Vietnam’s New Minimum Wage Effective from July 1, 2024

June 28, 2024 Posted by Vietnam Briefing Written by Dezan Shira & Associates Reading Time: 3 minutes

The new minimum wage in Vietnam, effective July 1, 2024, will impact various social insurance items calculated based on the statutory pay rate. Employers in Vietnam are advised to pay attention to the cost impact of the statutory pay rate and the minimum regional wage.

Updates to the Vietnam minimum wage from July 1, 2024

No	Current (2022) Change (6%)				New (2024) Change (6%)
	Per month		Per hour		Per month		Per hour
	VND	US$	VND	US$	VND	US$	VND	US$
	The exchange rate is 24,333				The exchange rate is 25,250
1	4,680,000	192.33	22,500	0.92	4,960,000	196	23,800	0.94
2	4,160,000	170.96	20,000	0.82	4,410,000	175	21,200	0.84
3	3,640,000	149.59	17,500	0.72	3,860,000	153	18,600	0.74
4	3,250,000	133.56	15,600	0.64	3,450,000	137	16,600	0.66

Comments on the market update:

Nguyen Vu Phuoc Hong, Manager of HR and Payroll at Dezan Shira & Associates Vietnam, notes that the change [in minimum wage] will impact multiple aspects that are calculated based on the statutory pay rate, including social insurance (SI), health insurance (HI), union fees, unemployment insurance (UI) (hereinafter “SHUI” to refer all four categories) and benefits from social insurance.

Have a question? Contact our HR and Payroll Team

The maximum social insurance salary, health insurance salary, trade union fee, and unemployment insurance (UI) are going to increase on July 1, 2024.

Hong also calls businesses’ attention to the cost effect of the statutory pay rate and the minimum regional wage. If the employees sign a labor contract with a net salary instead of a gross salary, the cost of SHUI will only affect the company’s costs, not the employee’s income. Therefore, along with the increase in SHUI contributions, employee benefits will also increase.

SHUI and trade union fee contributions

Items	From July 1, 2023 to June 30, 2024	From July 1, 2024	Note
The statutory pay rate	VND 1,800,000	VND 2,340,000	All Vietnam
The maximum social insurance salary	VND 36,000,000	VND 46,800,000	The maximum SI salary is 20 times the statutory pay rate.
The maximum health insurance salary	VND 36,000,000	VND 46,800,000	The maximum HI salary is 20 times the statutory pay rate.
The maximum trade union fees salary	VND 36,000,000	VND 46,800,000	The maximum trade union fee salary is 20 times the statutory pay rate.
The minimum regional wage
The maximum unemployment insurance salary – Region 1	VND 93,600,000	VND 99,200,000	The maximum UI salary is 20 times the regional wage
The maximum unemployment insurance salary – Region 2	VND 83,200,000	VND 88,200,000
The maximum unemployment insurance salary – Region 3	VND 72,800,000	VND 77,200,000
The maximum unemployment insurance salary – Region 4	VND 65,000,000	VND 69,000,000

For the list of regional administrative units in Vietnam – Region 1-4, see our article here.

Background

Vietnam announced last year that it will raise the minimum wage by 6 percent starting July 1, 2024. The Vietnam General Confederation of Labor had advocated for a 6.48 to 7.3 percent increase, while the Vietnam Chamber of Commerce and Industry suggested a 4.5 to 5 percent hike would be better for businesses, resulting in a compromise between the two proposals.

This increase will mark the first minimum wage adjustment in two years. With an average annual inflation rate of 3.2 percent from 2012 to 2022 and inflation reaching 4.27 percent in the first 11 months of 2023, another wage hike may be needed soon.

During the pandemic, a pause in raising the minimum wage resulted in a real wage increase of just 0.7 percent for minimum wage workers, according to the International Labour Organisation.

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