Vietnam is entering a new phase of wage and personal income tax reform that will directly affect payroll costs, employee net income, and employer compliance obligations. With the issuance of Decree No. 293/2025/ND-CP on statutory minimum wages and the passing of the new Personal Income Tax (PIT) Law in December 2025, businesses operating in Vietnam need to prepare for changes taking effect from 1 January 2026 and 1 July 2026 respectively.
For both local and foreign-invested enterprises, these updates go beyond routine adjustments. They have implications for employment contracts, payroll systems, unemployment insurance contributions, and employee communication. Below, we summarize the key changes and explain what they mean in practice, and how businesses should respond.
Summary of key changes
Increase in statutory minimum wages from 1 January 2026
Under Decree No. 293/2025/ND-CP, Vietnam has increased region-based statutory minimum wages for employees working under labor contracts. The revised monthly minimum wages are:
- Region I: VND 5,310,000
- Region II: VND 4,730,000
- Region III: VND 4,140,000
- Region IV: VND 3,700,000
As a direct consequence, the cap for unemployment insurance contributions, which is set at 20 times the regional minimum wage, has also increased.
- Region I: VND 106,200,000
- Region II: VND 94,600,000
- Region III: VND 82,800,000
- Region IV: VND 74,000,000
This change affects employers with higher-paid employees, particularly in Region I and Region II, where most foreign-invested enterprises are located.
New personal income tax law effective from 1 July 2026
On 10 December 2025, the National Assembly passed the new Personal Income Tax Law, which will take effect from 1 July 2026. One of the most notable changes is the restructuring of progressive PIT brackets.
The number of tax brackets is reduced from seven to five, with the following monthly taxable income levels and rates:
| Current Taxable Income (VND/month) | Current Tax Rate | New Taxable Income (VND/month) | New Tax Rate |
|---|---|---|---|
| Up to 5 million | 5% | Up to VND 10 million | 5% |
| Over 5 to 10 million | 10% | Over VND 10 to 30 million | 10% |
| Over 10 to 18 million | 15% | Over VND 30 to 60 million | 20% |
| Over 18 to 32 million | 20% | Over VND 60 to 100 million | 30% |
| Over 32 to 52 million | 25% | Over VND 100 million | 35% |
| Over 52 to 80 million | 30% | ||
| Over 80 million | 35% |
While the law officially takes effect on 1 July 2026, specific provisions regarding family deductions and the progressive tax table are expected to apply to the 2026 tax year to provide immediate relief.
Increases in personal and dependent deductions
To account for inflation and rising per capita income, the family circumstance-based deductions have been raised by approximately 40%:
- Personal deduction: Increased to 15.5 million VND/month (from 11 million).
- Dependent deduction: Increased to 6.2 million VND/month (from 4.4 million).
- New deduction categories: For the first time, taxpayers may be permitted to deduct eligible healthcare and education expenses for themselves and their dependents, pending detailed government guidance. It is also important to notice that a personal income tax is provided for those who work in digital technological sector, especially in high-level digital technology industry and high- tech personnel engaged in R&D.
Implications for employers and employees
For employers: The minimum wage hike will directly increase social, health, and unemployment insurance (SHUI) contribution bases. Businesses in labor-intensive sectors should expect a rise in total production costs.
For employees: Most individuals will see a substantial increase in net take-home pay due to the wider tax brackets and higher deductions. For example, a taxpayer earning 30 million VND with one dependent could see their monthly tax burden drop from roughly 968,000 VND to 295,000 VND.
What businesses should do now
To manage these changes effectively, RBA Group recommends that companies take the following steps:
- Review employment contracts and salary structures to ensure compliance with the new regional minimum wages from 1 January 2026.
- Update payroll software and internal calculations to reflect the revised unemployment insurance contribution caps.
- Recalculate labor cost projections to include higher mandatory insurance contributions.
- Proactively inform your team about these changes. Highlighting the increase in net pay can be a powerful tool for morale and financial transparency.
- Keep a close watch on upcoming government decrees that will specify how new healthcare and education deductions can be claimed.
Early preparation will allow businesses to spread cost impacts, avoid last-minute adjustments, and maintain transparency with their workforce.
Conclusion and how RBA Group can support you
Vietnam’s new salary and personal income tax regulations mark a significant shift in the employment and tax landscape for 2026. While the changes are manageable, they require careful planning, accurate implementation, and proactive communication.
RBA Vietnam supports clients across Vietnam with end-to-end payroll, tax advisory, and compliance services. Our team can assist with assessing cost impacts, updating payroll processes, interpreting the new PIT law, and ensuring full compliance with Vietnamese regulations. By working with a trusted advisor, businesses can navigate these changes confidently while focusing on their core operations.
