Southeast Asia Minimum Wage 2027: Country-by-Country Update

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The short answer: As of October 26, 2026, the four largest Southeast Asian employer markets are at very different stages of setting their 2027 minimum wages. Vietnam's National Wage Council has agreed an average 7.8% increase, and a draft decree would apply it from January 1, 2027, lifting the Region I monthly minimum from VND 5.31 million to VND 5.70 million. Malaysia announced in its 2027 budget that the national minimum wage will rise from RM1,700 to RM2,000 a month in June 2027, with an exemption for micro, small and medium enterprises (MSMEs) with annual sales under RM50 million. Indonesia has not settled the formula for its 2027 provincial minimum wages. In Thailand, the national Wage Committee has yet to meet, so current daily rates of THB 337–400 remain in place with no timeline for change.

Key takeaways

• Vietnam: average +7.8% planned from January 1, 2027, but the government decree has not been signed.
• Malaysia: RM2,000 a month from June 2027. Details of the MSME exemption are still to come.
• Indonesia: the 2027 formula is undecided. Unions are pushing for 7.5%–9.5%.
• Thailand: the Wage Committee hasn't met, and there is no timetable.
• Budgeting: model Vietnam and Malaysia on the announced figures, and hold a range for Indonesia and Thailand.

2027 minimum wage at a glance (as of October 26, 2026)

1. Vietnam: Vietnam Government News: Regional minimum wage may increase from January 1, 2027 (July 22, 2026)
2. Malaysia: The Star: Budget 2027: Minimum wage to rise to RM2,000 from June 2027 (October 9, 2026)
3. Thailand: Matichon: Minimum wage still undecided (October 24, 2026, in Thai)

1. How do the four countries compare?

2. Vietnam: 7.8% average increase planned for January 1, 2027

Vietnam's regional minimum wage is a monthly and hourly floor that the government sets by decree for each of four regions. It applies to all employees under a labor contract. On July 16, 2026, the National Wage Council agreed to raise the rates by 7.8% on average. The Ministry of Home Affairs is drafting the decree, which would take effect on January 1, 2027.

The rate that applies depends on where you operate, and industrial zones that span more than one region use the highest rate. Social insurance contributions also move with the minimum wage. The contribution floor goes up, and so does the cap on unemployment insurance contributions, so check payroll settings as well as base pay.

3. Malaysia: RM2,000 from June 2027

Prime Minister Anwar Ibrahim announced in the 2027 budget on October 9, 2026, that the national minimum wage will rise from RM1,700 to RM2,000 a month in June 2027. The change covers more than 4 million workers. MSMEs with annual sales below RM50 million will be exempt.

The government hasn't yet said how long the exemption lasts, how eligibility will be assessed (for example, whether related companies are counted together) or what transition rules will apply. The Malaysian Employers Federation has asked for these details quickly. The binding rate and start date will be set in the minimum wages order, so don't treat the budget announcement as final.

4. Indonesia: the 2027 formula is still open

Indonesia's provincial minimum wage (UMP) is set by each provincial governor using a formula issued by the central government. It is usually announced in November and takes effect on January 1. For 2027, the central government has sent mixed signals:

Parliament passed a new manpower protection law on October 6, but it has not yet been promulgated. That could push the 2027 announcements later than usual and change the basis for calculating them.

5. Thailand: the Wage Committee hasn't met

Thailand's Wage Committee is a tripartite body of government, employer and worker representatives. It reviews daily minimum wages by province and sector, and its decisions take effect once published in the Royal Gazette.

The committee was due to meet in mid-August. That meeting was pushed to September, and the session planned for September 29 didn't go ahead either. No new date has been set. The labor minister has said 2027 rates will follow the usual province-by-province and sector-by-sector process, depending on economic conditions. He would not commit to a decision this year or to an increase in early 2027.

6. How should you budget for 2027?

A higher minimum wage also raises overtime, rest-day and public-holiday pay, and often social security contributions, so build these knock-on costs into your model.

7. A quick compliance checklist

8. The bottom line

As of October 26, 2026, Vietnam plans a 7.8% average increase from January 1, 2027, and Malaysia will move to RM2,000 in June 2027. Indonesia hasn't settled its formula, and Thailand's Wage Committee hasn't met. For 2027 planning:

1. Budget Vietnam and Malaysia on the announced figures, and watch for the decree and the minimum wages order.
2. Hold a range for Indonesia and Thailand, then apply the new rates from their effective dates.
3. Factor in overtime, holiday pay and contribution bases, not just base salaries.

9. About Knit People

Knit People was founded in Canada in 2015 and began as a global payroll provider. It runs four operations centers, in Canada, China, the Philippines and Europe, and holds a government-registered MSB license. Its core services are employer of record (EOR), professional employer organization (PEO), global payroll and contractor of record (COR). It also offers recruitment, entity setup, tax compliance, benefits administration and work visa support. Knit People combines regional operations centers with in-country experts. It covers 172 countries and regions, has served more than 4,000 companies and 12,000 employees, and processes over RMB 4 billion in payroll a year.

10. FAQ

Q1：Will Thailand raise its minimum wage in 2027?

It hasn't been decided. Wage Committee meetings planned for August and September 29, 2026, did not take place, and no new date has been set. The labor minister has said 2027 rates will follow the usual province-by-province process, but has not committed to an increase in early 2027. Current daily rates are THB 337–400.

Q2：What will Vietnam's minimum wage be in 2027?

The National Wage Council has agreed an average 7.8% increase from January 1, 2027. Proposed monthly rates are VND 5.70 million (Region I), 5.08 million (Region II), 4.45 million (Region III) and 4.04 million (Region IV). The government decree has not yet been signed.

Q3：When does Malaysia's minimum wage rise to RM2,000?

Malaysia's 2027 budget says the minimum wage will rise from RM1,700 to RM2,000 a month in June 2027. MSMEs with annual sales under RM50 million will be exempt. The exact start date and exemption rules will be set in the minimum wages order.

Q4：When will Indonesia announce its 2027 minimum wages?

No date has been set. In early October, the Ministry of Manpower said it would keep the PP 49/2025 formula. On October 21, the minister said the formula would follow the new manpower law instead, and provinces are waiting for technical guidance. Provincial minimum wages are normally announced in November and take effect on January 1.

Q5：How should employers budget for 2027 minimum wages in Southeast Asia?

Use the proposed 7.8% rates for Vietnam. Model RM2,000 for June to December 2027 in Malaysia after checking whether you qualify for the exemption. Reserve 7%–10% for Indonesia. For Thailand, use current rates for the first half of the year and hold a modest buffer.

11. Sources

1. Vietnam Government News: Regional minimum wage may increase from January 1, 2027 (July 22, 2026) (accessed October 26, 2026)
2. Thư Viện Pháp Luật: Regional minimum wages now and from January 1, 2027 (in Vietnamese) (accessed October 26, 2026)
3. The Star: Budget 2027: Minimum wage to rise to RM2,000 from June 2027 (October 9, 2026) (accessed October 26, 2026)
4. Malay Mail: MEF welcomes RM2,000 minimum wage (October 9, 2026) (accessed October 26, 2026)
5. Katadata: Ministry of Manpower: 2027 minimum wage still based on PP (October 6, 2026, in Indonesian) (accessed October 26, 2026)
6. CNN Indonesia: Minister: 2027 UMP formula to follow new law (October 21, 2026, in Indonesian) (accessed October 26, 2026)
7. Matichon: Minimum wage still undecided (October 24, 2026, in Thai) (accessed October 26, 2026)
8. DLA Piper: Thailand increases minimum wage across all provinces (July 2025) (accessed October 26, 2026)

Update log

• October 27, 2026: First published

Disclaimer: This article is based on government publications and media reports available as of October 26, 2026. It is for general information only and is not legal advice. Vietnam's decree, Malaysia's minimum wages order, and Indonesia's and Thailand's 2027 rates apply only once officially published. Please consult a qualified local employment lawyer about your specific situation.