To properly manage payroll and social insurance in Vietnam, the minimum wage and the cap on social insurance contributions are extremely important benchmarks.
In particular, the minimum wage may be revised every year, directly affecting salary structures and social insurance calculations.
In this article, we clearly explain the minimum wage system and social insurance caps in Vietnam as of 2026, specifically for Japanese companies.
[Updated July 1, 2026] On the basis used for social insurance caps
The cap for Social Insurance (SI) and Health Insurance (HI) is 20 times the “reference level” (mức tham chiếu) — not the minimum wage. On July 1, 2026, the reference level rose from 2,340,000 VND to 2,530,000 VND (Decree 161/2026/ND-CP), putting the cap at 50,600,000 VND per month.
The cap for Unemployment Insurance (UI), by contrast, is 20 times the regional minimum wage — a different basis entirely. This distinction is one of the most commonly confused points in practice.
What Is the Minimum Wage in Vietnam?
Vietnam’s minimum wage is defined as a region-based minimum wage system.
Companies are legally required to pay employees at least the minimum wage applicable to their region.
It is important to note that the minimum wage is used not only for salary determination, but also as the lower limit for social insurance calculations and the upper limit for unemployment insurance.
Regional Minimum Wages in 2026
The minimum wage is set by region (Region I to IV).
The figures below were set by Decree 293/2025/ND-CP (issued November 10, 2025) and have applied since January 1, 2026 — an average increase of 7.2% over the previous rates.
| Region | Main Applicable Areas | Minimum Wage (Monthly) | Minimum Wage (Hourly) |
|---|---|---|---|
| Region I | Central Ho Chi Minh City, central Hanoi, etc. | 5,310,000 VND | 25,500 VND |
| Region II | Suburban areas of Ho Chi Minh City and Hanoi, etc. | 4,730,000 VND | 22,700 VND |
| Region III | Major provincial cities | 4,140,000 VND | 20,000 VND |
| Region IV | Rural and less-developed areas | 3,700,000 VND | 17,800 VND |
Transitional treatment following provincial mergers
Administrative restructuring has merged some localities that previously sat in different regional classifications. In those cases, the higher classification applies provisionally so that wage levels do not fall below the previous rate. Check the decree’s appendix to confirm which region your site falls under.
Key Areas Affected by the Minimum Wage
- Lower limit for base salary
- Upper limit for unemployment insurance (UI) contributions
- Overtime pay and allowance design
- Salary clauses in labor contracts
- Probationary pay (at least 85% of the full wage)
👉 For an overview of salary structure, please also refer to “ Basic Rules of Payroll Calculation in Vietnam ”.
What Is the Social Insurance Contribution Cap?
Vietnam’s social insurance system includes a maximum contribution cap.
This means that even if an employee’s salary is high, only income up to a certain limit is used for contribution calculations.
SI/HI and UI Use Different Bases
This is the single most misunderstood point in practice. Social and health insurance use one basis for their cap; unemployment insurance uses another.
| Insurance | Basis | Monthly Cap |
|---|---|---|
| Social Insurance (SI) | Reference level × 20 | 50,600,000 VND |
| Health Insurance (HI) | Reference level × 20 | 50,600,000 VND |
| Unemployment Insurance (UI) | Regional minimum wage × 20 | Region I: 106,200,000 VND Region II: 94,600,000 VND Region III: 82,800,000 VND Region IV: 74,000,000 VND |
What Is the “Reference Level” (mức tham chiếu)?
Introduced by the amended Social Insurance Law (Law 41/2024/QH15), the reference level is the benchmark used to calculate social insurance contributions and benefits. It replaces the former “base salary” (lương cơ sở) concept, and both the floor and the ceiling for SI and HI are derived from it.
| Period | Reference Level (Monthly) | SI/HI Cap (× 20) |
|---|---|---|
| Until June 30, 2026 | 2,340,000 VND | 46,800,000 VND |
| From July 1, 2026 | 2,530,000 VND | 50,600,000 VND |
※ The SI/HI cap moves with revisions to the reference level. Note that this is a different benchmark on a different schedule from minimum wage revisions.
Key Points on the 2026 Revisions
In 2026, two different benchmarks were revised — the minimum wage in January and the reference level in July. Because they affect different things, check them separately.
- From January 2026: Confirm that base salaries do not fall below the new minimum wage, and reset the UI contribution cap
- From July 2026: Update the SI/HI cap from 46,800,000 to 50,600,000 VND. Contributions change for higher earners
- Update payroll calculation logic and system settings (SI/HI and UI need separate caps)
- Review labor contracts and internal regulations
👉 For detailed social insurance calculations, please see “ Social Insurance Eligibility and Contribution Calculation ”.
Common Mistakes Made by Japanese Companies
- Assuming the SI/HI cap is “minimum wage × 20” (it is the reference level × 20 — UI is the one tied to the minimum wage)
- Judging minimum wage compliance based on total pay instead of base salary
- Failing to update contribution caps after a revision (2026 had two: January and July)
- Misidentifying regional classifications (overlooking changes from provincial mergers)
For real-world examples, please also refer to “ Common Payroll Pitfalls for Japanese Companies in Vietnam ”.
Managing Minimum Wage and Social Insurance Correctly
The minimum wage and social insurance caps affect:
- Payroll calculation
- Deductions (SI / HI / UI / PIT)
- Labor contracts
- Compliance with legal revisions
They are critical elements affecting all HR and payroll operations.
Because SI/HI and UI use different bases for their caps and are revised on different schedules, this is an area where spreadsheet-based management easily misses an update.
With EST, companies can centralize payroll management and adapt smoothly to minimum wage revisions and reference level changes.
👉 We also recommend reviewing “ How Payroll Deductions Work (SI / HI / UI / PIT) ”.
- Vietnam Payroll FAQ: Common Questions on Social Insurance, PIT, and Foreign Employees
- PIT Law Amendment Effective July 2026 | 5 Things Companies Should Do Now
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