[2026 Update]: Regional Minimum Wage &
Personal Income Tax (PIT) Changes
26/11/2025
1. Increase in Regional Minimum Wage for 2026
From January 1, 2026, under Government Decree 293/2025/NĐ-CP, the minimum wage for employees working under labor contracts will be adjusted upward for both monthly and hourly payment methods. Personal income tax.
Below is a comparison of the monthly regional minimum wage in 2025 and 2026:
| Region | Monthly 2025* | Monthly 2026 | Increase |
| Region I | 4,960,000 VND | 5,310,000 VND | +350,000 VND (~7.06%) |
| Region II | 4,410,000 VND | 4,730,000 VND | +320,000 VND (~7.26%) |
| Region III | 3,860,000 VND | 4,140,000 VND | +280,000 VND (~7.25%) |
| Region IV | 3,450,000 VND | 3,700,000 VND | +250,000 VND (~7.25%) |
2025 data based on Decree 74/2024/NĐ-CP.
Hourly minimum wage adjustments:
| Region | Hourly 2025 | Hourly 2026 | Increase |
| Region I | 23,800 VND/hour | 25,500 VND/hour | +1,700 VND (~7.14%) |
| Region II | 21,200 VND/hour | 22,700 VND/hour | +1,500 VND (~7.07%) |
| Region III | 18,600 VND/hour | 20,000 VND/hour | +1,400 VND (~7.53%) |
| Region IV | 16,600 VND/hour | 17,800 VND/hour | +1,200 VND (~7.23%) |
1.1 Important Notes for Employers and Employees
- From 01/01/2026, all new or existing labor contracts must be reviewed to ensure that monthly/hourly wages are not below the new minimum.
- “Monthly minimum wage” applies to employees paid monthly; “hourly minimum wage” applies to hourly-paid employees.
- Companies operating in multiple regions must apply the minimum wage of the region where each unit is located; industrial zones spanning multiple regions must apply the highest rate.
- Employees paid daily, weekly, by product, or by output must have converted wages (to monthly/hourly equivalents) that are not lower than the applicable minimum.
- Under Article 97(1) of the 2019 Labor Code, hourly workers must be paid after each hour, day, or week of work, or be paid cumulatively no later than once every 15 days if agreed upon.
1.2 Impact on Workers and Managers
A ~7% increase across all regions helps workers better cope with rising living costs. For employers, this requires proactive adjustments to salary scales, allowances, labor contracts, and internal communication to avoid non-compliance risks.
2. Adjustment to Personal Income Tax Deductions (PIT)
Alongside the minimum wage increase, January 1, 2026, marks a major update related to PIT. Under Resolution 110/2025/UBTVQH15 issued on October 17, 2025, dependent deductions will be increased.
Specifically:
- Personal deduction: increases from 11 million VND/month → 15.5 million VND/month (equivalent to 186 million VND/year).
- Dependent deduction: increases from 4.4 million VND/month → 6.2 million VND/month (~40.9% increase).
2.1 Deadlines for Registering Dependents
- If the individual authorizes their employer to finalize PIT on their behalf, dependents must be registered before the company submits the PIT finalization (e.g., no later than March 31 of the year following the tax year).
- If self-finalizing PIT: dependents must be registered no later than April 30 of the following year.
- For dependents with no caregiver (siblings, grandparents, etc.), registration must be completed before December 31 of the tax year.
2.2 Impact on Employees and Employers
Higher deductions directly reduce taxable income, meaning employees start paying Personal Income Tax only at higher income levels. Employers must update payroll/tax systems and guide employees in registering dependents correctly and on time.
3. Summary & Recommendations for Employers, HR, and Employees
3.1 Key Points to Remember
- From 01/01/2026: both monthly and hourly minimum wages increase by ~7%.
- From the 2026 tax year: personal deduction increases by 40.9% to 15.5 million VND/month; dependent deduction increases to 6.2 million VND/month.
- Employers must review labor contracts, salary scales, allowances, and hourly/contract work policies to ensure compliance.
- Employees must update their wage information and register dependents on time.
3.2 Recommended Actions
For Employees:
- Ask employers which regional minimum wage applies.
- Understand conversion methods if paid hourly or by output.
- Register dependents on time to optimize tax deductions.
For Managers/HR:
- Review and update contracts, salary tables, allowances, and payroll systems.
- Communicate clearly with employees to ensure transparency and prevent disputes.
For Large Employers or those with many hourly/output-based workers:
- Review wage and time-tracking systems to ensure hourly wage compliance.
- Update PIT declaration systems and deduction settings to avoid errors.
The increase in minimum wage and PIT deductions is a positive development for workers—especially low-income groups—while requiring businesses to update and comply promptly. Understanding these changes early helps build a transparent workplace, retain employees, and protect worker rights.
If you are an HR or business manager seeking support in reviewing labor contracts, payroll systems, or PIT obligations, consider reaching out for expert consultation to ensure accuracy and compliance.
For contact and support:
Facebook: NIC Global – Human Resource Solutions
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