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UPDATE ON REGIONAL MINIMUM WAGES AND SOCIAL INSURANCE, UNEMPLOYMENT INSURANCE AND HEALTH INSURANCE CONTRIBUTION RATES FOR 2027
On 2 November 2026, the Government issued Decree No. 399/2026/ND-CP prescribing the minimum wage applicable to employees working under labor contracts, effective from 1 January 2027.
Under this Decree, the monthly and hourly minimum wages have been increased across all four regions. This adjustment not only affects employers' salary policies but also serves as an important basis for reviewing salaries used to calculate compulsory social insurance (SI), unemployment insurance (UI) contributions and other employee-related obligations.
Below are the key points that enterprises should take into consideration when preparing to implement the new regulations in 2027.
1. Regional Minimum Wages Effective from 1 January 2027
According to Decree No. 399/2026/ND-CP, the monthly and hourly minimum wages are prescribed as follows:
| Region | Monthly Minimum Wage (VND/month) | Hourly Minimum Wage (VND/hour) | Monthly Increase Compared to 2026 |
|---|---|---|---|
| Region I | 5,700,000 | 27,400 | 390,000 |
| Region II | 5,080,000 | 24,400 | 350,000 |
| Region III | 4,450,000 | 21,400 | 310,000 |
| Region IV | 4,040,000 | 19,400 | 340,000 |
Note: The applicable regional minimum wage is determined based on the location where the employer operates. Where an enterprise has multiple branches operating in different regions with different minimum wage levels, each establishment or branch must apply the corresponding minimum wage applicable to its operating location.
2. Salary Used as the Basis for Social Insurance and Unemployment Insurance Contributions in 2027
The adjustment of regional minimum wages provides a basis for enterprises to review the salaries agreed upon in labor contracts and the salary levels used to calculate compulsory insurance contributions.
2.1. Minimum and Maximum Salary Levels for Social Insurance and Unemployment Insurance Contributions
| Region | Regional Minimum Wage (VND/month) | Maximum SI Contribution Salary in 2027 | Maximum UI Contribution Salary in 2027 |
|---|---|---|---|
| Region I | 5,700,000 | 20 times the applicable statutory base salary of VND 2,530,000 (effective from 1 July 2026 under Decree No. 161/2026/ND-CP) | 114,000,000 |
| Region II | 5,080,000 | 101,600,000 | |
| Region III | 4,450,000 | 89,000,000 | |
| Region IV | 4,040,000 | 80,800,000 |
Notes:
- Compulsory Social Insurance (SI): The minimum salary used as the basis for compulsory SI contributions is equal to the applicable statutory base salary, while the maximum contribution salary is capped at 20 times the applicable statutory base salary.
- Unemployment Insurance (UI): The maximum monthly salary used as the basis for UI contributions is capped at 20 times the monthly regional minimum wage.
Therefore, enterprises should distinguish between the maximum contribution bases for SI and UI to accurately determine their monthly insurance obligations.
2.2. Social Insurance, Unemployment Insurance and Health Insurance Contribution Rates in 2027
Under the current regulations, compulsory insurance contribution rates are determined as follows:
a) For Vietnamese Employees
| Contribution Item | Employee | Employer |
|---|---|---|
| SI – Retirement and Survivorship Fund | 8% | 14% |
| SI – Sickness and Maternity Fund | - | 3% |
| SI – Occupational Accident and Disease Fund | - | 0.5%* |
| UI – Unemployment Insurance | 1% | 1% |
| HI – Health Insurance | 1.5% | 3% |
| Total | 10.5% | 21.5% |
| Combined Contribution Rate | 32% |
Note: The standard contribution rate to the Occupational Accident and Disease Fund is 0.5%. Enterprises meeting the statutory eligibility conditions may be entitled to apply a lower contribution rate in accordance with applicable regulations.
b) For Foreign Employees
Foreign employees who fall within the scope of compulsory SI and HI participation are required to participate in these insurance schemes but are not subject to UI contributions.
| Contribution Item | Foreign Employee | Employer |
|---|---|---|
| SI – Retirement and Survivorship Fund | 8% | 14% |
| SI – Sickness and Maternity Fund | - | 3% |
| SI – Occupational Accident and Disease Fund | - | 0.5%* |
| UI – Unemployment Insurance | Not applicable | Not applicable |
| HI – Health Insurance | 1.5% | 3% |
| Total | 9.5% | 20.5% |
| Combined Contribution Rate | 30% |
Note: The above rates apply to foreign employees who are subject to compulsory SI and HI participation and do not fall under any statutory exemption or exclusion.
c) For Business Household Owners and Unpaid Enterprise Managers
For individuals who are subject to compulsory SI and HI participation under applicable regulations, the contribution rates are as follows:
| Contribution Item | Rate |
|---|---|
| SI – Retirement and Survivorship Fund | 22% |
| SI – Sickness and Maternity Fund | 3% |
| HI – Health Insurance | 4.5% |
| Total | 29.5% |
The contributions are calculated based on the applicable statutory base salary.
3. Allowances, Benefits and Welfare Payments Excluded from Social Insurance Contributions in 2027
Under the regulations governing salaries used as the basis for compulsory SI contributions and the guidance provided in Official Letter No. 1198/CTL&BHXH-BHXH dated 5 September 2025, other benefits and welfare payments that are separately specified in labor contracts, are not considered salary in nature and do not fall within the categories subject to SI contributions may include:
- Attendance bonuses based on business performance and employees' job performance.
- Innovation and initiative bonuses.
- Mid-shift meal allowances.
- Transportation and fuel allowances.
- Telephone allowances.
- Travel and commuting allowances.
- Housing allowances.
- Childcare allowances.
- Allowances for raising young children.
- Financial support in the event of an employee's family member passing away.
- Financial support when an employee's family member gets married.
- Birthday allowances.
- Financial assistance for employees facing financial difficulties due to occupational accidents.
- Financial assistance for employees facing financial difficulties due to occupational diseases.
Important Notes for Enterprises:
Not every payment labeled as an allowance or financial support is automatically excluded from the salary used as the basis for SI contributions.
Enterprises should pay attention to the following:
- Benefits and welfare payments should be clearly specified and separately stated in labor contracts or relevant internal documents.
- The actual nature, purpose and eligibility conditions of each payment must be properly determined.
- Enterprises should not use fixed, regular and recurring allowances that are essentially salary payments to replace salary components or salary-based allowances that are subject to SI contributions.
- Supporting documents, internal policies and payment records must be consistent with the actual nature of the payments.
If an enterprise incorrectly classifies payment items or fails to maintain sufficient supporting documentation, it may face the risk of the social insurance authorities requiring an adjustment to the salary used as the contribution basis and retroactive payment of outstanding insurance contributions in accordance with applicable regulations.
4. What Should Enterprises Prepare Before 1 January 2027?
To minimize compliance risks and ensure adherence to the new regulations, enterprises should proactively undertake the following actions:
1. Review Labor Contracts: Check the salaries agreed upon for each job position or title to ensure that they are not lower than the new applicable regional minimum wage.
2. Review Salary Scales and Payroll Structures: Adjust relevant salary levels to ensure compliance with the minimum wage requirements effective from 1 January 2027.
3. Review Salaries Used as the Basis for Insurance Contributions: Examine salary components, allowances and other additional payments to accurately determine the contribution bases for SI, UI and HI.
4. Check Insurance Contribution Rates and Limits: Update the applicable contribution rates, minimum and maximum contribution bases for each category of employee, including Vietnamese and foreign employees.
5. Review Salary, Bonus and Welfare Policies: Properly classify income components subject to and excluded from SI contributions to ensure compliance with applicable regulations.
