LEGAL UPDATE: NEW REGIONAL MINIMUM WAGE RATES FROM 1 JANUARY 2027
The Government has issued Decree No. 399/2026/ND-CP dated 2 November 2026, prescribing the statutory minimum wages applicable to employees working under labour contracts (the “Decree 399”). Decree 399 will take effect on 1 January 2027 and replace Decree No. 293/2025/ND-CP.
The key provisions of Decree 399 are summarised below.
1. New minimum wage rates and requirements for their application
1.1. New monthly and hourly minimum wage rates
Under Article 3 of Decree 399, the monthly and hourly minimum wage rates applicable to employees working under labour contracts are as follows:
| Region | Monthly minimum wage (VND/month) | Hourly minimum wage (VND/hour) |
|---|---|---|
| Region I | 5,700,000 | 27,400 |
| Region II | 5,080,000 | 24,400 |
| Region III | 4,450,000 | 21,400 |
| Region IV | 4,040,000 | 19,400 |
These rates apply to employees and employers falling within the scope of application of the Labour Code.
1.2. Principles for determining the applicable region
The applicable regional minimum wage is determined based on the location where the employer operates.
Where an employer has branches or business units operating in different regions, the minimum wage applicable to each branch or business unit is determined by reference to the region in which that branch or unit is located.
For industrial parks, export processing zones, high-tech parks, concentrated digital technology zones, special economic zones, free trade zones and high-tech agricultural zones that extend across areas subject to different regional minimum wage rates, the highest applicable regional minimum wage rate shall apply.
In cases where an administrative area is renamed, divided or merged, the regional minimum wage rate applicable to that area before the change will continue to apply until new regulations are issued by the Government. Similarly, where a newly established administrative area is formed from areas subject to different regional minimum wage rates, the highest applicable rate will apply until otherwise provided by the Government.
1.3. Application of monthly and hourly minimum wage rates
The monthly minimum wage rate applies to employees who are paid on a monthly basis and work normal working hours, provided that they fulfil the agreed work norms or duties.
The hourly minimum wage rate applies to employees who are paid on an hourly basis.
For employees paid on a weekly, daily, piece-rate or contractual basis, the wage converted into a monthly or hourly amount must not be lower than the applicable monthly or hourly minimum wage rate. Decree 399 provides the following conversion methods:
- Weekly wages: the weekly wage is multiplied by 52 and divided by 12 to determine the monthly equivalent.
- Daily wages: the daily wage is multiplied by the number of normal working days in a month to determine the monthly equivalent.
- Piece-rate or contractual wages: the wage payable for work performed during normal working hours is used as the basis for comparison.
- Hourly equivalent: the weekly or daily wage is divided by the corresponding normal weekly or daily working hours. For piece-rate or contractual work, the wage is divided by the normal working hours required to produce the relevant product or perform the relevant contractual work.
Employers should review their existing payroll arrangements to ensure that wages, when converted in accordance with the above methods, comply with the applicable minimum wage requirements.
1.4. Employers’ obligations when applying the new minimum wage rates
Employers are required to review employment contracts, collective labour agreements and internal regulations or policies to ensure compliance with Decree 399.
The adjustment of wages in accordance with the new minimum wage rates must not result in the removal or reduction of employees’ entitlements to overtime pay, night-work pay, in-kind allowances or other benefits prescribed by labour laws.
Where an employer has agreed with employees on more favourable wage or employment conditions than those prescribed by Decree 399, such agreed conditions shall continue to apply, unless the parties agree otherwise. These include, among others, wage arrangements providing for:
- At least 7% higher wages for employees performing jobs requiring vocational or technical training;
- At least 5% higher wages for employees performing arduous, hazardous or dangerous work; and
- At least 7% higher wages for employees performing especially arduous, hazardous or dangerous work, compared with jobs of equivalent complexity performed under normal working conditions.
2. Comparison between the new and current minimum wage rates
Compared with the minimum wage rates prescribed under Decree No. 293/2025/ND-CP, which has been effective since 1 January 2026, Decree 399 increases both monthly and hourly minimum wage rates in all four regions.
2.1. Monthly minimum wage rates
| Region | Current rate (VND/month) | New rate (VND/month) | Increase (VND/month) | Increase (%) |
|---|---|---|---|---|
| Region I | 5,310,000 | 5,700,000 | 390,000 | 7.34% |
| Region II | 4,730,000 | 5,080,000 | 350,000 | 7.40% |
| Region III | 4,140,000 | 4,450,000 | 310,000 | 7.49% |
| Region IV | 3,700,000 | 4,040,000 | 340,000 | 9.19% |
2.2. Hourly minimum wage rates
| Region | Current rate (VND/hour) | New rate (VND/hour) | Increase (VND/hour) | Increase (%) |
|---|---|---|---|---|
| Region I | 25,500 | 27,400 | 1,900 | 7.45% |
| Region II | 22,700 | 24,400 | 1,700 | 7.49% |
| Region III | 20,000 | 21,400 | 1,400 | 7.00% |
| Region IV | 17,800 | 19,400 | 1,600 | 8.99% |
The highest percentage increase in monthly minimum wages is recorded in Region IV, at approximately 9.19%. For hourly minimum wages, Region IV also records the highest percentage increase, at approximately 8.99%.
3. Regional classification under the Appendix to Decree 399
The Appendix to Decree 399 sets out the list of provinces and centrally governed cities, together with the specific wards, communes and special zones classified into Regions I, II, III and IV.
Importantly, regional classification is not necessarily uniform across an entire province or centrally governed city. Different wards, communes or special zones within the same province or city may be subject to different regional minimum wage rates.
For example:
- Hanoi: The Appendix identifies specific wards and communes as Region I, while the remaining wards and communes are classified as Region II.
- Ho Chi Minh City: Certain listed localities are classified as Region I, while the remaining wards and communes fall under Region II.
- Hai Phong: Certain listed localities are classified as Region I, while the remaining wards, communes and special zones are classified as Region II.
- Lao Cai: The Appendix includes localities classified into Regions II, III and IV.
- Quang Ninh: The Appendix includes localities classified into Regions I, II and III.
Accordingly, employers should not determine the applicable regional minimum wage solely by reference to the name of the province or centrally governed city in which they operate. Instead, they should identify the precise ward, commune or special zone where the relevant workplace or business unit is located and check its classification against the Appendix to Decree 399.
This is particularly important for employers operating multiple workplaces or business units in different localities, as different regional minimum wage rates may apply to their employees.