Legal basis: Decree No. 293/2025/ND-CP

On 10 November 2025, Decree No. 293/2025/ND-CP was promulgated, prescribing the minimum wage applicable to employees working under labor contracts. This Decree takes effect from 1 January 2026 and introduces a substantial adjustment ranging from VND 250,000 to VND 350,000 per month, equivalent to an average increase of 7.2% compared to the current provisions under Decree No. 74/2024/ND-CP.

This adjustment of the minimum wage is intended not only to ensure the minimum living standards of employees, but also to promote the harmonization of interests between enterprises and employees, in line with the recent economic growth rate and prevailing price levels.

1. Key provision: Minimum wage rates applicable from 1 January 20266

Under Decree No. 293/2025/ND-CP, the minimum wage is classified into four regions based on the socio-economic development conditions of each locality. The regulation stipulates both monthly and hourly minimum wage rates, providing enterprises with flexibility in selecting appropriate wage payment methods.

Monthly and hourly minimum wage rates for 2026 by region:

• Region I: VND 5,310,000 per month – VND 25,500 per hour
• Region II: VND 4,730,000 per month – VND 22,700 per hour
• Region III: VND 4,140,000 per month – VND 20,000 per hour
• Region IV: VND 3,700,000 per month – VND 17,800 per hour

Region I continues to have the highest minimum wage as it encompasses major economic and commercial centers, characterized by a high concentration of labor and higher living costs compared to the other regions.

2. Minimum wage increase compared to 2025

Compared to the 2025 minimum wage rates, the increases are allocated as follows:

• Region I: increase of VND 350,000 per month
• Region II: increase of VND 320,000 per month
• Region III: increase of VND 280,000 per month
• Region IV: increase of VND 250,000 per month

For hourly minimum wages, the increase ranges from VND 1,200 to VND 1,700 per hour, depending on the region.

This adjustment reflects a balance between the payment capacity of enterprises and the need to improve employees’ minimum income in the context of fluctuations in consumer prices and living costs.

3. Applicable subjects under Decree No. 293/2025/ND-CP

The new Decree applies to two principal groups:

• Employees
  • All individuals working under labor contracts in accordance with the Labor Code.
  • Including indefinite-term contracts, fixed-term contracts, and contracts for specific jobs or seasonal work.
• Employers

• • Enterprises established under the Law on Enterprises;
  • Agencies, organizations, and cooperatives;
  • Households and individuals employing workers;
  • Organizations and individuals involved in the implementation of minimum wage regulations.

The Decree emphasizes that any entity employing workers under labor contracts must comply with the new minimum wage rates from 1 January 2026.

4. Method for determining minimum wage regions

An important provision concerns the rules for determining the regional classification applicable to an enterprise. This is particularly significant for enterprises with multiple branches or those located within large industrial zones.

According to Decree No. 293/2025/ND-CP:

1. Enterprises operating in a given region shall apply the minimum wage rate applicable to that region.
2. Branches located in different regions with varying minimum wage levels shall apply the minimum wage rate of the region in which each branch is situated.
3. Enterprises located in industrial zones, export processing zones, high-tech zones, or digital technology zones that span multiple minimum-wage regions
   → Apply the highest applicable minimum wage rate.
4. Localities that are renamed or administratively divided
   → The previous minimum wage rate shall be temporarily applied until further guidance is issued by the Government.
5. Localities newly established from multiple existing areas
   → Apply the highest minimum wage rate among the constituent localities.

The detailed list of localities classified under Regions I, II, III, and IV is specified in the Annex attached to the Decree.

5. How should the minimum wage be applied in compliance with the regulations?

5.1. When paying monthly wages

The monthly wage paid to an employee who works the full normal working hours and meets the prescribed labor standards must not be lower than the monthly minimum wage.

5.2. When paying hourly wages

Enterprises that choose to pay wages on an hourly basis must ensure that:

• The wage paid for one working hour
  → Must not be lower than the hourly minimum wage corresponding to the applicable region.

5.3. When paying wages on a weekly, daily, product-based, or contractual basis

Enterprises must convert the wage into a monthly or hourly equivalent for comparison with the applicable minimum wage.

• Conversion of monthly wages:
  • Weekly wage × 52/12
  • Or: Daily wage × the number of normal working days in the month
  • Or: Product-based/contractual wage corresponding to the normal working time of the month.
• Conversion of hourly wages:
  • Weekly or daily wage divided by the number of working hours
  • Product-based or contractual wage divided by the normal working hours required for completion.

Thereby ensuring that the converted wage is not lower than the new regional minimum wage.

6. What should enterprises do before Decree No. 293/2025/ND-CP takes effect?

To mitigate the risk of violations of labor laws, enterprises should undertake the following measures:

• Review and reassess the salary scale and payroll structure.
• Revise and adjust labor contracts (including salary levels, allowances, and notes on the applicable region).
• Recalculate the payroll fund and social insurance contribution costs.
• Update the wage payment regulations in the internal labor regulations and the collective labor agreement.
• Provide prior notice to employees regarding the adjusted levels.

These measures enable enterprises to comply with legal requirements and minimize the risk of administrative sanctions in the field of labor.

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