1.The new common minimum salary takes effective from 01 July 2023
Pursuant to the Decree 24/2023/NĐ-CP dated 14 May 2023, the common minimum salary shall be increased from VND1,490,000/month to VND 1,800,000/ month from 01 July 2023. Accordingly, from 01 July 2023, the maximum base salary for social, health, labor accident and occupation diseases insurances as well as trade union contribution (which is equal to 20 times of common minimum salary) shall be increased from VND 29,800,000/month to VND 36,000,000/ month, respectively.
2. Impact of increasing common minimum salary rate from 01 July 2023
i. Impact on the SHUI contribution of Employer and Employee
The increment of common minimum salary changes from VND 29,800,000/month to VND 36,000,000/ month which is the maximum base salary for social, health, labor accident and occupation diseases insurances as well as trade union contribution (which is equal to 20 times of common minimum salary) shall impact to SHUI contribution of employee whose basic salary is higher than VND 29,800,000.
Please find the below an example for comparison on the insurances contributions that Employees and Employers have to contribute for the period before and after 01 July 2023 for your easy reference. The example is set out for the case of Vietnamese employees with monthly gross salary at 35,000,000/month.
The SHUI contribution of employees whose basic salary is less than VND 29,800,000 will not be impacted by this new common minimum salary rate.
ii. Impact on Employee’s SI benefit
As common minimum salary rate is a base for social insurance regimes calculation, therefore, the increment of common minimum salary rate leads to the increment of some social insurance allowances. Details are as follows:
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