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Vietnam’s new regional minimum wage hike will increase an employer’s payroll obligation across the country. The statutory minimum wage is adjusted in accordance with Decree No. 293/2025/ND-CP replacing the previous minimum wage system. The seasonal increase of 7.2% about the previous minimum wage system, on average.
The transformation is especially relevant for foreign-invested enterprises, multi-national manufacturers, factories, and overseas enterprises that hire Vietnamese employees. The effect can impact employment costs well beyond wages alone, up to the level of insurance plans, overtime expenses, and other costs, to name a few.
New Regional Minimum Wage Rates
Vietnam is still continuing with the new minimum wage differences for four regional groups: South, Central, Northwest, and Northeast. New rules see the minimum monthly wage of VND 3.7 million to VND 5.31 million and the hourly wage of VND 17,800 to VND 25,500. Check the tabulated below.
| Region | Monthly Minimum | Hourly Minimum |
| Region I | VND 5,310,000 | VND 25,500 |
| Region II | VND 4,730,000 | VND 22,700 |
| Region III | VND 4,140,000 | VND 20,000 |
| Region IV | VND 3,700,000 | VND 17,800 |
Unemployment Insurance Costs Will Also Rise
The impact of payroll on Vietnam’s unemployment insurance system is one of the primary issues. The salary ceiling for contributions is based on 20 times the applicable regional minimum wage, so the higher the minimum wage in the area, the higher the maximum salary for the contributions.
For instance, the Region I ceiling is about VND 106.2 million per month. Employers need to, therefore, review the payroll calculation for managers and executives who earn at a higher rate to make sure to check if additional UI contributions will be applicable to them.
Overtime and Shift Pay Need Review
Statutory minimums have the potential to impact overtime and shift pay as well. Employers will be required to make sure that contractual hourly pay is not less than the new minimum rates.
The standard overtime rates continue to be 150% for overtime working hours during regular working days, 200 % for overtime working hours during rest days per week and 300 % for overtime working hours during public holidays or paid leave. Employers should evaluate their overtime policies, piece rate policies and starting level jobs to make sure payroll systems reflect a new baseline.
Update Salary Bands and Employment Contracts
When employees who are new to the workforce earn more with the raise, whereas more veteran workers still earn the same rate, it can spawn “salary compression”, or “salary stratification”. It is important that employers review their salary scales and progression bands to ensure consistency with this.
If contractual wages are less than the new statutory minimum, wages should be updated to payroll records and wage contracts. It is also recommended that salary levels be documented as well as completes any new consultation with employee representative organisations.
Four Steps Employers Should Take Now
Foreign employers are advised to conduct a Regional Classification audit to verify that each site is paying the proper classification minimum wage. Then, payroll staff and HR should determine if anyone has been impacted by the new rates and send out amended contracts if any workers require it.
It is now time for companies to update their ERP and payroll software along with unemployment insurance calculation and overtime formulas. Last but not least, HR and finance ought to look inside their pay structures to make certain that they don’t result in salary compression or compliance issues.
FAQs
How much is the new minimum wage raise for Vietnam?
With Decree No. 293/2025/ND-CP, Vietnam has issued an average wage increase in the regions by 7.2%, above the statutory minimum wage.
What is the lowest wage among the regions?
The monthly minimum in Region I is VND 5.31 million; and the hourly minimum is VND 25,500.
Is there a need for employers to modify their employment agreements?
Contract base wages showing on a paycheck that are below the new higher minimum wage in the applicable region should be adjusted for the employees.
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