What Salary is Subject to Personal Income Tax? [New 2026 – Detailed Guide]

Personal income tax is a topic of interest for many employees, but not everyone clearly understands how it’s calculated or at what income level it becomes payable. So, in 2026, what salary is subject to personal income tax? What is the current family circumstance deduction amount? The article below will provide a detailed guide on how to determine the income threshold for tax liability, the latest PIT calculation formula, and a quick way to check the tax payable for different actual salary levels.

What Salary is Subject to Personal Income Tax? (New for 2026)

According to Resolution 110/2025/UBTVQH15, effective from January 1, 2026, an employee with no registered dependents will be required to pay personal income tax if their total income (after deductions) exceeds 15.5 million VND/month (equivalent to 186 million VND/year).

The income used for tax calculation is the remaining amount after deducting items such as:

• Compulsory insurance, voluntary pension funds, and contributions to charity, humanitarian aid, and education promotion.
• Tax-exempt incomes as stipulated by regulations.
• Certain amounts not included in taxable income, such as allowances, subsidies, mid-shift meal allowances, etc.

In cases where the taxpayer has registered dependents, an additional deduction of 6.2 million VND/month per dependent will be applied when calculating personal income tax.

Who Qualifies as a Dependent?

According to the 2025 Law on Personal Income Tax, effective from January 1, 2026, a dependent is an individual for whom the taxpayer is directly responsible for nurturing, including:

• Children under 18 years of age.
• Adult children who have lost their civil act capacity, are disabled, or are unable to work.
• Children attending university, college, intermediate school, or vocational training with no income or low income as prescribed.
• A spouse who is unable to work.
• Parents who are beyond working age or unable to work.
• Other individuals without support whom the taxpayer is directly caring for and nurturing in accordance with the law.

Personal Income Tax Calculation Table for Specific Salary Levels

To help employees easily visualize the monthly personal income tax they need to pay, below is an illustrative calculation table based on common salary levels today. The table is constructed based on the latest PIT calculation formula for 2026.

Note: The income subject to insurance contributions is assumed to be equal to the total monthly income.

From the table above, it can be seen that raising the family circumstance deduction for individuals and dependents has significantly reduced employees’ tax obligations. In particular, those with an income of less than 20 million VND/month and at least one dependent will almost be exempt from paying personal income tax.

Deductions Before Calculating Personal Income Tax

In addition to the family circumstance deduction, employees can also exclude certain incomes when calculating personal income tax, including:

• Lunch and mid-shift meal allowances within the limits prescribed by law.
• Allowances such as phone, uniform, and business travel expenses if paid according to regulations.
• Severance pay, unemployment benefits, or one-time allowances for job transfers.
• Income from overtime and night work that is paid at a higher rate than the regular salary.
• Mandatory insurance contributions such as social insurance, health insurance, and unemployment insurance paid by the employee.
• Contributions to charitable, humanitarian, or educational promotion activities with valid supporting documents.

To better understand how to declare, finalize, and manage corporate taxes, you can refer to the article what is tax accounting. The article will help you understand the role of a tax accountant in processing documents, calculating, and finalizing personal income tax for employees.

5 Progressive Personal Tax Brackets Under Current Law

Currently, personal income tax is applied using a progressive method. This means that the higher the income, the portion of income exceeding the specified thresholds will be subject to a higher tax rate, instead of the entire income being taxed at a single rate.

According to the new regulations, the personal income tax schedule consists of 5 brackets with tax rates ranging from 5% to 35%, as follows:

Read more: What is Corporate Income Tax?

Latest Detailed Formula for Calculating Personal Income Tax 2026

How to Calculate PIT for Resident Individuals

Employees with labor contracts who are considered residents are eligible for family circumstance deductions and are subject to tax based on a progressive tax schedule. This rule remains the same whether you are working for multiple employers simultaneously or have left a job during the year.

PIT Calculation Formula

PIT payable = Taxable income × Tax rate

Amounts not included in taxable income:

• Meal allowances
• Phone and communication allowances
• Clothing and uniform allowances
• Actual business travel expenses
• Overtime and night shift pay (the portion paid higher than a regular day’s wage)

Deductions calculated before determining taxable income

1. Family circumstance deductions (updated 2026)

• For the taxpayer: 15.5 million VND/month (186 million VND/year)
• For each dependent: 6.2 million VND/month

2. Mandatory insurance based on salary deduction rates:

• Social Insurance (SI): 8%
• Health Insurance (HI): 1.5%
• Unemployment Insurance (UI): 1%
• Special occupational insurance (if required by the industry)

3. Additional voluntary deductible amounts: Contributions to charities, humanitarian funds, educational promotion funds, and voluntary pension insurance are all deductible before calculating taxable income.

Progressive tax schedule for 2026

TNTT = Taxable Income

Practical Example

Mr. A signs a labor contract of over 3 months with a company in Hanoi with the following details:

• Contractual salary: 30,000,000 VND/month
• Lunch allowance: 700,000 VND
• Registered dependents: 1 person
• No charitable or humanitarian contributions made during the period

Step 1: Determine assessable income

Total income received = 30,000,000 + 700,000 = 30,700,000 VND

Tax-exempt amount (lunch) = 700,000 VND

Assessable income = 30,700,000 – 700,000 = 30,000,000 VND

Step 2: Calculate deductions

Social Insurance (8%) = 30,000,000 × 8% = 2,400,000 VND

Health Insurance (1.5%) = 30,000,000 × 1.5% = 450,000 VND

Unemployment Insurance (1%) = 30,000,000 × 1% = 300,000 VND

Total compulsory insurance = 3,150,000 VND

Personal deduction = 15,500,000 VND

Deduction for 1 dependent = 6,200,000 VND

Total family circumstance deduction = 21,700,000 VND

Step 3: Calculate taxable income

Taxable income = 30,000,000 – (3,150,000 + 21,700,000) = 5,150,000 VND

Step 4: Calculate tax payable

A taxable income of 5,150,000 VND falls into Tier 1 (under 10 million), with a tax rate of 5%:

Personal Income Tax = 5% × 5,150,000 = 257,500 VND/month

How to Calculate Personal Income Tax for Non-residents

Unlike domestic employees, non-residents in Vietnam are not eligible for the progressive tax schedule or family circumstance deductions. Instead, according to Article 21 of the 2025 Law on Personal Income Tax, all income generated in Vietnam is subject to a single flat tax rate:

PIT payable = 20% × Assessable income

Assessable income here includes salary, bonuses, and all other income received during the tax period (no deductions are allowed).

Case of Working in Both Vietnam and Abroad

In reality, many foreign experts are responsible for work in Vietnam while also handling tasks for their corporation in other countries. When it is not possible to clearly separate which portion of income is generated in Vietnam, the law provides two calculation methods depending on whether the person is present in Vietnam.

Case 1: Foreigner working for Vietnam but not present in Vietnam

Assessable income in Vietnam = (Number of working days in Vietnam / Total working days in the year) × Total global income + Other income generated in Vietnam

Where:

• Total working days in the year are calculated according to the provisions of the Vietnam Labor Code
• Other income generated in Vietnam includes all non-salary benefits such as housing, transportation, children’s school fees, etc. (whether paid in cash or in kind, as long as it is paid by or on behalf of the company for the employee)

Example: Mr. David (British) works in London but is in charge of a project for the parent company in Vietnam. His global salary is 2,400,000,000 VND/year. During the year, he spent 60 working days on the Vietnam project out of a total of 260 working days. Additionally, the company paid for his business flight tickets to Vietnam: 30,000,000 VND.

Assessable income in VN = (60/260) × 2,400,000,000 + 30,000,000 = 553,846,154 + 30,000,000 ≈ 583,846,154 VND

PIT payable = 20% × 583,846,154 ≈ 116,769,231 VND

Case 2: Foreigner present in Vietnam during the year

(Example: Coming to Vietnam for business or working directly at the office)

Assessable income in Vietnam = (Number of days present in Vietnam / 365 days) × Total global salary + Other income generated in Vietnam

Specifically, instead of counting working days, this case is calculated based on the actual number of days present in Vietnamese territory (including arrival/departure days, weekends, and holidays if present here).

Example: Ms. Sarah (Australian) was sent by her corporation to work directly in Vietnam. During the year, she was present in Vietnam for 120 days. Her global salary is 1,800,000,000 VND/year. The company paid for her apartment rent in Hanoi: 60,000,000 VND.

Assessable income in VN = (120/365) × 1,800,000,000 + 60,000,000 = 591,780,822 + 60,000,000 ≈ 651,780,822 VND

PIT payable = 20% × 651,780,822 ≈ 130,356,164 VND

See more: Top 15+ Best Payroll Software Today (Latest 2026)

How to Reduce Your Personal Income Tax Payable

A fairly common reality today: two employees both receive a salary of 25,000,000 VND/month and contribute to the same insurance, but the amount of PIT they have to pay is completely different. One person pays 487,500 VND, while the other pays nothing (applying the latest 2026 family circumstance deduction levels and the 5-tier progressive tax schedule).

The reason lies in the number of dependents each person registers for deduction. Each eligible dependent helps reduce taxable income by an additional 6.2 million VND (a large enough amount to bring one person below the tax threshold while the other still has to pay).

Therefore, if you are raising young children, supporting elderly parents, or have relatives who qualify as dependents according to regulations, do not skip the step of registering dependents for family circumstance deductions. This is a completely legal way to significantly reduce the amount of PIT you have to pay each month.

Which Cases Are Exempt from Personal Income Tax?

Not every individual with an income has to pay personal income tax. In fact, many cases are still tax-exempt or have not yet reached the tax payment threshold, including:

• Individuals with income below 15.5 million VND/month after family circumstance deductions
• For cases with dependents, the deduction amount will be increased by 6.2 million VND/month/dependent, thereby raising the taxable income threshold.
• Seasonal workers or those with contracts under 3 months are typically subject to a 10% tax withholding if their income is 2 million VND or more per payment. However, if their total annual income after deductions does not reach the taxable threshold, the individual will not have tax withheld and will be eligible for a personal income tax refund (if they have overpaid their tax liability).
• High-quality digital technology personnel are exempt from tax for 5 years (starting from their first labor contract).

What’s New in Personal Income Tax Calculation for 2026?

Significant Increase in Family Circumstance Deductions from 01/01/2026

This is the most anticipated adjustment in 2026, directly impacting the finances of millions of employees. Specifically:

• For the taxpayer themselves: increasing from 11 million to 15.5 million VND/month (equivalent to 186 million/year)
• For each dependent: increasing from 4.4 million to 6.2 million VND/month

Consequently, the minimum gross salary threshold for tax liability is also significantly raised. The specifics are as follows:

High-quality tech professionals are exempt from tax for 5 years

Starting from January 1, 2026, a special group of individuals will be completely exempt from Personal Income Tax (PIT) for 5 years from their first labor contract, including those working in the following fields:

• Projects within concentrated digital technology zones
• Research and development of semiconductor chips, artificial intelligence (AI), and key national digital technology products
• Training human resources for the digital technology sector

Proposal to reduce the progressive tax schedule from 7 tiers to 5 tiers

Instead of the current 7 tiers, as of January 1, 2026, the tax authority has simplified it to 5 tiers, making the tax calculation more transparent, easier to understand, and reducing the burden on middle-income groups.

In summary: From 2026, individuals with a salary below 17 million VND/month and no dependents will no longer have to pay PIT. Specifically, high-level digital technology personnel will be exempt from tax for a full 5 years. This is considered the largest tax burden relief for employees in the last decade.

Frequently Asked Questions (FAQ)

How much tax is paid on a 10 million VND salary?

With a salary of 10 million VND/month, an employee does not currently have to pay personal income tax. After applying the family circumstance deduction of 15.5 million VND/month according to the 2026 regulations, the taxable income is 0, so no PIT is incurred.

Is tax payable on a salary of 11 million VND?

If the only income is a salary of 11 million VND/month and there is no other income, the employee will not have to pay personal income tax. This is because the personal family circumstance deduction for 2026 is 15.5 million VND/month, which is higher than this income level.

How much tax is paid on a 12 million VND salary?

With a salary of 12 million VND/month, an employee also does not currently have to pay PIT. After applying the family circumstance deduction, the taxable income is 0, so the amount of tax payable is 0 VND.

Is additional income (freelance, overtime) subject to tax?

Yes. All legal income from salaries, wages, or other sources is added to the total taxable income. If the total income after applying deductions exceeds the prescribed threshold, the employee must still declare and pay personal income tax.

Who has to pay personal income tax in Vietnam?

In Vietnam, those required to pay personal income tax fall into 2 main groups:

• Resident individuals: These are individuals who live and work long-term in Vietnam, meeting one of the conditions such as being present in Vietnam for 183 days or more in a year or having a regular place of residence (permanent residence, long-term temporary residence, long-term rental housing, etc.). This group must declare and pay tax on income generated both within and outside of Vietnam.
• Non-resident individuals: These are individuals who do not meet the residency conditions but have taxable income generated in Vietnam. In this case, they must still pay PIT according to current regulations.

Are Tet bonuses and performance bonuses subject to tax?

Yes. Bonuses such as Tet bonuses, KPI bonuses, performance bonuses, or sales bonuses are all included in personal taxable income and will be combined with salary to calculate PIT.

How is personal income tax calculated when working in 2 places at the same time?

When working for 2 companies simultaneously, personal income tax is usually calculated based on the progressive tax schedule at the places with labor contracts of 3 months or more. For irregular income or short-term contracts, the company may withhold 10% before payment.

The employee can only register for family circumstance deductions for themselves and their dependents at a single location, and must also self-finalize their taxes at the end of the year to consolidate all generated income.

How do you register dependents to receive deductions?

An employee can register dependents through their paying company or directly with the tax authority. The application usually includes form 07/ĐK-NPT-TNCN according to Circular 80/2021/TT-BTC, along with documents proving the relationship, such as a birth certificate, citizen identification card (CCCD), or marriage certificate. The registration must be completed before the tax finalization period to be eligible for the family circumstance deduction for 2026.

Conclusion