Posted 18.12. 2019 by Cekindo / Last update on 15.01. 2021
The government in Vietnam released Decree No. 90/2019/ND/CP, announcing that in 2020, the monthly minimum wage in Vietnam will increase by approximately 5.7%. This new payroll regulation in Vietnam will become effective on January 1, 2020.
In this article, you will read more about the payroll update with regard to minimum wage in Vietnam in 2020.
The increased rates of monthly minimum wage in Vietnam in 2020 are detailed as follows, based on the cost of living in each region:
Apart from the minimum wage raise, employers need to pay employees who have been in vocational training a salary that is 7% higher than the minimum salary. Employers are not permitted to reduce employees’ allowances of their overtime, hardships and/or night shifts, even with the increase of minimum wage in 2020.
Latest update: The minimum wage in Vietnam will be increased from 1,490,000 VND/month (US$63,8) to 1,600,000 VND/month (US$68,5), an increase of 110,000 VND and valid from July 1st, 2020. This is in accordance with Decree 86/2019/QH14 on Nov 12, 2019 about Government’s budget plan in 2020.
The unemployment insurance’s capped salary will also increase following the hike of the minimum wage:
Note that there is no plan to change the minimum wages in Vietnam until the end of 2021.
Owing to the rapidly-growing economy and foreign direct investments in Vietnam, the wage increase in the country is inevitable. Therefore, foreigners who are already doing business in Vietnam, or thinking of doing so, it is definitely a good idea to plan ahead for the rising minimum wage in 2020: prepare your budgets, new costs, and the capacity of your operation when the updated minimum wage law enforced in 2020.
If you are still unfamiliar with the new regulation, or finding the new wage hike too much for you to handle in a short amount of time, payroll outsourcing is the best way to go.
Even with just a few employees in your company, payroll outsourcing is always a good idea. Here are some of the reasons:
Ensure Your Business Complies with the Latest Payroll Regulations
Vietnamese payroll law changes quite frequently and it may be difficult for employers, especially foreigners to keep up with the updates. In this case, only a payroll expert can make sure that your business’ payroll is in compliance all the time.
Save Money and Time, Focus on Business Growth
When you delegate time-consuming payroll tasks to a professional, you can immediately free up all that time and use them on your core business activities. Moreover, you do not have to spend substantial money on those high-tech software and full-time payroll staff.
Manage Your Payroll Efficiently
Payroll outsourcing provider streamlines and handles all your payroll tasks including generating detailed payroll reports. Therefore, you will have a much better payroll management with easy access to all the payroll information.
Payroll management is a huge responsibility that requires time, effort and manpower. It is a delicate task that may be difficult to be taken care of by one person at the HR department. This is where Cekindo’s payroll outsourcing comes in to make sure that your payroll duties are fulfilled with performance that exceeds your expectations.
Cekindo uses advanced technology and software to process your payroll efficiency, of which can reduce your operational costs and influence your company’s profitability. Regardless of your company size, number of staff and payroll complexity, we can tailor our payroll outsourcing services to meet your needs.
Our payroll services in Vietnam include the following, but not limited to:
Let Cekindo assist you in growing your business in the right direction. Get in touch with us by filling in the form below.