Job Alerts
- Base salary of VND 2,530,000/month, effective July 1, 2026 under Decree 161/2026/ND-CP.
- New regional minimum wages, effective January 1, 2026 under Decree 293/2025/ND-CP.
- Personal allowance of VND 15.5 million/month and dependent allowance of VND 6.2 million/month under Resolution 110/2025/UBTVQH15.
- Progressive tax schedule reduced from 7 brackets to 5 under the 2025 Personal Income Tax Law.
1. What is personal income tax?
Personal income tax (PIT) is an amount that individuals with income must pay to the state budget from salary or other income after applicable deductions. It is a direct tax; individuals with higher income generally pay more tax.
PIT does not apply to low taxable income: after compulsory insurance and personal/dependent deductions, the remaining amount is used as the tax base.
2. Individuals subject to personal income tax
Resident individuals
A resident is an individual present in Vietnam for 183 days or more in a calendar year or 12 consecutive months, or having a regular place of residence in Vietnam. Residents are taxed on income arising in Vietnam and overseas and may claim personal and dependent deductions.
Non-resident individuals
A non-resident does not meet the above conditions and is taxed only on income arising in Vietnam, generally at 20%, without personal and dependent deductions.
3. PIT calculation formula for residents under the new rules
Tax point: when the income-paying organization or individual makes payment.
3.1. Employment contracts of 3 months or more
Taxable income = Assessable income − Deductions
Assessable income = Total income − Tax-exempt amounts − Compulsory insurance
Four calculation steps:
- Determine total salary, allowances, and bonuses.
- Deduct tax-exempt amounts such as overtime differentials, eligible meal allowances, and valid business-trip expenses.
- Deduct SI 8% + HI 1.5% + UI 1% subject to applicable ceilings.
- Deduct VND 15,500,000 for the taxpayer and VND 6,200,000 for each dependent.
Example: Gross salary VND 45,000,000, Region I, 2 dependents: insurance VND 4,725,000; assessable income VND 12,375,000; tax VND 737,500; Net VND 39,537,500.
3.2. Employment contracts under 3 months
Applies when paying VND 2,000,000 or more per payment to an individual without an employment contract or under a contract shorter than 3 months; no personal/dependent deductions or progressive schedule applies.
3.3. Method summary
| Case | Method | Personal/dependent deductions |
|---|---|---|
| Resident, employment contract ≥ 3 months | 5-bracket progressive | Yes |
| Resident, employment contract < 3 months | 10% when payment ≥ VND 2 million | No |
| Non-resident | 20% | No |
4. PIT calculation for non-residents
Non-residents do not receive personal/dependent deductions and pay tax for each occurrence of income.
4.1. Foreign individuals not physically present in Vietnam
Example: global income of VND 1.2 billion and 40/240 working days for a Vietnam project results in VND 200 million of taxable income and VND 40 million of tax.
4.2. Foreign individuals physically present in Vietnam
Example: 90 days in Vietnam and global income of VND 2 billion results in approximately VND 493,150,685 of taxable income and approximately VND 98,630,137 of tax.
5. Important rules to note
- Each dependent can be claimed only once by one taxpayer in a year.
- Monthly or quarterly filing and payment deadlines follow the Law on Tax Administration.
- Individuals must finalize tax no later than the last day of the fourth month after the end of the calendar year.
- Finalization is not required when additional tax payable is VND 50,000 or less or when no refund of overpaid tax is requested.
- A tax identification number is required for dependent deductions and refunds; from July 1, 2025, the personal identification number is used instead of the tax ID.
- Individuals earning income from two or more places generally have to finalize tax directly with the tax authority.
