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In Vietnam, there are two kinds of minimum wages. The first type is the common minimum wage VND 1,490,000 (~US$64) which is used to calculate salaries for employees in state-owned organizations and enterprises, as well as to calculate the social contribution for all enterprises (i.e. the maximum social contribution is 20 times the common minimum wage). The second type of minimum wage is used for employees in all non-state enterprises based on zones as defined by the government.

Vietnam Minimum Wage 2020

Business enterprises’ locations

2019 Minimum Monthy Wage (VND)

2020 Minimum Monthy Wage (VND)

Increase (%)

Region 1

4,180,000 (US$180)

4,420,000 (US$190)

5.74

Region 2

3,710,000 (US$159)

3,920,000 (US$169)

5.66

Region 3

3,250,000 (US$140)

3,430,000 (US$148)

5.54

Region 4

2,920,000 (US$125)

3,070,000 (US$132)

5.14

The above minimum wage rates only apply to Vietnamese employees doing the most basic work under normal working conditions. For those who have passed vocational training courses, including company training, wages are at least seven percent higher than minimum wage rates. Minimum wages are unlikely to change for 2021 due to the result of the pandemic as proposed by the National Wage Council.

For Vietnamese employees that work in foreign companies in Vietnam, compensation is determined through negotiations between the two parties. However, the compensation should be no lower than the minimum monthly salary rates as stipulated by the government.

Employees who work extra hours are also paid for those extra hours based on their current hourly wages, as immediately below.

In cases where an employee works extra hours at night, they are paid extra in accordance to the applicable regulations. Furthermore, employees who are given time off in compensation for working extra hours will need to be paid the difference between their wages during normal working hours and overtime work. Finally, employees who work night shifts should be paid at least 30 percent higher than normal.

Salaries paid to Vietnamese staff working for foreign companies must be denominated in Vietnamese Dong. Foreign employers may base salary rates in either Vietnamese Dong or US Dollars, but salaries that are based in US Dollars must be converted into Vietnamese Dong.

In general, an employee’s typical monthly salary package includes their gross salary and mandatory insurance contributions. Personal income taxes (PIT) will be levied on the balance after mandatory insurance contributions have been deducted.

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