Severance Pay in Vietnam 2026: Trợ Cấp Thôi Việc vs Trợ Cấp Mất Việc Làm

Key facts

Trợ cấp thôi việc

0.5 month/year

standard lawful termination

Trợ cấp mất việc làm

1 month/year, min 2

restructuring, tech change

Minimum tenure

12 months

to qualify for either

Vietnam's Labor Code provides two distinct employer-paid severance payments, not one, and they use genuinely different formulas. Confusing them, or assuming the more generous one always applies, is the single most common mistake in both employee expectations and employer payroll planning.

Which one applies depends entirely on why the employment ended, not on years of service or salary level.

Trợ cấp thôi việc: the general severance allowance

This is the default severance payment for a lawful contract termination that doesn't fall under the job-loss category, most resignations, mutual agreements, and standard contract endings. The formula is 0.5 × your average salary over the last 6 months × your actual years worked, where "actual years worked" specifically excludes any period already covered by unemployment insurance contributions or already compensated by a prior payment. You need at least 12 months of regular employment to qualify.

Trợ cấp mất việc làm: the job-loss allowance

This applies specifically when termination happens for reasons outside the employee's control, restructuring, technological change, or a merger, division, or transformation of the enterprise (Điều 42-43 of the Labor Code). The formula is considerably more generous: 1 month's salary for every year worked, with a floor of 2 months' salary regardless of tenure. An employer cannot choose to pay the lower trợ cấp thôi việc rate when the termination genuinely falls into this category.

You can't receive both for the same period

The Labor Code is explicit: an employee cannot receive trợ cấp thôi việc and trợ cấp mất việc làm for the same span of employment. Getting the classification right matters, since the two formulas can produce very different totals for the same tenure and salary.

Where unemployment insurance fits in

Trợ cấp thất nghiệp (unemployment insurance benefit) is a separate, third payment entirely, administered and paid by the social insurance agency (BHXH), not the employer. It has its own contribution history requirements and payment schedule, and any period already covered by unemployment insurance contributions is excluded from the years used to calculate trợ cấp thôi việc, to avoid double-compensating the same period.

A practical checklist before you calculate anything

Confirm the actual reason for termination in writing, it determines which formula applies.
Check your average salary over the last 6 months, including allowances and additional payments in the contract.
Subtract any period already covered by unemployment insurance from your years-worked figure.
Confirm you've completed at least 12 months of regular employment.
If the employer cites restructuring or technology change, verify that trợ cấp mất việc làm, not the lower trợ cấp thôi việc rate, is being applied.

For employers budgeting a restructuring

If a workforce reduction is driven by genuine restructuring or technology change, budget for trợ cấp mất việc làm's 1-month-per-year formula, not the smaller trợ cấp thôi việc figure. Misclassifying the termination reason to apply the cheaper formula is a common source of labor disputes in Vietnam, and DOLISA (the Department of Labor, Invalids and Social Affairs) can be involved if an employee challenges the classification.

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Frequently asked questions

What's the difference between trợ cấp thôi việc and trợ cấp mất việc làm?

Trợ cấp thôi việc (severance allowance) applies to a lawful termination that isn't covered by the job-loss category, most resignations and standard contract endings. Trợ cấp mất việc làm (job-loss allowance) applies specifically when termination is for reasons outside the employee's control, restructuring, technology change, or a merger/division of the enterprise (Điều 42-43 of the Labor Code). You cannot receive both for the same period of work.

How is trợ cấp thôi việc calculated?

0.5 × your average salary over the last 6 months × your actual years worked, where actual years worked excludes any period already covered by unemployment insurance (bảo hiểm thất nghiệp) or already compensated by a prior severance or job-loss payment.

How is trợ cấp mất việc làm calculated?

1 month's salary for every year worked, with a minimum of 2 months' salary regardless of tenure. This is a materially more generous formula than trợ cấp thôi việc, which is why the distinction matters.

Do I qualify for severance if I've worked less than a year?

No. Trợ cấp thôi việc requires at least 12 months of regular employment with that employer before it applies.

Is severance pay separate from unemployment insurance benefits?

Yes, they're entirely different payments from different payers. Trợ cấp thôi việc and trợ cấp mất việc làm are paid by the employer directly. Trợ cấp thất nghiệp (unemployment insurance benefit) is paid by the social insurance agency (BHXH) and follows its own separate eligibility and payment rules.

What notice period applies before termination?

Generally 30 days for a definite-term contract and 45 days for an indefinite-term contract, though specific termination grounds under the Labor Code can set different requirements.