Vietnam Plans 7.2% Rise in Regional Minimum Wages from 2026

In line with the Politburo’s Resolution No. 83-KL/TW dated 21 June 2024 on wage reform, the Government has submitted to the National Assembly for consideration the Draft Decree on Minimum Wages for Employees Working under Labor Contracts (“Draft”). Once adopted, the Draft will replace Decree No. 74/2024/ND-CP, which has been in effect since 1 July 2024.

The Draft proposes a 7.2% increase in regional minimum wages, raising monthly levels to VND 5,310,000 for Region I, VND 4,730,000 for Region II, VND 4,140,000 for Region III, and VND 3,700,000 for Region IV. This adjustment continues the Government’s policy of gradually improving employees’ living standards while ensuring wage growth keeps pace with socio-economic development.

In addition to the increase in wage levels, the Draft introduces an important structural change regarding the applicable scope of minimum wage areas. Following the restructuring of administrative units in July 2024, the classification will now be based on commune-level divisions rather than district-level divisions, thereby ensuring greater accuracy and consistency in the application of regional minimum wages.

The wage reform is expected to deliver tangible benefits for employees by raising incomes and supporting quality of life, while also contributing to broader social stability. For enterprises, however, the proposed increase will necessitate a careful review of payroll budgets, cost structures, and financial planning. Businesses are advised to prepare an adjustment roadmap in advance to ensure compliance and maintain operational efficiency.