Proposal to increase minimum wage by 7.2%, effective from January 1, 2026

Need to establish new minimum wage for 2026

The Ministry of Home Affairs has drafted a Decree regulating the minimum wage for employees working under labor contracts. The document is being consulted on the Government's Electronic Information Portal and the Ministry of Home Affairs' Information Portal.

According to Decree No. 74/2024/ND-CP dated June 30, 2024, the current monthly minimum wage in Region I is 4,960,000 VND, Region II is 4,410,000 VND, Region III is 3,860,000 VND, Region IV is 3,450,000 VND.

With the CPI expected to increase by 3.7% each year in 2025 and 2026, the above minimum wage will no longer ensure the minimum living standard of workers and their families by the end of 2026, about 6.6% lower.

Along with that, the current minimum hourly wage in region I is 23,800 VND/hour, region II is 21,200 VND/hour, region III is 18,600 VND/hour, region IV is 16,600 VND/hour.

The Ministry of Home Affairs said that, up to now, there have been a number of issues that need to be considered in adjusting the minimum wage stipulated in Decree No. 74/2024/ND-CP mentioned above. Specifically:

Firstly, socio- economic factors, labor market, and business capacity have changed in a more positive direction. The macro economy continues to be stable, the economic growth rate (GDP) in the first 6 months of 2025 reached 7.52%, the target for 2025 is 8% or more; the labor market is stable and maintains recovery momentum; business production of enterprises tends to be better; wages and income of workers continue to be stable and increase, each quarter is higher than the previous quarter.

Second, the actual value of the minimum wage in Decree No. 74/2024/ND-CP has gradually declined over time due to the increase in the consumer price index (CPI). With the CPI expected to increase by 3.7% each year in 2025 and 2026, the above minimum wage will no longer ensure the minimum living standard of workers and their families by the end of 2026, about 6.6% lower.

Third, the minimum wage in Decree No. 74/2024/ND-CP is determined by region and linked to district-level administrative boundaries. From July 1, 2025, after the restructuring of administrative units nationwide, the localities applying the minimum wage have been reviewed and adjusted by the Government to be linked to the new commune-level administrative units. However, because this is a policy that has a wide impact on many subjects, including businesses and workers, the localities applying the minimum wage according to commune-level administrative units need to continue to be reviewed and updated to suit the actual situation in the localities after the restructuring.

Fourth, the National Wage Council has submitted a report to the Government recommending an average increase of 7.2% in the minimum wage, effective from January 1, 2026.

The areas applying minimum wages according to commune-level administrative units need to continue to be reviewed and updated to suit the actual situation in the localities after the rearrangement.

The above reality shows that it is very necessary to develop a Decree regulating the minimum wage to be applied in 2026. This is to ensure the minimum living standard of workers, increase workers' wages in accordance with labor productivity, economic growth, and business competitiveness as prescribed in Article 91 of the 2019 Labor Code. Along with that is the work of reviewing and updating the areas where the minimum wage is applied to suit the actual situation.

The draft Decree being consulted includes 5 articles and 1 appendix with regulations on the list of areas applying the minimum wage.

The subjects of application are employees working under labor contracts as prescribed by the Labor Code; employers as prescribed by the Labor Code (including: enterprises as prescribed by the Law on Enterprises; agencies, organizations, cooperatives, households, individuals who hire or use employees to work for them under agreements); other agencies, organizations, and individuals related to the implementation of the minimum wage prescribed in this Decree.

Minimum wage increased by 7.2% compared to current level

The Ministry of Home Affairs emphasized that the draft Decree stipulates an increase of 7.2% in the minimum wage compared to the current level to be applied from January 1, 2026. This increase coincides with the plan that the National Wage Council unanimously recommended to the Government.

Region	Minimum monthly wage (Unit: VND/month)	Minimum hourly wage (Unit: VND/hour)
Region I	5,310,000	25,500
Region II	4,730,000	22,700
Region III	4,140,000	19,900
Region IV	3,700,000	17,800

The proposed regional minimum wage will apply from January 1, 2026.

Accordingly, the monthly minimum wages in 4 regions are specifically regulated as follows: region I is 5,310,000 VND/month, region II is 4,730,000 VND/month, region III is 4,140,000 VND/month, region IV is 3,700,000 VND/month.

The above minimum wage increases from VND 250,000 to VND 350,000 (equivalent to an average rate of 7.2%) compared to the current minimum wage.

The above minimum wage adjustment is about 0.6% higher than the minimum living standard of workers until the end of 2026 to improve the workers. This adjustment shares and harmonizes the interests of workers and businesses, paying attention to improving the lives of workers, while ensuring the maintenance and development of production and business of enterprises.

The proposed minimum wage increases from VND250,000 to VND350,000 (equivalent to an average rate of 7.2%) compared to the current minimum wage.

The draft Decree also clearly stipulates the minimum hourly wages according to 4 regions: region I is 25,500 VND/hour, region II is 22,700 VND/hour, region III is 20,000 VND/hour, region IV is 17,800 VND/hour.

The hourly minimum wage continues to be determined based on the equivalent conversion method from the monthly minimum wage and standard working time as prescribed by the Labor Code. This is the method that experts from the National Labor Organization have recommended for Vietnam to choose and have used when calculating the hourly minimum wage from 2022 to present.

One of the noteworthy contents of this draft Decree is the area where the minimum wage is applied.

Decree No. 128/2025/ND-CP dated June 11, 2025 has stipulated the list of localities applying the minimum wage according to the new commune-level administrative unit. However, after localities operated according to the new provincial-level administrative unit, some of the applied localities have been rearranged and changed compared to the time of issuance of the Decree in June. At the same time, the above Decree No. 128/2025/ND-CP will expire from March 1, 2027.

Therefore, the draft Decree stipulates a new list of applicable areas based on the inheritance of the current list stipulated in Decree No. 128/2025/ND-CP and has been reviewed and updated at the request of the Provincial People's Committee. This content is specified in the Appendix of the list of areas applying the minimum wage from January 1, 2026, with detailed information in 34 provinces and cities at present.

The adjustment of the minimum wage will be implemented from January 1, 2026 to ensure time for businesses to prepare plans and resources for implementation.

According to the explanation of the Ministry of Home Affairs, most countries choose the time to adjust the minimum wage to coincide with the beginning of the fiscal year to facilitate business production planning of enterprises.

In Vietnam, since 2000, the Government has adjusted the minimum wage 20 times, of which 15/18 times were adjusted on January 1. Other adjustments on January 1 every year are associated with unusual fluctuations. For example, the current minimum wage will be applied from July 1, 2024 - this adjustment is set in the context of the economy and society after going through the most difficult time of the Covid-19 pandemic and starting to move to a state of good recovery and many positive aspects.

According to nhandan.vn

Source: https://baokhanhhoa.vn/xa-hoi/202507/de-xuat-tang-72-luong-toi-thieu-ap-dung-tu-ngay-112026-7184959/