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Decree 73 increases the Minimum Basic & Monthly Wages in Vietnam.

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Decree 73 increases the minimum basic & monthly wages in vietnam

The Vietnamese Government has recently issued Decree 73 formally approving increases to the Minimum Basic Wage and Minimum Monthly Wage, effective from 1 July 2024. This article examines the impacts of these increases to help employers and employees understand the changes and plan for updates in their payroll calculations.

It is essential to distinguish “Minimum Monthly Wage” from “Minimum Basic Wage”, terms that are often confused. The Minimum Basic Wage is used by government organisations as a foundation for payroll calculations, allowances and other salary matters. It also serves as a threshold for calculating the maximum payments for Social Insurance, Health Insurance, and Trade Union contributions.

In contrast, the Minimum Monthly Wage forms the basis for salary calculations and negotiations between commercial employers & employees, as evidenced in labour contracts. It is also used as a threshold for calculating the maximum payment for Unemployment Insurance (UI). Minimum Monthly Wages are applied at different rates across various ‘zones’ to align with the differing economic and living standards of each area.

Minimum Basic Wage

Following the Resolution of the National Assembly on 10 November 2023 regarding the increase to the Minimum Basic Wage (base salary) from 1 July 2024, the Government issued Decree 73/2024/ND-CP dated 30 June 2024 formally approving the increase and providing further details.

Although the Minimum Basic Wage is generally only applicable to Government employees (with variations based on their role/position), it is also used as a threshold for all employers and employees upon which the maximum payments for certain insurances are calculated. Therefore, changes to the Minimum Basic Wage impacts all employers and employees.

Impacts on salary (insurance) payments by employers and employees

In particular, an increase in Minimum Basic Wage will result in an increase in the maximum caps for calculating Social Insurance, Health Insurance, and Trade Union payments, consequently increasing the potential payments by both employees and employers.

The below table indicates the maximum caps that apply to Insurance calculations during 2024 for employee payrolls:

InsurancesContribution BasisMaximum Monthly Cap
Up to 30 June 2024From 1 July 2024
Social Insurance (SI)20 x Minimum Basic Wage36,000,000 VND

(20 x 1,800,000 VND)

46,800,000 VND

(20 x 2,340,000 VND)

Health Insurance (HI)
Trade Union (TU)
Union Fee (UF)20 x Minimum Basic Wage

But maximum contribution amount is capped at 10% of the Minimum Basic Wage

36,000,000 VND

(20 x 1,800,000 VND

Maximum contribution amount: 180,000 VND/employee/month

46,800,000 VND

(20 x 2,340,000 VND)


Maximum contribution amount: 234,000 VND/employee/month

Unemployment Insurance (UI)20 x Minimum Monthly Wage* (of the Zone the employer is in)93,600,000 VND (20 x 4,680,000 VND) (Applicable to Zone 1 employer/ employee)

Similar to Zone 1, it shall be 83,200,000 VND, 72,800,000 VND and 65,000,000 VND for Zone 2, Zone 3 and Zone 4 respectively.

99,200,000 VND (20 x 4,960,000 VND) (Applicable to Zone 1 employer/employee)

Similar to Zone 1, it shall be 88,200,000 VND, 77,200,000 VND and 69,000,000 VND for Zone 2, Zone 3 and Zone 4 respectively.

(*Minimum Monthly Wages are applied at different rates using “zones” that are aligned for areas with different economic and living standards. Eg. Zone 1 covers areas including urban/ suburban areas of Hanoi, Ho Chi Minh City, Quang Ninh, Hai Phong, Binh Duong, Dong Nai and Ba Ria – Vung Tau)

Impacts on Social Insurance benefits/allowances of employees

As a result, the increase in Minimum Basic Wage will also result in an increase in Social Insurance benefits/allowances (paid by Social Insurance authorities) of employees, as detailed in the below table, which shows the comparison of benefits under the current and new Minimum Basic Wages.

ItemsUp to 30 June 2024From 1 July 2024
Allowance of health recovery after pregnancy/sickness540,000 VND/day702,000 VND/day
One-time allowance when giving birth or adopting a child under 6 months old3,600,000 VND/child/time4,680,000 VND/child/time
The minimum pension1,800,000 VND/month2,340,000 VND/month
Funeral allowance (Received by relatives upon the death of the employee)18,000,000 VND/time23,400,000 VND/time
Monthly survivor allowance (Received by relatives upon the death of the employee)

  1. In case a relative does have a direct caregiver
  2. In case a relative does not have a direct caregiver
900,000 VND/month

1,260,000 VND/month

1,170,000 VND/month

1,638,000 VND/month

One-time support for occupational accident or occupational disease:

  • Decrease by 5% of working capacity
  • Each additional percentage of decrease
9,000,000 VND/time

900,000 VND/time

11,700,000 VND/time

1,170,000 VND/time

Monthly allowance for occupational accident or occupational disease (for employees whose working capacity is reduced by 31%)

For every additional 1% decrease in working capacity, the employee will receive an additional 2% of the base salary

540,000 VND/month

36,000 VND/month

702,000 VND/month

46,800 VND/month

Monthly allowance for the employee suffering from occupational accidents and occupational diseases having a working capacity decrease of 81% or more1,800,000 VND/month2,340,000 VND/month
One-time support when the employee dies due to an occupational accident or occupational disease64,800,000 VND/time84,240,000 VND/time
Allowance for health recovery after occupational accident and disease:

  • Home care (25% of base salary)
  • Clinic/hospital care (40% of base salary)
450,000 VND/day

720,000 VND/day

585,000 VND/day

936,000 VND/day

Minimum Monthly Wage

Effectively from 1 July 2024, the Minimum Monthly Wage has increased by 6% compared to the provision of Decree 38/2022/ND-CP as following:

ZONEMinimum Monthly WageIncrease
Valid until 30 June 2024Valid from 1 July 2024
Zone I4,680,0004,960,000280,000
Zone II4,160,0004,410,000250,000
Zone III3,640,0003,860,000220,000
Zone IV3,250,0003,450,000200,000

The Minimum Hourly Wage is the lowest wage as the basis for contracting and paying salary for employees applying the form of hourly pay, ensuring the salary according to the job or title of the employee working for an hour and completing the agreed labour or work norms must not be lower than the Minimum Hourly Wage. Accordingly, the Minimum Hourly Wage will be applicable from 1 July 2024 as below:

ZONEMinimum Hourly Wages (VND/hour)Increase
Valid until 30 June 2024From 1 July 2024
Zone I22,50023,8001,300
Zone II20,00021,2001,200
Zone III17,50018,6001,100
Zone IV15,60016,6001,000

Ensure employees are not paid below the monthly minimums

The lowest salary for any commercial agreement between an employee and an employer must be the minimum wage rate; as a result, the employers are required to increase salary for their employes who are receiving the monthly salary according to the Minimum Monthly Wage.

Increase UI contributions

Given that the UI contribution is mandatory for all employees working at all companies at the applicable rate of 2%, for employer (1%) and employee (1%) on gross salary.

The maximum monthly UI contribution is capped at 20 times the Minimum Monthly Wage of the Zone. Therefore, from 1st July 2024 if an employee in Zone 1 earns greater than 20 x 4.960.000 VND, their UI contribution is capped at 992,000 (1% x 99,200,000) for both the employer and employee contribution compared to 936,000 as stipulated in the Decree 38/2022/ND-CP dated 12 June 2022.

Recommendations & discussions

With the changes taking effect from 1 July 2024, it is crucial for companies to incorporate these adjustments into their budgeting processes. Employers are advised to:

  • Update their payroll software and internal calculations to align with new changes and properly reflect the maximum caps for Social Insurance contributions and related payment calculations from 1 July 2024.
  • Review to ascertain that the stated salaries in labour contracts remain in accordance with the changes and their respective zones.


If you need any assistance with these or any other matters in managing HR and Payroll compliance in Vietnam, to ensure you are compliant and protected in the market, our experts are ready to support.

Huynh Thi Bao Tran – Head of Payroll Services & HR Consulting –

Nguyen Ngoc Truc Phuong – Head of PEO and Payroll Services –

Rizwan Khan – Managing Partner –

Updated on July 13, 2024

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