The Vietnamese Government has recently announced the New Region-based Minimum Wages and Minimum Basic Wage as outlined below:
New Region-based Minimum Wages
The New Region-based Minimum Wages in 2020 has been confirmed as follows and will be applicable from 01 January 2020 through Decree No. 90/2019/ND-CP on November 15, 2019.
This will affect payroll from January 2020, specifically in Statutory Unemployment Insurance which is calculated and contributed based on 20 times the Region-based Minimum Wage.
– For enterprises located in region I: changing from VND 4,180,000/month to VND 4,420,000/month
– For enterprises located in region II: changing from VND 3,710,000/month to VND 3,920,000/month
– For enterprises located in region III: changing from VND 3,250,000/month to VND 3,430,000/month.
– For enterprises located in region IV: changing from 2,920,000/month to VND 3,070,000/month.
The Minimum Basic Wage
In line with the New Region-bases Minimum Wages, the National Assembly of Vietnam also approved the Resolution 70/2018/QH14 on 12 November 2019.
As a result, from 1 July 2020, the Minimum Basic Wage will increase from 1,490,000 VND per month to 1,600,000 VND per month.
The change will have an impact on both employers and employees in Vietnam due to manner in which Social Insurance and Health Insurance caps are linked. Tthe maximum contribution caps to which Social Insurance and Health Insurance are required to be calculated and remitted are based upon 20 times the Minimum Basic Wage.
Accordingly, the cap of salary which is not subjected to these insurances will increase from 29,800,000 VND to 32,000,000 VND/month.
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