a daily leave rate by dividing it by the number of ordinary working days in the month under the enterprise's calendar (the law fixes no set denominator) and multiplying by the number of leave days remaining.
This article is written for directors, HR managers and accountants who need to finalise annual leave and calculate leave pay, updated to the rules in force as of September 2026, including the new penalties of Decree 283/2026/ND-CP that apply from 10 September 2026.
How many annual leave days do employees get in Vietnam (12, 14 or 16)?
An employee who has worked a full 12 months for one employer is entitled to annual leave on full pay of 12 working days for work under normal conditions, 14 working days for minors, people with disabilities and those in heavy, hazardous or dangerous jobs, and 16 working days for especially heavy, hazardous or dangerous jobs (Article 113(1) of the Labour Code 2019, No. 45/2019/QH14). These are working days, not calendar days, so weekly rest days and public holidays are not counted towards the leave entitlement.
| Type of work | Leave per year (after a full 12 months) |
|---|---|
| Normal conditions | 12 working days |
| Minors, people with disabilities, heavy/hazardous/dangerous jobs | 14 working days |
| Especially heavy/hazardous/dangerous jobs | 16 working days |
Annual leave is different from public holidays, Tet and weekly rest days. Public holidays are the days the whole country rests on full pay under Article 112 — see the Vietnam public holidays 2026–2027; and when an employee works on a weekly rest day or a public holiday, that pay is calculated as overtime — see how overtime, night and holiday pay is calculated in 2026.
How does annual leave increase with length of service?
For every full 5 years of work for one employer, the number of annual leave days increases by a corresponding 1 day (Article 114 of the Labour Code 2019). Length of service is counted by the time attached to the same enterprise; it does not carry over from a previous workplace.
| Length of service at one enterprise | Annual leave (normal work) |
|---|---|
| Under 5 years | 12 days |
| A full 5 years | 13 days |
| A full 10 years | 14 days |
| A full 15 years | 15 days |
This is an illustration for work under normal conditions; the 14-day and 16-day baseline groups also gain days the same way, one day for every 5 years.
How is annual leave calculated for less than 12 months of service?
An employee who has worked less than 12 months for one employer earns annual leave in proportion to the number of months worked (Article 113(2) of the Labour Code 2019). The method is set out in Article 66(1) of Decree 145/2020/ND-CP: take the annual leave days plus any extra days for length of service (if any), divide by 12, then multiply by the number of months actually worked in the year.
For a partial working month, if the employee's total working days and paid leave days make up 50% or more of the ordinary working days in that month, the month counts as 1 month for leave purposes (Article 66(2)). The Labour Code 2019 and Decree 145/2020/ND-CP set no rounding rule for a fractional leave day, so any fraction is settled between the enterprise and the employee in the internal rules or the leave schedule.
Article 65 of Decree 145/2020/ND-CP also lists the periods treated as working time for leave purposes, even when the employee is not present at the workplace:
- Probation time, if the employee then continues to work for the enterprise
- Paid personal leave under Article 115(1)
- Sick leave adding up to no more than 2 months in a year
- Leave for occupational accidents or diseases adding up to no more than 6 months
- Maternity leave taken under social insurance law
How is unused annual leave paid out on termination in Vietnam?
Only on resignation or job loss with leave unused does the employee become entitled to wages for the untaken leave days (Article 113(3) of the Labour Code 2019). The wage used as the basis is the contractual salary of the month immediately preceding the month of resignation or job loss (Decree 145/2020/ND-CP, Article 67(3)); from that figure, the daily leave rate is derived by dividing by the number of ordinary working days in the month under the enterprise's calendar, then multiplying by the number of untaken leave days.
The daily leave rate follows the enterprise's actual working calendar, because the law fixes only the numerator — the preceding month's salary — without hard-setting a denominator of 24 or 26 standard working days. Take an example with assumed figures: an employee has 5 leave days left, and the preceding month's contractual salary is VND 13,000,000.
| Standard working days on the enterprise's calendar | Daily leave rate | Pay for 5 untaken leave days |
|---|---|---|
| 26 days | VND 500,000 | VND 2,500,000 |
| 24 days | about VND 541,667 | about VND 2,708,000 |
The two results differ only because the denominator differs, so the enterprise should state clearly how it determines the month's standard working days in its internal rules or employment contract, to avoid disputes when settling final pay.
It is also worth noting a common but outdated understanding: since 1 January 2021, the Labour Code 2019 allows payment for untaken leave only on resignation or job loss, having dropped the "for other reasons" case of the Labour Code 2012. So the claim that "unused leave is always paid out" does not match the law in force.
On tax, Article 4(8) of the Personal Income Tax Law No. 109/2025/QH15 classifies "wages and remuneration paid for days of untaken leave under the law" as income exempt from tax; for resident individuals, this applies from the 2026 tax period (Article 29(2)). Article 26(2) of Decree 253/2026/ND-CP makes clear that this exemption applies to pay for days of untaken leave under Article 113(3) of the Labour Code; the portion paid above the rate set by law is counted as taxable income (Article 26(3)). So pay for untaken leave made correctly under Article 113 and Article 67 above is not subject to personal income tax withholding.
Which month's salary is the basis for paying unused leave?
The wage used to pay for untaken leave days on resignation or job loss is the contractual salary of the month immediately preceding the month in which the employee resigns or loses their job (Decree 145/2020/ND-CP, Article 67(3)). It is not a 6-month average, and it is not the salary of the final month.
This must be distinguished from leave days an employee actually takes while still working: that pay uses the contractual salary at the time of the leave (Article 67(2)). Only leave left untaken at the point of termination uses the preceding month's salary (Article 67(3)). Confusing these two reference points is why many spreadsheets produce figures that differ.
Can unused annual leave be carried over to the next year?
The Labour Code 2019 sets no "3-day carry-over cap" for annual leave. The only rule on combining leave is that an employee may agree with the employer to take annual leave in several instalments or to combine it at most once every 3 years (Article 113(4) of the Labour Code 2019).
"Combining leave at most once every 3 years" is about how leave is scheduled — pooling up to three years of leave into one block by agreement — not a limit of only 3 days carried into the next year. The employer is responsible for setting the annual leave schedule after consulting employees. The law does not provide that leave is automatically lost if not fully taken within the year; carrying leave into the next year is decided by agreement between the two parties and by the enterprise's internal rules and leave schedule.
What is the fine for not paying out unused leave on termination (2026)?
Failing to pay, or underpaying, wages for untaken leave days when an employee resigns or loses their job is a wage violation under Article 23(2) of Decree 283/2026/ND-CP (in force from 10 September 2026), fined according to the number of affected employees, from VND 5,000,000 to VND 50,000,000 for an individual and double that for an organisation under Article 7(1).
| Number of affected employees | Fine for an individual | Fine for an organisation (double) |
|---|---|---|
| 1–10 employees | VND 5–10 million | VND 10–20 million |
| 11–50 employees | VND 10–20 million | VND 20–40 million |
| 51–100 employees | VND 20–30 million | VND 40–60 million |
| 101–300 employees | VND 30–40 million | VND 60–80 million |
| 301 or more employees | VND 40–50 million | VND 80–100 million |
So the "VND 100 million" figure is correct only when an organisation offends against 301 or more employees; it is not a flat penalty. Beyond the fine, Article 23(5)(a) requires the enterprise to pay the full wages plus interest calculated at the highest non-term deposit rate published by state-owned commercial banks at the time of the penalty.
A separate act — breaching the rules on annual leave, such as not letting employees take their leave — is fined under Article 24(2) of Decree 283/2026/ND-CP: from VND 10,000,000 to VND 20,000,000 for an individual and VND 20,000,000 to VND 40,000,000 for an organisation, a fixed amount not scaled by headcount. The full picture of fines and back-collection under this decree is in social insurance fines 2026 under Decree 283.
How does Nhan Kiet finalise leave balances and pay out leave for clients?
The hard part of annual leave is not the formula but tracking the leave balance throughout employment and then settling it correctly when the employee leaves. Nhan Kiet keeps each person's leave record on its system; when an employee resigns, it finalises the leave balance and pays out untaken leave under Article 113(3) of the Labour Code 2019 and Article 67(3) of Decree 145/2020/ND-CP, along with closing the social insurance book and completing the exit file.
Nhan Kiet has operated since 2009 and is now in its 17th year, under labour sub-leasing Licence No. 15/2019/SHCM (first issued as No. 029/LDTBXH — 2015), serving more than 40,000 workers and more than 500 clients across 34 provinces and cities. A company that wants to move leave tracking, leave-pay calculation and employer responsibilities to a single point of contact can look at labour compliance services; if only payroll and the exit paperwork for finalising leave are needed, use payroll outsourcing services.
Sources
- Labour Code 2019 (No. 45/2019/QH14) — Article 113 (annual leave), Article 114 (length of service); in force from 1 January 2021
- Decree 145/2020/ND-CP — Articles 65, 66, 67 (time counted for leave, proration, wage for untaken days); in force from 1 February 2021
- Personal Income Tax Law No. 109/2025/QH15 — Article 4(8) (tax exemption for wages paid for days of untaken leave), Article 29 (application from the 2026 tax period); in force from 1 July 2026
- Decree 253/2026/ND-CP — Article 26(2) and (3) (exemption of pay for days of untaken leave; the portion above the statutory rate is taxable); in force from 1 July 2026
- Decree 283/2026/ND-CP — Article 23 (wages), Article 24 (working and rest time), Article 7 (organisations fined double); in force from 10 September 2026
This article summarises the rules for orientation; specific situations need individual advice.
Contact us
Companies that need to finalise leave balances, calculate pay for untaken leave when an employee leaves, or standardise lawful exit paperwork can contact:
- Nguyen Quoc Trung — Deputy General Director
- Phone: 0908 636 108 — [email protected]
- Switchboard: 028 3505 4224
- Head office: Room 202, Building 57, 57 Le Thi Hong Gam, Ben Thanh Ward, Ho Chi Minh City
Call +84 908 636 108 or see labour compliance, payroll outsourcing, EOR Vietnam.