Impact on Salary Components and Insurance Entitlements Resulting From 1 July 2026 Base Salary Increases
Vietnam’s statutory base salary increases to VND 2.53 million per month from 1 July 2026, following issuance of Decree 161/2026/ND-CP. The adjustment represents an approximate 8% increase and forms part of Vietnam’s Government’s wider social welfare and wage reform agenda.
Increase in Statutory Base Salary
Statutory Base Salary | From 1 July 2024 to 30 June 2026 | From 1 July 2026 | Remark |
VND 2.34 million/month | VND 2.53 million/month | Approx. 8% increase |
The base salary change has broad implications for payroll calculations, social insurance contribution caps, employee benefits, and employer cost obligations.
Impact on Social Insurance, Health Insurance and Trade Union Contribution Caps
Under Vietnam’s compulsory insurance framework, the maximum salary subject to Social Insurance (SI) and Health Insurance (HI) contributions equals 20 times the statutory base salary. Therefore, the increase in the base salary directly increases the contribution ceiling applicable to employers and employees.
Applicable Period | Maximum Salary Cap for SI/HI Contributions | Remarks |
1 July 2024 – 30 June 2026 | VND 46.8 million | Current statutory cap |
From 1 July 2026 onward | VND 50.6 million | Revised cap based on new base salary |
The revised cap increases contribution obligations for employers with higher paid employees. At the same time, employees contributing at the higher threshold may become eligible for higher long-term social insurance benefits and pension calculations.
For Trade Union Contributions, the updated base salary will impact on both employer and employee monthly contributions as below:
Applicable Period | Maximum amount contributed by employer (2% of employee’s insurance salary) | Maximum amount contributed by employee as union membership fee (0.5% of employee’s insurance salary and maximum 10% of base salary) |
1 July 2024 – 30 June 2026 | VND 936,000 | VND 234,000 |
From 1 July 2026 onward | VND 1,012,000 | VND 253,000 |
Key Social Insurance Benefit Adjustments
Several social insurance entitlement levels are directly linked to the statutory base salary. Accordingly, the increase effective from 1 July 2026 raises multiple employee welfare benefits.
Social Insurance Benefit | Current Level | From 1 July 2026 | |
1 | Daily recuperation allowance after sickness | VND 702,000 | VND 759,000 |
2 | One-time childbirth/adoption allowance per child | VND 4,680,000 | VND 5,060,000 |
3 | Daily recuperation allowance after maternity leave | VND 702,000 | VND 759,000 |
4 | One-time allowance for 5% reduction in working capacity | VND 11,700,000 | VND 12,650,000 |
5 | Additional allowance for each additional 1% reduction in working capacity | VND 1,170,000 | VND 1,265,000 |
6 | Monthly allowance for 31% reduction in working capacity | VND 702,000 | VND 759,000 |
7 | Additional monthly allowance for each additional 1% reduction in working capacity | VND 46,800 | VND 50,600 |
8 | Attendance/service allowance | VND 2,340,000 | VND 2,530,000 |
9 | One-time allowance for death due to occupational accident/disease | VND 84,240,000 | VND 91,080,000 |
10 | Daily rehabilitation allowance after treatment | VND 702,000 | VND 759,000 |
11 | Funeral allowance | VND 23,400,000 | VND 25,300,000 |
12 | Monthly survivorship allowance for each dependent | VND 1,170,000 | VND 1,265,000 |
Practical Implications for Employers and Employees
- Employers may experience increased payroll and insurance contribution costs, particularly for employees earning at or near the contribution ceiling.
- Employees participating in compulsory social insurance may experience higher monthly contributions and benefit from higher maternity, sickness, occupational accident, pension, and survivorship entitlements.
- Public-sector employees whose salary coefficients are tied to the statutory base salary will receive direct salary increases.
- The increase supports the Government’s broader objective of strengthening social welfare protection amid inflation and rising living costs.
Conclusion
The increase of Vietnam’s statutory base salary to VND 2.53 million per month from 1 July 2026 will significantly impact payroll administration, compulsory insurance contributions, and employee entitlement levels. Employers should proactively review payroll structures, insurance budgets, and employment cost forecasts to ensure compliance and proper financial planning, as well as inform this change to employees for their awareness. Meanwhile, employees and retirees are expected to benefit from stronger social welfare protection and higher statutory benefits under the revised framework.
For any further questions or assistance, please reach out to us at vietnam@alitium.com
********
This article is intended to provide an overview of recent updates and announcements. While it aims to present useful insights, it is important to note that the content shared here should not be considered as formal legal, tax or financial advice. For specific guidance on tax obligations or legal matters related to your business, we strongly recommend consulting with a qualified professional, such as a tax advisor or legal expert or directly reach out to us.
