The minimum wage is a "floor" that an enterprise may not pay below. Each time the floor rises, it triggers a series of tasks: checking employees' pay, adjusting the salary scale and recalculating insurance costs. This article helps you do each step correctly under Decree 293/2025/NĐ-CP, effective from 01/01/2026.
The four regional minimum wage levels for 2026
| Region | Per month (VND) | Per hour (VND) |
|---|---|---|
| Region I | 5.310.000 | 25.500 |
| Region II | 4.730.000 | 22.700 |
| Region III | 4.140.000 | 20.000 |
| Region IV | 3.700.000 | 17.800 |
Decree 293/2025 replaces Decree 74/2024, with an average increase of about 7.2%. Region I alone rises from 4,960,000 to 5,310,000 VND per month. Under Article 91 of the 2019 Labor Code, the minimum wage is the lowest wage paid to a person doing the simplest work under normal working conditions, set by region and fixed by the month and the hour.
How to determine which region an enterprise belongs to
The list of localities in each region is in the Appendix to Decree 293/2025. After provinces and cities reorganized their administrative units, this list is looked up by the new commune-level administrative unit. The rules are:
- The rate of the locality where the enterprise operates applies. The address where the employee actually works is the basis, not the business registration address.
- Enterprises with branches or units in several regions: each unit applies the minimum of the region where that unit operates.
- A locality that changes its name or is split: apply the rate of the corresponding new locality as guided in the decree.
- Industrial zones or export processing zones spanning several localities: check each specific address separately, because the name of the zone does not determine the region.
Keep a screenshot of the lookup table or an extract of the appendix you used, in case an inspection asks for an explanation.
What does the minimum wage affect?
| Item | Effect |
|---|---|
| Pay to employees | May not be lower than the regional minimum |
| Probation pay | At least 85% of the job's wage, but the job's wage may not be below the regional minimum |
| Salary is the basis for insurance payment | Must be checked against the lowest level under the guiding regulations |
| Unemployment insurance ceiling | 20 times the regional minimum wage (2025 Employment Law) |
| Salary scale and pay table | Must be reviewed so that the lowest grade is not below the new level |
| Cost of supply and service contracts | The unit price for labor services is usually adjusted accordingly |
A 6-step review process when the minimum wage rises
- Make a list of all employees with their actual work location and current pay.
- Assign a region to each person based on the decree's appendix.
- Filter those paid below the new minimum, both monthly pay and hourly pay for part-time workers.
- Adjust contracts or sign an addendum raising pay, stating clearly that it takes effect from 01/01/2026.
- Update the salary scale and send an internal notice.
- Recalculate insurance and trade union fee costs on the new payroll fund.
Enterprises do not need to raise pay for all employees when the minimum wage rises. However, if the salary scale has a relationship between grades, raising only the lowest grade while leaving higher grades unchanged can cause "pay compression" and dissatisfaction.
Common mistakes found in inspections
- Paying at the old regional rate after the effective date.
- Using the wrong region when a factory relocates or adds a workshop.
- Folding irregular allowances into pay to "reach" the minimum while the contract clearly states the allowance is non-regular.
- Forgetting to adjust the hourly rate for part-time workers.
- Not keeping records proving the applicable region.
Link to the cost of outsourced services
For enterprises hiring labor through a supplier or a labor supply and leasing service, a higher regional minimum raises the unit labor price. State the price adjustment mechanism in the contract from the start. The article on how to calculate labor hire costs by the hour, shift and month gives detailed guidance on how the unit price is built up.
Frequently asked questions
What is the regional minimum wage for 2026? Under Decree 293/2025/NĐ-CP: Region I 5,310,000; Region II 4,730,000; Region III 4,140,000; Region IV 3,700,000 VND per month, applicable from 01/01/2026.
If a company is headquartered in Ho Chi Minh City but its factory is in another province, which region applies? The one for the locality where the employee actually works. Each branch or factory applies the rate of the locality where that unit operates.
Does the minimum wage include allowances? The pay for someone doing the simplest work under normal conditions may not be lower than the minimum. Whether allowances count toward this level must be assessed under current guidance and the regular nature of the allowance.
Must an employer raise everyone's pay when the minimum wage rises? No. The enterprise is required to adjust only for employees paid below the new minimum, but should review the salary scale to keep it balanced.
Figures follow Decree 293/2025/NĐ-CP at the time of writing (10/2026); enterprises should check the current text before applying it.