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Practical guide for employers on the increase to the Minimum Basic Wage from 1 July 2023 and how it impacts salary (insurance) payments.

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Practical guide for employers on the increase to the minimum basic wage from 1 july 2023 and how it impacts salary (insurance) payments

Following the Resolution of the National Assembly on 11 November 2022 regarding the increase to the Minimum Basic Wage (base salary) from 1 July 2023, on 14 May 2023, the Government issued Decree 24/2023/ND-CP providing further details.

Accordingly, the Minimum Basic Wage will be raised to 1.8 million VND per month, an increase of 20.8% compared to the current Minimum Basic Wage of 1.49 million VND per month. The changes will take effect from 1 July 2023.

In this article, we look at the impacts of the increase to help employers (and employees) be aware of the changing elements and plan for an update in their payroll calculation.

Impacts on salary (insurance) payments by employers and employees

Although the Minimum Basic Wage is generally only applicable to Government employees (with multiple applied based upon their role/position), it is also used as a threshold for all employers upon which the maximum payments for certain insurances are calculated; therefore changes to the Minimum Basic Wage impacts all 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 2023 for employee payrolls:

InsurancesContribution BasisMaximum Monthly Cap
Up to 30 June 2023From 1 July 2023


Social Insurance (SI)20 x Minimum Basic Wage29,800,000 VND
(20 x 1,490,000 VND)
36,000,000 VND
(20 x 1,800,000 VND)
Health Insurance (HI)
Trade Union (TU)
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 employers/employees)

(*The Minimum Monthly Wage forms the basis for salary calculations and negotiations between commercial employers & employees, as evidenced in labour contracts, to ensure that employees are not paid less than the monthly minimum. It is also used as a threshold upon which the maximum payment for Unemployment Insurance is calculated. 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 areas of Hanoi, Ho Chi Minh City and Hai Phong, along with certain industrial areas of Binh Duong and Dong Nai).

All employers should ensure their payroll software and internal calculations are updated for all pay runs from 1 July 2023.

Impacts on Social Insurance benefits/allowances of employees

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

ItemsUp to 30 June 2023From 1 July 2023
Allowance of health recovery after pregnancy/sickness447,000 VND/day540,000 VND/day
One-time allowance when giving birth or adopting a child under 6 months old2,980,000 VND/child/time3,600,000 VND/child/time
The minimum pension1,490,000 VND/month1,800,000 VND/month
Funeral allowance (Received by relatives upon the death of the employee)14,900,000 VND/time18,000,000 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
745,000 VND/month

1,043,000 VND/month

900,000 VND/month

1,260,000 VND/month

One-time support for occupational accident or occupational disease:

  • Decrease by 5% of working capacity
  • Each additional percentage of decrease
7,450,000 VND/time

745,000 VND/time

9,000,000 VND/time

900,000 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

447,000 VND/month

29,800 VND/month

540,000 VND/month

36,000 VND/month

Monthly allowance for the employee suffering from occupational accidents and occupational diseases having a working capacity decrease of 81% or more1,490,000 VND/month1,800,000 VND/month
One-time support when the employee dies due to an occupational accident or occupational disease53,640,000 VND/time64,800,000 VND/time
Allowance for health recovery after occupational accident and disease:

  • Home care (25% of base salary)
  • Clinic/hospital care (40% of base salary)
372,500 VND/day

596,000 VND/day

450,000 VND/day

720,000 VND/day

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 –

Matthew Lourey – Managing Partner –

Updated on June 23, 2023

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