Vietnam’s 2025 Minimum Wage Update: What Foreign Employers Must Know
Vietnam’s 2025 Minimum Wage Update: What Foreign Employers Must Know
As of July 1, 2025, Vietnam has implemented two major changes that foreign employers must understand to remain compliant: a redrawn administrative map and updated regional minimum wage classifications.
While the wage rates set in July 2024 are still in effect, the restructuring of provinces has led to a reallocation of regions, meaning businesses in previously lower-wage areas may now fall into higher wage zones, and vice versa. This update affects how employers calculate salaries, insurance contributions, and labour-related costs.
Vietnam Reduces Its Provinces: From 63 to 34
In a landmark decision, Vietnam’s National Assembly approved the merger of local administrative units, reducing the number of provinces and centrally run cities from 63 to 34, effective June 12, 2025.
Why this matters:
Vietnam’s minimum wage is calculated by region, not by a single national rate. As the regional classification of provinces has changed, companies must reassess which wage level applies to their employees.
While the minimum wage amounts introduced in July 2024 remain the same, the areas covered under each wage tier (Region I–IV) have been reclassified. This could result in either increased or decreased labour costs for businesses depending on their location.
Updated Monthly Minimum Wage by Region
| Region | Previous | Current |
|---|---|---|
| Region I | VND 4,680,000 | VND 4,960,000 |
| Region II | VND 4,160,000 | VND 4,410,000 |
| Region III | VND 3,640,000 | VND 3,860,000 |
| Region IV | VND 3,250,000 | VND 3,450,000 |
These monthly minimum wages also translate into hourly wages ranging from VND 16,600 to VND 23,800, depending on the region.
What Provinces Are in Each Region (as of July 1, 2025)
Here is a breakdown of the regions and the provinces/cities they include after the administrative reorganization:
Region I (Highest wage tier)
Economically advanced urban centers and industrial hubs.
- Hanoi
- Ho Chi Minh City
- Hai Phong
- Da Nang
- Binh Duong (urban zones)
- Dong Nai (urban zones)
- Bac Ninh
- Bac Giang (some districts)
- Can Tho (central wards)
Region II
Major industrial provinces with growing infrastructure.
- Most areas of Binh Duong and Dong Nai (outside central wards)
- Can Tho (non-central districts)
- Quang Ninh
- Vinh Phuc
- Thai Nguyen
- Thua Thien Hue
- Hai Duong (urban areas)
- Long An (urban areas)
- Tay Ninh
Region III
Emerging industrial and agricultural zones.
- Khanh Hoa
- An Giang
- Kien Giang
- Dak Lak
- Lam Dong
- Thanh Hoa (urban areas)
- Nghe An (some districts)
- Hai Duong (rural areas)
- Long An (rural areas)
Region IV (Lowest wage tier)
Rural provinces and underdeveloped areas.
- Most mountainous and remote northern provinces (e.g. Lao Cai, Dien Bien, Ha Giang)
- Central highlands provinces not listed in Region III
- Mekong Delta provinces like Soc Trang, Tra Vinh, and Ben Tre
- Parts of Thanh Hoa and Nghe An (rural)
- Quang Binh, Quang Tri
- Ninh Thuan, Binh Thuan
Insurance & Contribution Caps: What’s Changed
| Contribution Type | Previous Cap | New Cap |
|---|---|---|
| Social Insurance | VND 36 million | VND 46.8 million |
| Health Insurance | VND 36 million | VND 46.8 million |
| Union Contribution Salary | VND 36 million | VND 46.8 million |
Why This Matters for Foreign Employers
If your company is employing staff or planning to expand into Vietnam, the 2025 changes to regional wage classifications carry direct implications for your operations. From a payroll perspective, labour costs may increase if your business location is now reclassified into a higher wage region. Beyond salary, HR teams must ensure compliance with minimum wage regulations and updated social, health, and unemployment insurance contribution caps. Additionally, if you’re using a PEO (Professional Employer Organisation) or EOR (Employer of Record) service to manage employment in Vietnam, it’s crucial that your provider reflects the new wage region assignments and statutory requirements in all employment and payroll processes.
Action Points for Foreign Businesses
To stay compliant and financially prepared, businesses should first verify which regional wage classification now applies to their business address or remote staff, especially in light of the new provincial structure. Salary calculations must be updated accordingly to align with the correct regional wage floor and the revised caps for social, health, and unemployment insurance contributions. Employment contracts should also be reviewed to ensure all compensation terms meet the updated legal minimums. For businesses without in-house legal or HR teams, partnering with a Vietnam-based PEO provider is a practical way to manage risk and ensure smooth adaptation to regulatory changes.
Need Help Hiring or Expanding in Vietnam?
Whether you’re just beginning your entry into the Vietnamese market or already have local operations, ATA Services Vietnam is here to support you every step of the way. We offer end-to-end solutions including company registration, representative office setup, and compliant hiring through PEO or EOR services. Our team also manages work permits and visa applications for foreign employees, ensuring full compliance with Vietnam’s evolving labour regulations. If you’re looking for a reliable partner to navigate these changes with confidence, get in touch with us for a consultation.
