Vietnam Labour Law Updates 2026
A comprehensive overview of Vietnam labour law updates 2026, with practical guidance for employers operating in or expanding into Vietnam.
Vietnam’s employment law landscape has undergone one of its most significant periods of reform in recent years. The combination of a new Employment Law, an amended Social Insurance Law, a comprehensive Personal Income Tax overhaul, a new electronic labour contract framework, and revised rules on foreign workers has created a layered set of compliance obligations that employers, whether operating locally or managing teams as part of a global workforce, need to understand and act on.
Several of these changes took effect on 1 January 2026. Others follow on 1 July 2026. This article sets out every significant change, the legal basis for each, and the practical steps employers should be taking now.
| A note from Raj Inda, CEO of Beyond Borders HR: |
|---|
| Vietnam's 2026 labour law changes are interconnected. A minimum wage increase under Decree 293 automatically raises the cap on unemployment insurance contributions. The new Employment Law expands who must be enrolled in social insurance. The PIT reform changes how payroll is calculated. Employers should treat these as a single compliance review, not separate tasks. |
Social Insurance Law 2024: Fully Operational in 2026
Expanded compulsory coverage
The 2024 law significantly broadened the categories of workers subject to mandatory social insurance (SI). In addition to full-time employees, the following are now explicitly covered:
- Part-time workers whose monthly salary equals or exceeds the minimum monthly reference level
- Enterprise managers (LLC Directors, JSC Board Members) and managers of household businesses who receive a salary
For employers with complex management structures or significant part-time workforces, including technology companies, service businesses, and foreign-invested enterprises, this expansion may have already resulted in under-enrolment that requires correction.
From base salary to reference level
The 2024 law replaces the concept of a fixed government-set ‘base salary’ (lương cơ sở), which had been VND 2.34 million per month, with a dynamic ‘reference level’ (mức tham chiếu) that the government can adjust based on economic conditions. This change affects how contribution ceilings and some benefit calculations are set, introducing a degree of variability into future payroll planning.
Current SHUI contribution rates
The current compulsory Social, Health, and Unemployment Insurance (SHUI) contribution rates applicable in 2026, as a percentage of the employee’s gross monthly salary, are:
| Fund | Employer | Employee | Notes |
|---|---|---|---|
| Social Insurance - Pension & Survivorship | 14% | 8% | Applies to Vietnamese employees; foreign employees enrolled from 1 Dec 2018 |
| Social Insurance - Sickness & Maternity | 3% | 0% | Employer-only contribution |
| Social Insurance - Work Injury & Occupational Disease | 0.5% | 0% | Employer-only contribution |
| Health Insurance | 3% | 1.5% | Applies to all employees |
| Unemployment Insurance | 1% | 1% | Vietnamese employees only; cap at 20x regional minimum wage |
| Trade Union Fund | 1% | 1%* | *Employee contribution only where a workplace trade union exists |
| Total SHUI | ~23.5% | ~10.5%* | Excluding trade union employee contribution |
The maximum contribution base for social insurance and unemployment insurance is 20 times the applicable regional minimum wage. With the 7.2% minimum wage increase from January 2026, this ceiling has risen proportionately across all four regions.
| Key Action For Employers: |
|---|
| Conduct a full SHUI enrolment audit by cross-referencing your current enrolled workforce against the expanded coverage categories under the 2024 Social Insurance Law. Any employee or manager omitted from coverage since July 2025 should be enrolled retrospectively. Update your payroll system to reflect the new contribution ceilings following the January 2026 minimum wage increase. Ensure your salary scale documentation and payroll records are consistent, as Vietnam Social Security (VSS) increasingly cross-references these during inspections. |
Foreign Worker Regulations: Decree 219 Streamlines Work Permits
Simplified single-step application process
The previous two-step process, first obtaining approval that a foreign worker was needed (the Foreign Labour Demand Report, or FLDR), then applying for the work permit, has been replaced by a single integrated application. The combined process is fully digital through the National Public Service Portal. Standard processing time has been reduced from approximately five weeks to ten working days.
Expanded work permit exemptions
The total number of work permit exemption categories has increased to 15. The most commercially significant additions and clarifications include:
- Short-term work exemption broadened: The previous ’30-day at a time, maximum three entries per year’ rule has been replaced with a simpler annual threshold, foreign employees whose total working duration in Vietnam is less than 90 days in a calendar year are exempt from the full work permit requirement
- Priority sector exemption: Foreign employees confirmed by the relevant ministry or provincial authority to work in priority development sectors, specifically finance, science and technology, innovation, and national digital transformation, may qualify for a work permit exemption
- Intra-company transfers: Clearer rules for transferring foreign workers within the same employer group across different provinces
Relaxed experience requirements
Minimum work experience requirements for foreign workers classified as ‘experts’ have been reduced. For experts in priority sectors (technology, innovation, national digital transformation), the minimum experience required has been reduced to one year, down from three years.
For experts in other sectors, the requirement has been reduced from three years to two years (a bachelor’s degree is also required in both pathways, which is a material qualifier). Foreign nationals with a bachelor’s degree and two years of relevant experience now qualify as experts in most fields.
Decentralised authority
For employers operating in multiple provinces, this means the relevant People’s Committee for the province where the employer’s head office is located is the approving authority where workers operate across multiple sites.
Further amendments under consideration
The Ministry of Home Affairs published a draft amendment to Decree 219 in late May 2026. Proposed changes include accepting foreign-issued health certificates (removing the requirement for a Vietnamese medical examination in all cases), removing experience requirements for workers in finance and technology sectors entirely, and further expanding exemptions for STEM professionals. Employers should monitor the finalisation of this draft.
| Key Action For Employers: |
|---|
| Review the work permit status of all foreign employees to ensure their permits are consistent with the updated Decree 219 framework. If any workers are in the short-term work category and their cumulative time in Vietnam is under 90 days per year, assess whether they can be managed under the new exemption rather than the full permit process. For new hires in technology, finance, or innovation roles, evaluate whether the priority sector exemption or relaxed experience thresholds apply. Ensure all permit applications are being submitted through the National Public Service Portal under the new single-step process. |
Regional Minimum Wage Increase: 7.2% Rise from 1 January 2026
The updated monthly and hourly minimum wage rates from 1 January 2026 are as follows:
| Region | Coverage | Monthly RMW | Hourly RMW |
|---|---|---|---|
| Region I | Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, and key urban/industrial districts | VND 5,310,000 | VND 25,500 |
| Region II | Provincial cities and major industrial zones adjacent to Region I | VND 4,730,000 | VND 22,700 |
| Region III | Remaining provincial towns and districts with industrial activity | VND 4,140,000 | VND 20,000 |
| Region IV | Rural communes and remaining areas not covered by Regions I–III | VND 3,700,000 | VND 17,800 |
The minimum wage serves as the baseline for several downstream calculations. The cap on unemployment insurance contributions is set at 20 times the regional minimum wage, so the 7.2% increase flows directly into higher maximum UI contribution bases. Social insurance contribution caps and overtime pay calculations are similarly affected.
Decree 293 explicitly prohibits employers from offsetting the minimum wage increase by abolishing or reducing other lawful entitlements, including overtime pay, night-shift allowances, in-kind benefits, and other benefits mandated under the Labour Code. Wage increases must be genuine increases to base pay, not reclassifications.
| Key Action For Employers: |
|---|
| Update payroll for all employees earning at or near the regional minimum wage with effect from 1 January 2026. Review and update your company's internal salary scale (thang bảng lương) to reflect the new minimum floors. Failure to maintain a compliant salary scale is a separate compliance obligation under the Labour Code. Recalculate the unemployment insurance contribution cap for affected employees. Issue salary addenda to employment contracts where contractual pay is below the new minimums. |
Employment Law 2025: In Force from 1 January 2026
Expanded unemployment insurance coverage
The most operationally significant change for employers is the expansion of who must be enrolled in the unemployment insurance (UI) scheme. Under the 2013 law, only employees on fixed-term contracts of three months or longer were covered. From 1 January 2026, the following additional categories are compulsorily included:
- Employees working under contracts with a term of one full month to less than three months
- Part-time employees whose monthly salary equals or exceeds the minimum salary used as the basis for compulsory social insurance contributions
- Individuals working under agreements with different titles but whose contents demonstrate a paid employment relationship with management, supervision, and direction from one party, targeting arrangements that resemble employment without using employment contract language
Foreign employees remain excluded from the unemployment insurance scheme.
Higher unemployment benefits with a new cap
The Employment Law 2025 maintains the existing formula for calculating monthly unemployment benefits (60% of the average monthly salary in the six months preceding unemployment) but introduces a new maximum cap: the monthly benefit cannot exceed five times the regional minimum wage applicable in the last month the employee participated in UI. This cap is designed to manage the fund’s sustainability in high-income cases while maintaining the contribution-benefit principle for the majority of workers.
The law also shortens the waiting period before benefits are received. Employees can now receive support from the 11th working day after submitting a complete application, five days earlier than under the 2013 law.
Broader recognition of work experience and qualifications
The Employment Law 2025 also updates the framework for recognising practical work experience and vocational qualifications, making it easier for workers with non-traditional educational backgrounds to demonstrate competency for certain roles. For employers in manufacturing and service sectors, this broadens the effective labour pool for positions that previously required formal certification.
| Key Action For Employers: |
|---|
| Review your employee headcount and contract types to identify workers now covered by the expanded UI scheme, particularly those on short contracts of one to three months. Enrol newly covered employees in the UI scheme and adjust payroll accordingly. Communicate the change to affected employees, as it represents both a new cost (1% of salary) and a new benefit entitlement. Note that UI contributions for affected employees also raise the social insurance administration workload. |
Electronic Labour Contracts: Framework in Force from 1 January 2026, National Platform by 1 July 2026
The Government has set a deadline of 1 July 2026 for the National Electronic Labour Contract Platform (NELCP), managed by the Ministry of Home Affairs (the merged successor of Ministry of Labour, Invalids and Social Affairs, MOLISA, which was merged into the Ministry of Home Affairs effective 1 March 2025), to be officially operational.
What the framework requires
Electronic labour contracts are not mandatory, paper contracts remain fully valid and will not be abolished. However, where employers choose to use electronic contracts, the following requirements under Decree 337 apply:
- Both parties must possess a Level 2 electronic identity account (VneID) or use a valid ID document (citizen ID card or passport for foreign employees)
- Contracts must be executed via a certified eContract service provider using certified digital signatures
- Once executed, contracts must be uploaded to the National Electronic Labour Contract Platform, which assigns each contract a unique identification code
- E-contracts have the same legal validity as paper contracts when all conditions are met
The practical significance of the unique contract ID is considerable: it creates a single, traceable record of the agreement between employer and employee, eliminates version discrepancies that have historically been a source of labour disputes (particularly in work permit applications where submitted contract versions sometimes differed from working terms), and enables government authorities to cross-reference contract data with social insurance records and work permit databases.
What changes on 1 July 2026
From 1 July 2026, the conclusion and performance of any new electronic labour contract must comply with the provisions of Decree 337. This means that employers who begin using e-contracts from that date must use the National Platform and comply with the digital signature and identity verification requirements. Paper contracts executed after that date remain valid, the platform does not retroactively affect existing paper contracts.
| Key Action For Employers: |
|---|
| If you intend to use electronic labour contracts, assess whether your current contract management workflows, HR software, and identity verification processes are compatible with the Decree 337 requirements. Confirm whether your employment contracts contain a valid electronic execution clause. If your employees include foreign nationals, ensure they have the relevant identity documentation to complete the VneID or equivalent verification process. Even if you continue using paper contracts, prepare for the platform to be used as a reference standard in future labour inspections and work permit submissions. |
Personal Income Tax Reform: Two-Phase Changes in 2026
Vietnam’s Personal Income Tax system underwent its most significant reform since 2012. The changes are implemented in two phases, one effective 1 January 2026 and one effective 1 July 2026, and collectively reduce the tax burden on most employees, including expatriates.
Phase 1: Increased family circumstance deductions (from 1 January 2026)
- Personal deduction for the taxpayer: VND 15.5 million per month (up from VND 11 million, a 41% increase)
- Dependent deduction per eligible dependent: VND 6.2 million per month (up from VND 4.4 million, a 41% increase)
An individual without dependents now begins paying PIT only when their monthly income exceeds VND 15.5 million. An individual with one dependent begins paying PIT above VND 21.7 million per month. These thresholds represent a meaningful reduction in PIT liability for lower- and middle-income earners and reduce the incidence of low-income employees being subject to PIT at all.
Phase 2: Amended PIT Law, new brackets and expanded exemptions (from 1 July 2026)
Key changes include:
- Tax brackets simplified from seven to five progressive bands
- The top 35% rate now applies above VND 100 million per month (up from VND 80 million), meaning a larger portion of high-income earners’ salary is taxed at lower rates first
- The number of tax-exempt income categories increases from 14 to 21, with specific focus on supporting science, technology, and high-quality digital talent
- A five-year PIT exemption applies to experts in AI, semiconductors, and R&D
- A 50% PIT reduction applies to income from investments in technology startups
- Certain overtime pay, scholarships, green bond income, and disaster relief support are newly exempt
For employers of expatriates and high-earning Vietnamese employees, the split effective dates, January for deductions, July for brackets, means payroll must be updated twice during 2026. Applying the wrong rule for the wrong period is a compliance risk.
| Key Action For Employers: |
|---|
| Update payroll calculations for all employees from 1 January 2026 to reflect the new deduction levels. Communicate the change to employees, many will see a reduction in PIT withholding on their payslips and should understand the reason. Prepare a second payroll update for 1 July 2026 to implement the new tax brackets and expanded exemptions. Ensure dependent registrations are up to date, as employees may benefit from declaring dependents who were previously below the PIT threshold but are now relevant. |
At-a-Glance: Vietnam Labour Law Updates 2026
| Effective Date | Change | Legal Basis |
|---|---|---|
| 1 July 2025 (now fully operational) | Social Insurance Law 2024 in force. Expanded SI coverage to part-time workers and salaried managers. Base salary replaced by reference level. | Law No. 41/2024/QH15 |
| 7 Aug 2025 (now fully operational) | Decree 219 in force. Streamlined work permits, single-step digital process (10 working days), expanded exemptions, relaxed experience requirements for experts. | Decree No. 219/2025/ND-CP |
| 1 Jan 2026 | Regional minimum wage increase of ~7.2% across all four regions. Region I: VND 5,310,000/month. | Decree No. 293/2025/ND-CP |
| 1 Jan 2026 | Employment Law 2025 in force. UI coverage extended to 1-3 month contracts and qualifying part-time workers. UI benefit cap set at 5x regional minimum wage. | Law No. 74/2025/QH15 |
| 1 Jan 2026 | Electronic labour contract framework in force. Optional e-contracts must meet digital signature and identity verification requirements. | Decree No. 337/2025/ND-CP |
| 1 Jan 2026 | PIT family circumstance deductions increased: personal deduction VND 15.5m/month (from VND 11m); dependent deduction VND 6.2m/month (from VND 4.4m). | Resolution No. 110/2025/UBTVQH15 |
| 1 Jul 2026 | National Electronic Labour Contract Platform must be operational. New e-contracts must be executed through the platform. | Decree No. 337/2025/ND-CP |
| 1 Jul 2026 | Amended PIT Law takes effect. Five tax brackets (from seven). Top 35% rate applies above VND 100m/month (from VND 80m). Expanded exemptions including 5-year exemption for AI/R&D experts. | PIT Law No. 109/2025/QH15 |
What Employers Should Be Doing Now
The changes in 2026 require action across payroll, HR administration, and employment documentation. The following checklist covers the most pressing priorities:
Payroll and compensation (immediate)
- Confirm all employees earning at or near the regional minimum wage have been updated to the Decree 293 rates from 1 January 2026
- Review and update your company salary scale to maintain compliance with Labour Code requirements on documented pay structures
- Recalculate SHUI contribution caps based on the new regional minimum wage figures, the 20x cap applies to all four regions
- Update PIT withholding calculations for all employees to reflect the new deduction levels from 1 January 2026
- Prepare a second payroll update for 1 July 2026 to implement the new PIT brackets and expanded exemptions under the Amended PIT Law
Social insurance enrolment (review required)
- Audit your enrolled workforce against the expanded coverage categories under the Social Insurance Law 2024, particularly short-contract employees (1–3 months), part-time workers above the salary threshold, and salaried managers
- Retrospectively enrol any employees who should have been covered from 1 July 2025 and address any resulting contribution shortfalls
- Update your Employment Law 2025 UI enrolment for workers on 1–3 month contracts from 1 January 2026
Employment contracts and documentation
- Issue salary addenda to employment contracts where contractual pay is below the new minimum wage rates
- Review employment contract templates to ensure they reflect current Labour Code requirements and do not contain provisions incompatible with the expanded UI coverage
- If you plan to use electronic labour contracts, assess your digital signature infrastructure and eContract provider arrangements ahead of the 1 July 2026 National Platform deadline
Foreign workers
- Review the work permit status and exemption eligibility of all foreign employees under the Decree 219 framework
- For any new hires in technology, finance, or innovation roles, assess whether reduced experience thresholds or priority sector exemptions apply
- Monitor the draft amendment to Decree 219 currently under consultation, which could further ease requirements for STEM and technology professionals
Vietnam’s employment law is evolving rapidly and the regulatory changes of 2025–2026 represent a genuine shift in compliance expectations, from a relatively informal, documentation-light environment toward a more systematised, digitally monitored framework. Employers who have been managing Vietnam payroll and HR informally will face increasing scrutiny as the National Electronic Labour Contract Platform, the expanded social insurance system, and digitalised inspection processes come together.
How Beyond Borders HR Supports Employers Stay Compliant
These 2026 employment legislation changes for Vietnam can be challenging for employers to process independently. Beyond Borders HR, a global HR consulting firm, stands ready to assist businesses in understanding and implementing these changes effectively. With our extensive expertise in global HR practices, we ensure that your organisation stays compliant with the evolving regulatory landscape.
Reach out to Beyond Borders HR for tailored solutions, expert guidance, and seamless integration of these legislative updates into your HR policies and practices. Our team is dedicated to empowering your business with the knowledge and support needed to thrive in this dynamic regulatory environment.
Need help with Vietnam employment legislation?
