Decree No. 72/2018/ND-CP on the increase of the minimum base salary

Thanks to the manufacturing industry driven by low labour costs, Vietnam has experienced a fast growth during the last few years. This growth obviously lead to a rise of the living costs, and in order to tackle this problem the Vietnamese Government has issued a new decree in order to increase minimum wages in Vietnam.

Decree 72/2018/ND-CP took effect on the 1st of July 2018 and it increased the minimum wage by 90,000 VND/month from 1,300,000 VND/month (about 57 USD) to 1,390,000 VND/month (about 61 USD).

Accordingly to this increase, the capped salary subject to Social insurance, Medical insurance and Trade Union contributions was increase by 1,800,000 VND/month from 26,000,000 VND/month to 27,800,000 VND/month.

A wage increase like this one in particular usually leads to a raise in consumption, it can also offset reduced investments and net exports, which in the end can bring growth and stability to a country's economy.

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