Case Study: Building a Vietnam-Compliant vHRMS on Frappe
FIX Partner’s approach to enterprise software: combining deep local regulatory understanding with modern, scalable technology. By building a Vietnam-compliant vHRMS on Frappe, we delivered more than a system; we delivered confidence, clarity, and control for HR and finance teams.
At FIX Partner, we believe that successful digital transformation starts with respecting local realities. For human resource management systems, this principle is especially critical in Vietnam, where labor laws, social insurance regulations, and personal income tax regulations are highly specific and frequently updated.
This case study explains how we designed and delivered a Vietnam-compliant vHRMS on top of the Frappe Framework, extending ERPNext and Frappe HRMS to support Vietnamese legal and operational requirements fully. The project was not just a technical implementation; it was a business-driven transformation aimed at making HR operations accurate, compliant, and sustainable for Vietnamese enterprises.
Business Context and Core Challenge
1. The Gap Between Global HRMS and Vietnam Reality
Frappe HRMS is a powerful open-source human resource management module developed with international best practices in mind. However, like many global HR platforms, it does not natively support Vietnam-specific requirements such as:
- Mandatory social insurance schemes (Social Insurance (SI), Health Insurance (HI), Unemployment Insurance (UI))
- Progressive personal income tax rules
- Regional minimum wage regulations
- Over time coefficients defined by the Vietnamese labor law
- Official reports and templates required by government agencies
As a result, Vietnamese companies adopting standard HRMS platforms often rely on spreadsheets, manual calculations, or disconnected tools to handle compliance. This creates risk, inefficiency, and operational complexity.
2. Project Objective
Our objective was clear: build a Vietnam-compliant vHRMS that integrates seamlessly with Frappe HRMS while fully adhering to Vietnamese labor, tax, and insurance regulations. The system needed to be accurate, auditable, scalable, and understandable for non-technical HR and finance teams.
Solution Overview: Vietnam-Compliant vHRMS
1. Architecture Strategy
We developed a dedicated custom application on the Frappe Framework, tightly integrated with ERPNext and Frappe HRMS. This approach allowed us to:
- Preserve core Frappe HRMS functionality
- Isolate Vietnam-specific logic into a reusable, maintainable module
- Ensure compatibility with future upgrades of the core platform
The result was a modular Vietnam-compliant vHRMS that feels native to Frappe while delivering localized compliance.
2. Localization-First Design Philosophy
From the beginning, we made a strategic decision to design the system with a localization-first mindset, rather than retrofitting Vietnam-specific rules onto a global HR model.
This meant starting from Vietnamese labor practices, regulatory workflows, and reporting habits, then mapping them cleanly into the Frappe data model. Key principles included:
- Treating compliance rules as core business logic, not configuration add-ons
- Designing HR workflows around how Vietnamese HR teams actually operate
- Using clear terminology and explanations suitable for non-technical users
By doing so, the vHRMS avoids the common pitfalls of overly generic HR platforms, where local compliance becomes fragile and hard to maintain. Instead, Vietnam compliance is embedded by design, ensuring long-term stability even as regulations evolve.
Key Functional Modules and Business Logic
1. Regional Minimum Wage Management
Vietnam enforces different minimum wage levels based on geographic regions. We built a structured wage management module that:
- Defines minimum wage levels for all regions
- Supports effective dates for policy changes
- Automatically validates salary records to prevent violations
This eliminated manual checks and reduced compliance risk at payroll creation.
2. Social Insurance Framework
Vietnam’s mandatory insurance system is one of the most complex areas of HR compliance. Our vHRMS supports:
- Separate contribution rules for employees and employers
- Contribution caps based on government reference levels
- Automatic calculation during payroll processing
- Support for policy changes over time
All calculations are embedded directly into salary workflows, ensuring consistency and transparency.
3. Progressive Personal Income Tax Engine
We implemented a progressive tax engine aligned with Vietnamese regulations, featuring:
- Multi-tier tax brackets
- Period-based tax rule management
- Automatic application of tax deductions
The system calculates tax precisely and consistently, removing dependency on external tools or manual spreadsheets.
4. Family-Based Tax Deductions and Dependent Management
To support family-based deductions, we developed a dedicated dependent management module that allows HR teams to:
- Register and manage dependent information
- Track validity periods
- Automatically apply deductions during tax calculation
We also enabled batch processing and standardized exports for tax authority submissions, making compliance faster and easier.
5. Overtime and Leave Compliance
Vietnam labor law defines different overtime coefficients depending on working days, weekends, holidays, and night shifts. Our system:
- Manages overtime coefficients centrally
- Automatically applies them during payroll calculation
- Supports statutory leave types defined by law
This ensures that employee compensation aligns with legal requirements without manual intervention.
6. Vietnam Holiday and Lunar Calendar Support
Unlike many countries, Vietnam observes holidays based on both solar and lunar calendars. We implemented:
- Official holiday management
- Automatic lunar-to-solar date conversion
- Annual holiday list generation
- Proper handling of compensatory leave days
This feature improved accuracy in attendance, leave tracking, and overtime calculations.
Payroll Automation and Validation
1. Salary Slip Hooks and Automation
We embedded Vietnam-specific logic directly into the payroll lifecycle using system hooks. When a salary slip is created or submitted, the system automatically:
- Calculates insurance contributions
- Applies tax deductions
- Validates minimum wage compliance
- Updates relevant salary components
This approach significantly reduced payroll processing time and eliminated common human errors.
2. Gross-to-Net and Net-to-Gross Calculations
HR teams often need to simulate salary scenarios. We developed a reverse calculation tool that allows users to:
- Input a desired net income
- Automatically calculate the required gross salary
- View a transparent breakdown of deductions
This feature improved negotiation accuracy and internal planning.
Government Reporting and Documentation
1. Mandatory Reports and Templates
Compliance does not stop at calculation. Vietnamese companies must submit standardized reports to government agencies. Our vHRMS supports:
- Monthly and adjustment reports for social insurance
- Personal income tax summaries
- Employee adjustment and benefit claim reports
All reports can be exported in official formats, ready for submission without manual reformatting.
2. Benefit Claim Management
We built a structured workflow to manage social insurance benefit claims, including:
- Claim type classification
- Eligibility calculation
- Supporting document management
- Approval workflows
This transformed a traditionally paper-heavy process into a digital, traceable workflow.
Quality Assurance and System Reliability
1. Automated Testing Strategy
Accuracy is non-negotiable in payroll systems. We implemented comprehensive automated tests to verify:
- Insurance calculations
- Tax logic and edge cases
- Overtime computation
- Data fixtures and payroll validations
This ensured long-term reliability, even as regulations evolve.
2. Scheduled Tasks and System Intelligence
The system includes automated background tasks that:
- Monitor dependent eligibility
- Remind HR teams of reporting obligations
- Prepare annual updates for holidays and policies
These features shift HR from reactive compliance to proactive governance.
Business Impact and Value Delivered
- Reduced Compliance Risk: By embedding regulations directly into system logic, the Vietnam-Compliant vHRMS significantly reduces the risk of non-compliance.
- Improved Operational Efficiency: Payroll, tax, and insurance processes that previously required manual work are now automated and standardized.
- Better Transparency and Trust: Employees gain clearer visibility into how their salary, insurance, and taxes are calculated, improving trust and engagement.
- Scalable Foundation for Growth: Built on open-source technology, the solution can evolve with business growth and regulatory change.
Conclusion
This project demonstrates FIX Partner’s approach to enterprise software: combining deep local regulatory understanding with modern, scalable technology. By building a Vietnam-compliant vHRMS on Frappe, we delivered more than a system; we delivered confidence, clarity, and control for HR and finance teams.
For organizations operating in Vietnam, compliance is not optional. With the right architecture and mindset, it can become a competitive advantage.
Contact FIX Partner to explore how a Vietnam-compliant vHRMS can support your business growth.