📢 OFFICIAL INCREASE IN REGIONAL MINIMUM WAGES FROM 1 JANUARY 2027: WHAT SHOULD EMPLOYERS ADJUST?

📌 Regional minimum wages will increase by up to VND 390,000 per month. Beyond payroll adjustments, employers should also review employment contracts, compulsory insurance contributions and personnel budgets for 2027.

Effective 1 January 2027, regional minimum wages will increase across all four regions under Government Decree No. 399/2026/ND-CP.

For employers, this is more than a routine update to minimum wage rates. The changes may affect:

• 💰 Payroll expenses and personnel budgets;
• 📄 Employment contracts and salary agreements;
• 🛡️ Salary levels used as the basis for compulsory insurance contributions;
• 📊 Payroll schedules, remuneration policies and financial plans for 2027.

How much will minimum wages increase? Are employers required to increase salaries for all employees? What preparations should be made before 1 January 2027?

Below are the key matters employers should consider.

📊 1. NEW REGIONAL MINIMUM WAGE RATES EFFECTIVE 1 JANUARY 2027

Under Decree No. 399/2026/ND-CP, the monthly minimum wage rates for all four regions will be adjusted as follows:

Unit: VND per employee per month.

⏱️ Revised Hourly Minimum Wage Rates

The hourly minimum wage is particularly relevant to employees remunerated on an hourly basis.

🏢 2. WHICH REGIONAL MINIMUM WAGE RATE SHOULD AN EMPLOYER APPLY?

The applicable minimum wage is determined based on the location where the employer operates, rather than solely on the address of its registered head office.

Employers should consider the following circumstances:

📍 Scenario 1 – Operations in a Single Location

An employer operating in a particular region must apply the minimum wage rate prescribed for that region.

📍 Scenario 2 – Multiple Branches or Operating Units

Each branch or operating unit must apply the minimum wage rate applicable to its respective location.

📍 Scenario 3 – Operations in Industrial Parks, Export Processing Zones or Economic Zones Covering Multiple Administrative Areas

Where an operating area extends across locations subject to different minimum wage rates, the employer must apply the highest applicable rate.

📍 Scenario 4 – Changes in Administrative Names or Boundaries

The applicable minimum wage must be determined in accordance with the relevant transitional provisions of the Decree.

💼 3. MUST EMPLOYERS INCREASE SALARIES FOR ALL EMPLOYEES FROM 1 JANUARY 2027?

An increase in the regional minimum wage does not automatically require employers to increase salaries for all employees.

Under the applicable regulations, the monthly minimum wage represents the lowest salary that may be agreed upon and paid to an employee who works the full normal working hours in a month and fulfils the agreed labour productivity standards or job requirements.

Employers should therefore distinguish between the following situations:

✅ Employees whose contractual salary for their job or position is below the new minimum wage

Employers must review and adjust these salaries to ensure that they are not lower than the applicable minimum wage.

✅ Employees whose salaries already exceed the new minimum wage

Employers are not automatically required to increase these salaries by the same percentage as the regional minimum wage increase, unless otherwise required by an applicable agreement, internal policy or commitment.

🛡️ 4. WILL THE MINIMUM WAGE INCREASE AFFECT COMPULSORY INSURANCE CONTRIBUTIONS?

Potentially, but not every case will result in higher insurance contributions.

Employers should distinguish between:

• 💰 Regional minimum wages prescribed under labour legislation;
• 🛡️ Salaries used as the basis for compulsory Social Insurance (SI), Health Insurance (HI) and Unemployment Insurance (UI) contributions under the relevant regulations.

When regional minimum wages increase, employers should review cases where the salary used as the insurance contribution base is relatively low, particularly for positions with salaries close to the statutory minimum.

📌 Two Situations Requiring Attention

Scenario 1: The salary for the employee’s job or position is below the new minimum wage.

The employer must adjust the salary as required and assess whether the salary used as the basis for compulsory insurance contributions also needs to be updated.

Scenario 2: Both the employee’s salary and the salary used as the insurance contribution base already comply with the applicable requirements.

The employer is not automatically required to increase insurance contributions solely because the regional minimum wage has been revised.

📄 5. SHOULD EMPLOYERS AMEND EMPLOYMENT CONTRACTS AND REMUNERATION POLICIES?

Under Decree No. 399/2026/ND-CP, employers are responsible for reviewing the terms of employment contracts, collective labour agreements and relevant internal policies and regulations to make appropriate amendments or supplements.

Key areas for review include:

📑 Employment Contracts

Review the agreed salary for each job or position. Where contractual amendments are required, employers should follow the prescribed procedures for mutually agreed amendments or supplements.

💼 Salary Scales, Salary Tables and Remuneration Policies

Review minimum salary levels, job grading principles and the remuneration arrangements currently in place.

⏱️ Overtime and Night-Work Pay

Ensure that these entitlements continue to be provided in accordance with applicable regulations and are not unlawfully reduced.

📌 More Favourable Employee Entitlements

Lawfully agreed benefits and entitlements that are more favourable to employees should continue to be honoured, unless the parties agree otherwise in compliance with applicable law.

📈 6. HOW COULD PERSONNEL COSTS CHANGE IN 2027?

The increase in regional minimum wages may result in higher personnel costs, particularly for labour-intensive enterprises or those employing large numbers of workers whose salaries are close to the statutory minimum.

Illustrative example:

An enterprise operating in Region I employs 100 workers, each receiving a monthly salary of VND 5,310,000 for their respective job.

If the enterprise adjusts their salaries to the new minimum of VND 5,700,000 per month:

This example reflects only the increase in basic salaries for 100 employees. It excludes compulsory insurance contributions, other employee benefits and any additional effects arising from the enterprise’s own remuneration policies.

📌 For manufacturing enterprises employing hundreds or thousands of workers, conducting a review before the end of 2026 will support more effective personnel budgeting and cost forecasting for 2027.

⚠️ 7. COMMON MISTAKES EMPLOYERS SHOULD AVOID

When implementing the new regional minimum wage rates, employers should avoid the following common mistakes:

• ❌ Continuing to apply the previous minimum wage rates after 1 January 2027;
• ❌ Applying an incorrect regional rate to factories, branches or business locations;
• ❌ Failing to review employment contracts specifying salaries below the new minimum wage;
• ❌ Assuming that every employee must receive the same percentage salary increase;
• ❌ Failing to assess the impact on salaries used as the basis for compulsory insurance contributions;
• ❌ Adjusting salaries without updating the corresponding employment records and payroll schedules;
• ❌ Failing to forecast the impact on personnel budgets and operating expenses.

These mistakes may result in salary discrepancies, additional insurance obligations or difficulties when reconciling employment records and providing explanations to the relevant authorities.

✅ 8. WHAT SHOULD EMPLOYERS PREPARE BEFORE 1 JANUARY 2027?

MBA Auditing Firm recommends that enterprises undertake the following five-step review:

1️⃣ Determine the Applicable Region

Review the locations of the head office, branches, factories and other units employing workers.

2️⃣ Review the Employee List

Identify employees whose salaries for their jobs or positions fall below the new minimum wage.

3️⃣ Review Employment Contracts and Remuneration Policies

Identify necessary amendments to employment contracts, salary scales, salary tables, remuneration policies and related agreements.

4️⃣ Assess the Impact on Compulsory Insurance

Review salaries used as the basis for compulsory insurance contributions and identify cases requiring updates under the applicable regulations.

5️⃣ Prepare the 2027 Personnel Cost Budget

Estimate additional costs and update payroll budgets, business plans and cash flow forecasts accordingly.

💡 MBA AUDIT’S PERSPECTIVE

An increase in regional minimum wages involves more than changing a figure on the payroll.

For enterprises, particularly manufacturing companies, foreign-invested enterprises (FDI enterprises) and labour-intensive businesses, this is also an appropriate time to review remuneration policies, employment records and related personnel costs.

Proactively assessing the impact before 1 January 2027 will help enterprises:

• ✅ Ensure compliance with statutory wage requirements;
• ✅ Minimise errors in determining compulsory insurance obligations;
• ✅ Improve personnel cost forecasting and budgeting;
• ✅ Maintain consistency among employment contracts, payroll records, insurance documentation and accounting records.

🤝 MBA AUDIT – SUPPORTING YOUR BUSINESS

Has your enterprise reviewed the regional minimum wage requirements applicable from 2027?

MBA Auditing Firm provides support in the following areas:

• 📌 Reviewing remuneration policies and employment records;
• 📌 Reviewing salaries used as the basis for compulsory insurance contributions;
• 📌 Reconciling payroll schedules, personnel expenses and accounting records;
• 📌 Advising on payroll accounting, Personal Income Tax (PIT) and compulsory insurance matters;
• 📌 Assisting enterprises in preparing for the implementation of the new requirements from 1 January 2027.

📚 Legal References

• Government Decree No. 399/2026/ND-CP dated 2 November 2026, prescribing minimum wage rates for employees working under employment contracts, effective from 1 January 2027.
• Government Decree No. 293/2025/ND-CP dated 10 November 2025, which ceases to be effective from 1 January 2027.
• The Labour Code and other relevant legal regulations.

This article provides general information on applicable legal requirements. Their implementation should be assessed based on each enterprise’s operating locations, remuneration arrangements, employment contracts and actual records.