Payroll 2022: Latest Minimum Wage Increase in Vietnam

Compliance with payroll, when doing business in Vietnam is required. (Latest payroll update: 2022 minimum wage increase in Vietnam.

The government of Vietnam released Decree No. 38/2022/NĐ-CP, announcing that from July 2022, the monthly minimum wage in Vietnam would increase by approximately 6% to 4,680,000 VND in urban areas. This new payroll regulation in Vietnam went into effect on July 1, 2022. If you are a foreign direct investor looking to set up in Vietnam, these are regulations you would be aware of.

Setting Up in Vietnam? See Cekindo’s Payroll Outsourcing Services

In this article, you will read more about the payroll update with regard to the minimum wage in Vietnam in 2022.

Increased Rate of Minimum Wage in 2022

For urban regions like Ho Chi Minh City, Hanoi & Danang the official minimum wage is 4,680,000VND (~ US$189); however, if the employees are considered “skilled”, e.g. possessing a university degree, 7% would be added on top of that.

The increased rates of monthly minimum wage in Vietnam in 2022 are detailed as follows, based on the cost of living in each region:

  • Region 1 (urban Ho Chi Minh City and Hanoi): increased by US$11
  • Region 2 (rural Ho Chi Minh City and Hanoi; Da Nanang): increased by US$10
  • Region 3 (provincial cities and districts of Bac Giang, Bac Ninh, Phu Tho, Vinh Phuc, Hai Duong, and other provinces not included in Regions 1 and 2): increased by US$9
  • Region 4 (the rest of the areas): increased by US$8
vietnam minimum wage

Apart from the minimum wage raise, employers need to pay employees who have been in vocational training a salary that is 7% higher than the minimum salary. Employers are not permitted to reduce employees’ allowances of their overtime, hardships, and/or night shifts, even with the increase of minimum wage in 2022.

The unemployment insurance’s capped salary will also increase following the hike of the minimum wage:

  • Region 1: from US$3,600 to US$3,800
  • Region 2: from US$3.200 to US$3,380
  • Region 3: from US$2,800 to US$2,950
  • Region 4: from US$2,344 to US$2,645

Note that there is no plan to change the minimum wages in Vietnam until the end of 2022.

ForeignerInvestors Should Make Plans for 2023

Owing to the rapidly-growing economy and foreign direct investments in Vietnam, a wage increase in the country is inevitable. Therefore, for foreigners who are already doing business in Vietnam, or thinking of doing so, it is definitely a good idea to plan ahead for the rising minimum wage in 2022: prepare your budgets, new costs, and the capacity of your operation when the updated minimum wage law is enforced.

RELATED: Leverage Payroll Outsourcing for a Smooth Expansion to Vietnam

Why It Is Best to Outsource Payroll in Vietnam

Even with just a few employees in your company, payroll outsourcing is always a good idea. Here are some of the reasons:

1. Ensure Your Business Complies with the Latest Payroll Regulations

Vietnamese payroll law changes quite frequently and it may be difficult for employers, especially foreigners to keep up with the updates. In this case, only a payroll expert can make sure that your business’s payroll is in compliance all the time.

2. Save Money and Time, Focus on Business Growth?

When you delegate time-consuming payroll tasks to a professional, you can immediately free up all that time and use them on your core business activities. Moreover, you do not have to spend substantial money on high-tech software and full-time payroll staff.

3. Manage Your Payroll Efficiently

Payroll outsourcing provider streamlines and handles all your payroll tasks including generating detailed payroll reports. Therefore, you will have much better payroll management with easy access to all the payroll information.

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Hien Le

Hien is a Manager of the Human Resources Department at our office in Vietnam. She has more than 15 years of experience in all spectrums of Human Resources including Global Mobility and Office Management.