Vietnam’s regional minimum wage increases approximately 7.2% effective January 1, 2026, under Decree 293/2025/ND-CP. If you operate in Region I (Hanoi, Ho Chi Minh City, Hai Phong, Da Nang), you’ll pay VND 5,310,000 (~USD 210) monthly minimums—a jump from VND 4,960,000 in 2025. Because regional minimum wage sets the legal floor for your job- or title-based wage (base salary component)—and drives overtime calculations, insurance contribution ceilings, and probation salary floors—this increase cascades through your entire payroll structure, making timely payroll system updates essential.
What Changed: Your 2026 Regional Wage Floors
Decree 293/2025/ND-CP replaces the prior Decree 74/2024/ND-CP and establishes four regional tiers effective January 1, 2026. Here’s what you’ll pay:
| Region | Key Locations | Monthly (VND) | Hourly (VND) |
|---|---|---|---|
| I | Hanoi, Ho Chi Minh City, Hai Phong, Da Nang | 5,310,000 (~USD 210) | 25,500 |
| II | Binh Duong, Dong Nai, Can Tho | 4,730,000 (~USD 187) | 22,700 |
| III | Provincial cities (Hai Duong, Khanh Hoa, Long An) | 4,140,000 (~USD 164) | 20,000 |
| IV | Rural districts | 3,700,000 (~USD 146) | 17,800 |
All rates increased approximately 7.2% from 2025 baselines. Why does this matter? Minimum wage isn’t just a starting point—it’s the floor for calculating overtime pay, insurance contributions, and probation salaries. Underpay by even VND 1, and you’re technically in violation.
Important distinction: Minimum wage differs from base salary. The regional minimum wage applies to your job- or title-based wage—the base salary component stated in labor contracts—not total gross compensation. Under Article 90 of the Labor Code 2019, total wages include base salary plus allowances and bonuses, but only the job/title-based wage must meet or exceed regional minimums. This distinction matters because the job-based wage also serves as the foundation for overtime calculations and social insurance contribution floors.
Minimum wage is one input into broader employment cost structures—for contract rules, overtime frameworks, and termination obligations, see Vietnam employment law and HR compliance for FDI companies.
Verify Your Facility’s Region: Administrative Restructuring Changes Classifications
Vietnam’s ongoing administrative restructuring has merged and reorganized numerous district- and commune-level administrative units. Decree 293/2025/ND-CP updates the regional wage classification appendix to reflect these changes—and some facilities may find themselves reclassified into a different wage region under the new administrative structure.
This isn’t theoretical. Companies with multiple facilities across provinces that merged face the most exposure. A factory that was previously Region III may now sit inside a Region II province, requiring immediate wage adjustments.
If your facility straddles regional boundaries—or your district merged into a different province—verify its classification against the Decree’s updated appendix:
- Identify your facility’s current province and district using updated administrative maps
- Cross-reference that location against Decree 293/2025/ND-CP’s regional appendix
- Apply the highest wage if your area merged multiple regions together
- Document everything with government references for audit defense
The “highest wage” rule: Industrial parks, export processing zones, high-tech zones, and concentrated digital technology zones that span two or more regions apply the highest regional minimum wage among all areas covered. In a mixed Region I/Region II zone, you apply Region I rates (VND 5,310,000).
Example: Your manufacturing plant was in a Region III district that merged into a Region II province. Starting January 1, 2026, you apply Region II minimums (VND 4,730,000) instead of Region III (VND 4,140,000)—an extra VND 590,000 (~USD 23) per employee monthly. Material for large facilities.
Uncertain about the new classification? Apply the higher rate while you verify. It’s cheaper than penalties from underpayment violations.
Three Downstream Impacts: Insurance, Overtime, and Probation
Minimum wage increases don’t just affect base pay. They cascade through three critical payroll elements.
Unemployment insurance contribution ceilings rise. UI contributions are capped at 20 times the Region I minimum wage, regardless of where the employer operates. In 2026, this ceiling rises from VND 99.2 million (~USD 3,920) to VND 106.2 million (~USD 4,200) nationwide under Decree 293.
Social insurance and health insurance ceilings stay the same. SI and HI contributions are capped at 20 times the reference level (VND 2,340,000/month), equaling VND 46.8 million (~USD 1,850) monthly. This cap didn’t increase in 2026—it’s tied to the reference level, not regional minimum wage. For full 2026 SHUI rate breakdowns and expat participation rules, see Vietnam social insurance 2026 rates, caps, and compliance framework.
For employees earning above VND 46.8 million/month, you contribute SI and HI only on the capped amount. UI contributions apply up to the new VND 106.2 million cap. This creates a regressive cost structure where employer contributions on high salaries are proportionally lower.
What does this mean for payroll configuration? Your system needs two separate ceiling parameters: VND 46.8 million for SI/HI (unchanged), and VND 106.2 million for UI (updated). Getting either wrong overstates or understates both employer costs and employee deductions. The interaction between wage floors and contribution ceilings affects gross-to-net calculations at every salary level—see the employer payroll costs and gross-to-net calculation guide for worked examples.
Overtime pay uses the employee’s actual hourly wage—not minimum wage—as the calculation base. Under Article 98 of the Labor Code 2019 and Decree 145/2020/ND-CP (Article 55), overtime multipliers apply to the employee’s actual contracted hourly rate: 150% for standard weekday overtime, 200% for weekends, and 300% for holidays.
How does this work in practice? Take a Region I employee earning VND 10,000,000/month on a 22-day, 8-hour schedule. Their actual hourly rate is VND 56,818. Holiday overtime pays VND 56,818 × 300% = VND 170,454/hour—not VND 76,500.
The regional minimum wage sets the floor for these calculations. No employee’s overtime rate can produce less than VND 25,500 × the applicable multiplier in Region I—meaning VND 38,250/hour minimum for weekday overtime, and VND 76,500/hour minimum for holidays. The 300% multiplier applies to all 11 mandatory public holidays—confirm the schedule in Vietnam’s 2026 public holidays and employer leave obligations.
Probation salaries can’t fall below the floor. Probation salaries must equal at least 85% of the contracted salary under Article 26 of the Labor Code 2019, but never below the regional minimum. The practical test is simple: calculate 85% of the contracted salary, then compare it to the regional minimum. Whichever is higher applies.
A Region II position with VND 10,000,000 contracted salary pays VND 8,500,000 during probation (85%). But a VND 5,000,000 position pays VND 4,730,000 (Region II minimum)—not VND 4,250,000 (85% of contract). The minimum wage wins. This distinction matters most for entry-level positions near the minimum wage floor, where the 2026 increase may force probation salary adjustments on existing contracts. Probation floors interact with contract type and duration—review Vietnam labor contract types, probation rules, and hiring compliance.
Expatriate compensation follows different calculation rules—confirm which employees fall under local minimums based on Vietnam work permit requirements and foreign employee compliance. For expats, insurance and overtime calculations use the contracted amount, not minimum wage floors.
In practice, most FDI firms already compensate well above minimum thresholds. The real expense impact comes from social insurance recalculations, not base wage violations. Still, verify nothing slips through payroll system gaps. Beyond multiplier rates, employers must also track daily, monthly, and annual overtime caps—including sector-specific 300-hour annual limits. See overtime and working hour rules for FDI employers for the complete framework.
Your Compliance Checklist: January 2026 and Beyond
The new minimum wage took effect January 1, 2026. If you haven’t implemented it, every underpaid payroll run puts you in violation. Here’s your priority action list:
Immediate (January 2026):
- Audit your December 2025 payroll against the new regional minimums. If any employee received less than the new floors, correct it immediately and pay back wages—retroactive liability accrues from January 1
- Verify each facility’s region classification against Decree 293’s updated appendix. Administrative mergers may have reclassified your location—check every province where you have employees
- Update payroll systems with both the new regional minimums and the new UI contribution ceiling (VND 106.2 million). Run test payroll to confirm overtime calculations use the correct base rates and insurance deductions reflect the right ceilings
This month:
- Recalculate UI contribution ceilings (now VND 106.2 million) for high-earning employees
- Document your wage implementation region-by-region—labor inspections expect this documentation
- Review any probation salaries from December: did they meet the minimum wage floor, not just 85% of the contracted salary?
Going forward—monitor PIT impacts: Vietnam’s amended Personal Income Tax Law (Law 109/2025/QH15, passed December 10, 2025) restructures tax brackets from seven to five tiers, with salary/wage provisions applying from the 2026 tax period (January 1, 2026). The full law takes effect July 1, 2026.
| Tax Rate | Old Bracket (2025) | New Bracket (2026) | Change |
|---|---|---|---|
| 5% | VND 0–5M | VND 0–10M | +VND 5M |
| 10% | VND 5–10M | VND 10–30M | Shifted higher |
| 15% | VND 10–20M | (Eliminated) | Consolidated |
| 20% | VND 20–35M | VND 30–60M | Shifted higher |
| 25% | VND 35–60M | (Eliminated) | Consolidated |
| 30% | VND 60–80M | VND 60–100M | Shifted higher |
| 35% | VND 80M+ | VND 100M+ | +VND 20M threshold |
For expatriate staff, the new PIT brackets interact with residency status and tax treaty provisions—see personal income tax finalization under the 183-day residency rules for expat-specific guidance.
Deduction changes (monthly):
| Deduction Type | 2025 | 2026 | Increase |
|---|---|---|---|
| Personal deduction | VND 11M | VND 15.5M (~USD 613) | +VND 4.5M (+41%) |
| Per dependent | VND 4.4M | VND 6.2M (~USD 245) | +VND 1.8M (+41%) |
Impact for lower-earning employees: Employees earning at the Region I minimum wage floor (VND 5.31 million) now fall entirely within the 5% bracket instead of reaching the 10% bracket, reducing their tax burden. But monitor bracket creep—mid-year wage increases may push some employees into higher brackets despite the lower rates. Watch for competitor salary adjustments aimed at attracting talent above the new minimum.
Expatriate note: These minimums apply to local hires and mixed-nationality teams under Vietnamese labor law. Expatriate compensation packages use contracted amounts for insurance and overtime calculations—but any local-hire components must comply with regional minimums.
Bottom Line
The approximately 7.2% increase across all four regions adds roughly VND 350,000 (~USD 14) per full-time employee monthly in Region I. For a facility with 100 employees, that’s VND 35 million (~USD 1,385) in additional monthly wage costs alone—before accounting for the downstream increases in SHUI contributions and overtime floors.
Wage compliance carries significant legal and financial risk. Underpayment violations trigger labor inspections, penalties, and reputational damage—your payroll systems must reflect the new minimums correctly. Beyond wages and SHUI, the minimum wage increase also affects trade union fee obligations calculated on the social insurance salary base—factor this into total cost projections.
Professional advice: Have qualified legal or HR advisors verify your facility classifications and payroll system configurations. Wage regulations change frequently, and compliance requirements vary by employment type and province.
Current as of March 2026. Vietnamese wage regulations are subject to change. Always consult Decree 293/2025/ND-CP and official government sources for the latest requirements.
Questions about your 2026 wage implementation? We walk FDI companies through compliance audits and payroll reviews across multiple regions.
