What is a living wage in Vietnam?

The Living Wage in Vietnam: Understanding the Gross and Net Figures

The term “living wage” refers to the minimum income required to meet basic needs, such as food, housing, transportation, and healthcare. It ensures a decent standard of living and allows individuals to participate fully in their communities. In Vietnam, the living wage varies depending on the region and the cost of living.

In Region 2 of Vietnam, which includes provinces such as Nghe An, Thanh Hoa, and Ha Tinh, the monthly gross living wage for March 2022 was approximately VND 7,611,979 (USD 318). This figure represents the total amount earned before any deductions.

It is crucial to note that the gross living wage does not equate to the actual take-home pay that individuals receive. Mandatory deductions, such as social insurance, health insurance, and trade union fees, are subtracted from the gross wage. These deductions are essential for providing workers with social welfare benefits and healthcare coverage.

According to data from March 2022, the net take-home pay in Region 2 of Vietnam was approximately VND 6,736,602 (USD 282). This figure represents the amount of money that workers receive after all mandatory deductions have been taken into account.

The difference between the gross and net living wages highlights the impact of payroll taxes and other withholdings. These deductions are necessary for maintaining social welfare systems and providing necessary benefits for workers.

It is important for employers and workers to understand the components of the living wage to ensure fair compensation and adequate safeguards for the workforce. Regular adjustments may be made to the living wage based on changes in the cost of living and economic conditions.

By establishing a living wage that meets the needs of workers and provides them with a decent standard of living, Vietnam can contribute to a more equitable and prosperous society.