Vietnam Raises Regional Minimum Wages: Decree 293/2025/ND-CP Takes Effect 1 January 2026
On 10 November 2025, the Vietnamese Government issued Decree 293/2025/ND-CP, increasing the regional minimum monthly wages for employees. Effective 1 January 2026, the new Decree replaces Decree 74/2024/ND-CP, reflecting impacts of inflation and cost of living management, supported by a policy push to support workers.
The increases range from VND 250,000 to VND 350,000 per month across the four wage regions, maintaining Vietnam’s differentiated regional wage framework that accounts for varying living costs and labour market conditions.
Regional Minimum Wages from 1 January 2026
|
Region |
Current Minimum Wage (until 31 December 2025) |
New Minimum Wage (from 1 January 2026) |
Increase |
|
Region I |
VND 4,960,000 |
VND 5,310,000 |
+ VND 350,000 |
|
Region II |
VND 4,410,000 |
VND 4,730,000 |
+ VND 320,000 |
|
Region III |
VND 3,860,000 |
VND 4,140,000 |
+ VND 280,000 |
|
Region IV |
VND 3,450,000 |
VND 3,700,000 |
+ VND 250,000 |
Hourly minimum wages also rise proportionately. For instance, Region I increases from VND 23,800 to VND 25,500 per hour, maintaining the same relative gap between regions.
Impact on Unemployment Insurance and Social Contributions
As Vietnam’s unemployment insurance (UI) contribution cap is linked to the regional minimum wage (20 × regional minimum salary), these increases will automatically raise the upper threshold for UI contributions and potential benefits.
From 1 January 2026, the maximum monthly salary base for UI contributions will adjust as follows:
|
Region |
Old Cap (2025) |
New Cap (from 2026) |
|
Region I |
VND 99,200,000 |
VND 106,200,000 |
|
Region II |
VND 88,200,000 |
VND 94,600,000 |
|
Region III |
VND 77,200,000 |
VND 82,800,000 |
|
Region IV |
VND 69,000,000 |
VND 74,000,000 |
This change affects both employers and employees, as UI contributions are calculated as 1% of the actual monthly salary (up to the maximum cap) for each party. While the impact per employee is modest, companies with will need to update payroll systems to reflect the new caps accurately, and determine the impact on budgets, particularly for labour-intensive sectors.
Implications for Employers
1. Payroll cost adjustments
The increase represents an average 6–7% rise in the wage floor, which will affect total compensation budgets and related benefits indexed to salary, including social insurance, health insurance, and unemployment insurance.
2. Regional compliance remains essential
Vietnam continues with its four-region system, meaning enterprises must apply the correct minimum wage based on the employee’s workplace location, and not the company’s head office address.
3. Contracts, allowances, and pay structures
Employers should review labour contracts and ensure total pay remains above the new thresholds, adjusting base salary and allowances where necessary.
4. Broader HR and budget planning
Given the change also lifts UI and related contribution caps, HR and finance teams should incorporate the new limits into 2026 payroll planning and budgeting.
While Decree 293/2025/ND-CP does not by itself signal an aggressive wage rise, it reinforces the Vietnamese Government’s focus on aligning wage floors with economic conditions, an approach that was previously relaxed somewhat during and after the Covid periods. For employers, early preparation will be key to maintaining competitiveness, compliance and internal cost-control heading into 2026.
For any further questions you may have, please reach out to us at vietnam@alitium.com
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