Vietnam Raises Minimum Wage in 2026 – What Should Businesses Prepare For?

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Vietnam Raises Minimum Wage in 2026 – What Should Businesses Prepare For?

Date: 2026.01.30

Starting from January 1, 2026, Vietnam will officially implement Decree No. 293/2025/NĐ-CP, which increases regional minimum wages nationwide.

This is a significant adjustment in wage policy that directly impacts personnel costs, financial planning, and employee welfare policies for all businesses operating in Vietnam.

1. New Regional Minimum Wage from 2026

According to Decree 293/2025/NĐ-CP, regional minimum wages will rise by an average of 7–8% compared to 2024.

Region	2024 Minimum Wage (VND/month)	2026 Minimum Wage (VND/month)	Increase (%)
Region I	4,960,000	5,310,000	+7.1%
Region II	4,410,000	4,730,000	+7.3%
Region III	3,860,000	4,140,000	+7.2%
Region IV	3,450,000	3,700,000	+7.2%

Hourly minimum wages are also adjusted accordingly to maintain a fair balance between workers’ rights and employers’ capabilities.

Source: Decree 293/2025/NĐ-CP

2. Objectives of the wage adjustment

The 2026 wage reform aims to:

– Ensure a basic standard of living for workers, especially after periods of inflation and rising living costs.

– Encourage productivity, motivate employees, and attract high-quality human resources.

– Align with Vietnam’s 2026–2030 socio-economic development goals, promoting sustainable growth and international integration.

It also reaffirms Vietnam’s commitment to the International Labour Organization (ILO) in improving working conditions and upholding fair labor standards.

3. Impacts on Businesses

🔹 Increased labor and insurance costs

The minimum wage serves as a basis for calculating social insurance, health insurance, and unemployment insurance.
This will inevitably raise overall personnel costs, particularly in labor-intensive sectors like manufacturing, garments, and electronics.

🔹 Effects on labor contracts and collective agreements

– Businesses must review all labor contracts to ensure no wages fall below the new minimum threshold.

– Collective labor agreements and appendixes should be updated for compliance.

– 2026 financial budgets must be revised to reflect new payroll and allowance costs.

🔹 Impacts on Bonuses and Welfare Systems

As wage levels rise, companies should restructure compensation, allowances, and benefits to maintain competitiveness and employee satisfaction.

4. How businesses can prepare

4.1. Stay legally updated

Review Decree 293/2025/NĐ-CP and the official list of applicable regions.

4.2. Review and adjust salary systems

Compare current wages with new standards to ensure compliance and competitiveness.

4.3. Update insurance and PIT calculations

Wage increases will affect social insurance and personal income tax contributions — plan accordingly.

4.4. Restructure HR policies

Consider performance-based or KPI-linked pay to balance cost optimization and productivity.

4.5. Invest in technology and automation

Adopt ERP or HRM systems to manage HR and payroll efficiently, especially for larger-scale operations.

5. Positive policy outlook

While short-term costs may rise, the adjustment brings long-term benefits to Vietnam’s business environment:

– Improved living standards for employees.

– Greater transparency in wage policies, making cost planning easier.

– Enhanced corporate image through compliance and social responsibility.

Conclusion

Decree 293/2025/NĐ-CP marks a key milestone in Vietnam’s 2026 labor policy.
All companies — domestic and foreign — should review and adjust their salary structures, benefits, and financial plans to remain compliant and competitive in a growing market.