The short answer: the 2026 regional minimum wage is already in force — and it reprices your entire payroll, not just entry-level salaries. Decree 293/2025/ND-CP (issued 10/11/2025, effective 01/01/2026, replacing Decree 74/2024) raised monthly minimums to VND 5,310,000 (Region I), 4,730,000 (Region II), 4,140,000 (Region III) and 3,700,000 (Region IV) — increases of VND 250,000–350,000, averaging 7.2%. Every contract below the new floor must be adjusted, and the ripple runs through SI contributions, overtime rates and processing contracts.
What changed on 01/01/2026
Article 3 of Decree 293/2025 sets the new floors: Region I VND 5,310,000/month (up 350,000 from 4,960,000); Region II VND 4,730,000 (up 320,000 from 4,410,000); Region III VND 4,140,000 (up 280,000 from 3,860,000); Region IV VND 3,700,000 (up 250,000 from 3,450,000). Hourly minimums rose correspondingly: 25,500 / 22,700 / 20,000 / 17,800 VND. The applicable region follows the employer’s place of operation — multi-site employers apply each locality’s rate, and industrial-zone employers spanning regions apply the highest. Employers in renamed or split localities temporarily keep the pre-change rate until new rules issue.
The ripple: SI, overtime and contracts
Three knock-on effects matter more than the headline number. First, social insurance contributions: salaries adjusted upward raise the SI contribution base, increasing both employer and employee SI costs. Second, overtime and night-work premiums are computed from the actual salary, so the increase compounds into overtime budgets. Third, long-term processing and outsourcing contracts priced on old labor costs are now loss-making at the margin — renegotiation clauses tied to statutory wage changes should be invoked early, with the decree as evidence.
Scenario planning for labor-intensive employers
Do not stop at compliance — model three scenarios. Scenario A (absorb): quantify the full payroll delta including SI and overtime, and check margin impact by product line. Scenario B (productivity): pair the wage increase with measured output targets, automation of the most labor-dense steps, and shift rebalancing. Scenario C (pass-through): renegotiate unit prices with customers using the statutory increase as the objective basis — most B2B contracts in Vietnam accept wage-index adjustments when documented. Whatever the mix, update pay scales, collective agreements and bonus regulations so the new floor does not silently compress your internal wage differentials.
What the law does not require
Vietnamese law sets the floor; it does not mandate annual across-the-board raises. An employer that already pays above the new minimum has no duty to raise further because of the decree — but must still ensure no employee’s contractual salary sits below the applicable regional floor, and should review whether the increase has flattened differentials between grades, which is a retention risk even when it is not a legal violation.
Checklist
- Verify every employee’s contractual salary against the new regional floor from 01/01/2026.
- Recalculate the SI contribution base and overtime budgets on the adjusted salaries.
- Update pay scales, salary tables and collective agreements; protect grade differentials.
- Invoke price-adjustment clauses in processing contracts, citing Decree 293/2025.
- Model absorb / productivity / pass-through scenarios before deciding the mix.
Frequently asked questions
Must we raise everyone’s salary because the minimum rose?
No — only salaries below the new regional floor must be raised to at least the floor. But review grade differentials, which the increase may have compressed.
Which region applies to a multi-site company?
Each unit applies the minimum of its operating locality; industrial-zone employers spanning regions apply the highest rate.
Does the increase affect SI contributions?
Yes. Upward salary adjustments raise the SI contribution base under the Social Insurance Law, increasing costs for both employer and employee.
Can we renegotiate processing prices because of the wage hike?
Where contracts contain adjustment clauses for statutory changes, yes — invoke them early with the decree as the objective basis.
Is an annual raise mandatory in Vietnam?
No. The law mandates the floor, not annual raises. The commercial question is retention, not compliance.
Facing the 2026 wage floor? FLAT Law Firm models the payroll impact and updates your pay scales and contracts — before the increase hits your margins.
This article has been quality-reviewed by the FLAW AI Legal Council