Vietnam is emerging as a key source of inexpensive labor for businesses expanding in Southeast Asia and Asia-Pacific, thanks to its resilient economic performance, growing working population, and low manufacturing costs. The country’s minimum wage, at around US$200 a month, is nearly half of China’s, making it a highly competitive market for international businesses. However, the shortage of skilled labor remains a significant challenge.
On June 30, 2024, the government issued Decree No. 74/2024/NĐ-CP, which introduces an approximate 6% increase in the minimum monthly wage for major cities like Ho Chi Minh City and Hanoi, raising it to 4,960,000 VND. This new payroll regulation is essential for foreign direct investors setting up operations in Vietnam.
Investing in Vietnam? Check out InCorp Vietnam’s HR & Payroll Services in Vietnam
This article delves into the average salary in Vietnam, covering minimum wage, industry-specific earnings, and management income, highlighting why Vietnam is an attractive destination for businesses despite the challenges. With labor costs significantly lower than in China and Mexico—at US$3 per hour—Vietnam offers a competitive edge for manufacturing and other labor-intensive operations.
Increased Rate of Minimum Wage in 2024
In urban areas like Ho Chi Minh City, Hanoi, and Danang, the official minimum wage has been adjusted as per Decree No. 74/2024/ND-CP, effective July 1, 2024. The Vietnamese government implemented a 6% increase in the monthly minimum wage across the country, tailored to the cost of living in each region:
- Region I (Hanoi, Ho Chi Minh City, Hai Phong, Bien Hoa, Thu Dau Mot, Vung Tau): The minimum wage is 4,960,000 VND.
- Region II (Ha Long, Ninh Binh, Danang, Nha Trang, Hue, Da Lat, Can Tho, Rach Gia, etc.): The minimum wage is 4,410,000 VND.
- Region III (Provincial cities and districts such as Hai Duong, Quang Ninh, Lam Dong, Kon Tum, Ca Mau, etc.): The minimum wage is 3,860,000 VND.
- Region IV (Other communes and districts): The minimum wage is 3,450,000 VND.
The hourly minimum wage has also been updated:
- Region I: 23,800 VND (~US$0.94)
- Region II: 21,200 VND (~US$0.84)
- Region III: 18,600 VND (~US$0.74)
- Region IV: 16,600 VND (~US$0.66)
This wage increase is part of a broader effort to improve conditions for the workforce, with further adjustments to social insurance and pension policies expected in the future. Hourly wage rates will be calculated based on the updated monthly wages, ranging from VND 16,600 to VND 23,800 across the four regions (assuming 26 working days per month, eight hours per day).
2024 Average Salary in Vietnam
Average wages in Vietnam rose to VND 6,700,000 monthly, up from VND 6,600,000 in the second quarter. Trading Economics’ macro models estimated that wages in Vietnam would reach VND 5,600,000/month at the end of 2022.
Additionally, econometric models predict that over the long run, the Vietnam Average Monthly Wages will tend to be in the range of VND 5,900,000/month in 2023 and VND 6,500,000/month in 2024.
From 2007 to 2022, the average monthly wage in Vietnam was VND 4,805,000, increasing about 10-15% yearly.
Average Wages in Vietnam’s Key Industries
- Manufacturing: Workers in this sector earn an average of 11,800,000 VND per month, with salaries ranging from 4,360,000 VND to 29,500,000 VND.
- Information Technology (IT): The gross salary ranges from 4,200,000 VND to 22,500,000 VND per month.
- Travel and Tourism: Employees in this industry earn around 11,500,000 VND per month on average, with a range from 4,360,000 VND to 32,000,000 VND.
- Logistics: An executive in the logistics sector typically earns about 13,000,000 VND per month, with a salary range from 6,380,000 VND to 20,300,000 VND.
Average Income of a Manager in Vietnam
In Vietnam, managers earn an average monthly salary of around 35,000,000 VND. Entry-level general managers typically earn about 30,500,000 VND, with salaries ranging from 15,900,000 VND to 46,700,000 VND. Senior managers can earn around 40,000,000 VND per month, with some positions offering benefits that can increase the maximum pay to 85,000,000 VND.
Foreigner Investors Should Make Plans for 2025
With Vietnam’s rapidly growing economy and significant foreign direct investments, wage increases are inevitable. Foreign investors already operating in Vietnam, or considering entry, should plan for the rising minimum wage in 2023 by adjusting their budgets, assessing new costs, and evaluating their operational capacity under the updated wage laws.
Read Related: Reduce Outsource Payroll Services Cost for Efficient Management in Vietnam
Why It’s Best to Outsource Payroll in Vietnam?
Outsourcing payroll in Vietnam offers several benefits, even for companies with just a few employees:
- Compliance with Payroll Regulations: Vietnamese payroll laws change frequently, making it challenging for employers, particularly foreign ones, to stay updated. A payroll expert ensures that your business remains compliant with all regulations.
- Cost and Time Savings: By outsourcing payroll tasks, businesses can save time and money, allowing them to focus on core activities without the need to invest in expensive payroll software or hire full-time staff.
- Efficient Payroll Management: A payroll outsourcing provider handles all payroll tasks, including generating detailed reports, which leads to better payroll management and easy access to all payroll-related information.
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