{"id":1168,"date":"2025-12-15T09:37:34","date_gmt":"2025-12-15T00:37:34","guid":{"rendered":"https:\/\/est.haro-inc.com\/?p=1168"},"modified":"2026-09-22T12:58:17","modified_gmt":"2026-09-22T03:58:17","slug":"vietnam-pit-guide","status":"publish","type":"post","link":"https:\/\/est.haro-inc.com\/en\/tax-pit-en\/vietnam-pit-guide\/","title":{"rendered":"Understanding Vietnam\u2019s Personal Income Tax (PIT): How It Works and the Calculation Steps \u2014 Explained Clearly with Deductions and Tax Rates"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">\nFor Japanese companies operating subsidiaries in Vietnam,\n<strong><span class=\"swl-inline-color has-swl-deep-01-color\">Personal Income Tax (PIT)<\/span><\/strong>\nis an essential system to understand, alongside payroll calculations.<br>\nThe taxable amount can vary significantly depending on social insurance contributions, various allowances, and dependent deductions, and misunderstandings may lead to tax compliance risks.\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\nIn this article, we explain Vietnam\u2019s\n<span class=\"swl-marker mark_orange\"><strong>PIT system from its basic structure to deductions and calculation steps<\/strong><\/span>\nin a clear and practical manner.\n<\/p>\n\n\n\n<div class=\"wp-block-group is-style-big_icon_information\"><div class=\"wp-block-group__inner-container\">\n<p class=\"wp-block-paragraph\"><strong>[Amended PIT Law \u2014 In force since July 1, 2026]<\/strong><br>\nThis article reflects the <strong><span class=\"swl-inline-color has-swl-deep-01-color\">amended Law on Personal Income Tax (Law No. 109\/2025\/QH15)<\/span><\/strong>, which took effect on July 1, 2026 and repealed the former law (Law No. 04\/2007\/QH12). The progressive tax brackets were <strong>simplified from seven to five<\/strong>, and both the personal and dependent deductions were increased.<br>\nNote that the <strong>increased deductions for employment income<\/strong> apply retroactively to <strong>tax periods beginning January 1, 2026<\/strong>, under Resolution 110\/2025\/UBTVQH15.<\/p>\n<\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What Is Personal Income Tax (PIT) in Vietnam?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">\nPersonal Income Tax (PIT) is a tax imposed on income earned by individuals.<br>\nIn Vietnam, <span class=\"swl-marker mark_orange\"><strong>income derived from employment<\/strong><\/span>, such as salaries, bonuses, and allowances, is the primary taxable income.\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\nIn payroll operations, PIT is calculated and withheld\n<span class=\"swl-marker mark_orange\"><strong>on a monthly basis at source<\/strong><\/span>,\nand the employer is responsible for remitting it to the tax authorities.\n<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Main Types of Income Subject to PIT<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">\nThe following types of payroll-related income are generally subject to PIT:\n<\/p>\n\n\n\n<div class=\"wp-block-group is-style-big_icon_good\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list\">\n<li>Basic salary<\/li>\n\n\n\n<li>Position and job-related allowances<\/li>\n\n\n\n<li>Overtime, night work, and holiday work wages<\/li>\n\n\n\n<li>Other taxable allowances<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">\nOn the other hand, reimbursements and welfare-type benefits may be treated as non-taxable if certain conditions are met.\n<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Concept of Deductions in PIT Calculation<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">\nPIT is not calculated simply by applying tax rates to gross income.<br>\nTax rates are applied to <span class=\"swl-marker mark_orange\"><strong>taxable income after deductions<\/strong><\/span>, as outlined below.\n<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">\u2460 Social Insurance Contributions<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">\nThe following employee-borne social insurance contributions are deductible when calculating PIT:\n<\/p>\n\n\n\n<div class=\"wp-block-group has-border -border02 is-style-bg_grid\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list\">\n<li>Social Insurance (SI)<\/li>\n\n\n\n<li>Health Insurance (HI)<\/li>\n\n\n\n<li>Unemployment Insurance (UI)<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">\u2461 Personal Deduction<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">\nVietnam allows a <span class=\"swl-marker mark_orange\"><strong>fixed monthly personal deduction<\/strong><\/span> for each taxpayer.<br>\nThe current amount is <strong><span class=\"swl-inline-color has-swl-deep-01-color\">15,500,000 VND per month<\/span><\/strong> (186,000,000 VND per year).\n<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">\u2462 Dependent Deduction<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">\nIf certain conditions are met, taxpayers may apply\n<span class=\"swl-marker mark_orange\"><strong>dependent deductions<\/strong><\/span>\nfor eligible dependents.<br>\nThe current amount is <strong><span class=\"swl-inline-color has-swl-deep-01-color\">6,200,000 VND per month<\/span><\/strong> for each qualifying dependent.\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\nTo claim dependent deductions,\n<span class=\"swl-marker mark_orange\"><strong>prior registration and proper documentation<\/strong><\/span>\nare essential.\n<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Type of Deduction<\/th><th>Former (until Dec 2025)<\/th><th>Current (from Jan 2026)<\/th><\/tr><\/thead><tbody><tr><td>Personal deduction<\/td><td>11,000,000 VND\/month<\/td><td><strong>15,500,000 VND\/month<\/strong><\/td><\/tr><tr><td>Dependent deduction (per dependent)<\/td><td>4,400,000 VND\/month<\/td><td><strong>6,200,000 VND\/month<\/strong><\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Note: The increased deductions apply to tax periods beginning January 1, 2026, under Resolution 110\/2025\/UBTVQH15.<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">PIT Calculation Steps (Practical Workflow)<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">\nIn payroll practice, PIT is calculated using the following steps:\n<\/p>\n\n\n\n<div class=\"wp-block-group has-border -border02 is-style-bg_grid\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list\">\n<li>Determine total taxable income (gross income)<\/li>\n\n\n\n<li>Deduct social insurance contributions<\/li>\n\n\n\n<li>Apply personal and dependent deductions<\/li>\n\n\n\n<li>Calculate taxable income<\/li>\n\n\n\n<li>Apply progressive tax rates to calculate PIT<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">\nVietnam applies <span class=\"swl-marker mark_orange\"><strong>progressive tax rates<\/strong><\/span>,\nmeaning higher income levels are subject to higher marginal tax rates.\n<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Current Progressive PIT Tax Rates (from July 1, 2026)<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">\nVietnam\u2019s Personal Income Tax applies\n<span class=\"swl-marker mark_orange\"><strong>progressive tax rates to taxable income<\/strong><\/span>.<br>\nUnder the amended PIT Law (Law No. 109\/2025\/QH15), effective July 1, 2026, the brackets were <strong>simplified from seven to five<\/strong>. The table below shows the current tax rates based on\n<span class=\"swl-marker mark_orange\"><strong>monthly taxable income<\/strong><\/span>.\n<\/p>\n\n\n\n<figure class=\"wp-block-table\">\n<table class=\"has-fixed-layout\">\n<thead>\n<tr><th>Monthly Taxable Income<\/th><th>Tax Rate<\/th><\/tr>\n<\/thead>\n<tbody>\n<tr><td>Up to 10,000,000 VND<\/td><td>5%<\/td><\/tr>\n<tr><td>10,000,001 \u2013 30,000,000 VND<\/td><td>10%<\/td><\/tr>\n<tr><td>30,000,001 \u2013 60,000,000 VND<\/td><td>20%<\/td><\/tr>\n<tr><td>60,000,001 \u2013 100,000,000 VND<\/td><td>30%<\/td><\/tr>\n<tr><td>Over 100,000,000 VND<\/td><td>35%<\/td><\/tr>\n<\/tbody>\n<\/table>\n<figcaption class=\"wp-element-caption\">Source: Amended Law on Personal Income Tax (Law No. 109\/2025\/QH15), Article 9 \u2014 effective July 1, 2026<\/figcaption>\n<\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">\nIt is important to note that these rates are\n<span class=\"swl-marker mark_orange\"><strong>applied progressively by income bracket<\/strong><\/span>.<br>\nEven for high taxable income, the highest tax rate does not apply to the entire amount.\n<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What Changed (Comparison with the Former Rates)<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">\nCompared with the former seven-bracket structure that applied until June 30, 2026, the changes are as follows:\n<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Item<\/th><th>Former (until June 30, 2026)<\/th><th>Current (from July 1, 2026)<\/th><\/tr><\/thead><tbody><tr><td>Number of brackets<\/td><td>7<\/td><td><strong>5<\/strong><\/td><\/tr><tr><td>Applicable rates<\/td><td>5 \/ 10 \/ 15 \/ 20 \/ 25 \/ 30 \/ 35%<\/td><td><strong>5 \/ 10 \/ 20 \/ 30 \/ 35%<\/strong><\/td><\/tr><tr><td>Threshold for the top 35% rate<\/td><td>Over 80,000,000 VND<\/td><td><strong>Over 100,000,000 VND<\/strong><\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Note: The abolished 15% and 25% brackets, and the 5,000,000 \/ 18,000,000 \/ 32,000,000 \/ 52,000,000 VND thresholds, no longer apply on or after July 1, 2026.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">\nThe amendment reduces the tax burden mainly for middle-income earners. For expatriates on net salary (take-home guarantee) contracts, it also <strong>lowers the employer&#8217;s cost in gross-up calculations<\/strong>.\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\nNote that the rate for non-residents (individuals present in Vietnam for fewer than 183 days in a calendar year) remains <strong>a flat 20% on Vietnam-sourced income<\/strong>, unchanged by the amendment.\n<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Common Practical Pitfalls<\/h2>\n\n\n\n<div class=\"wp-block-group is-style-big_icon_caution\"><div class=\"wp-block-group__inner-container\">\n<ul class=\"wp-block-list\">\n<li>Misclassification of taxable and non-taxable allowances<\/li>\n\n\n\n<li>Failure to register dependents or maintain documentation<\/li>\n\n\n\n<li>Miscalculation of social insurance deductions<\/li>\n\n\n\n<li>Payroll systems still configured with the former seven-bracket rate table<\/li>\n\n\n\n<li>Failure to retroactively adjust January\u2013June 2026 payroll that was calculated using the former deductions (11,000,000 \/ 4,400,000 VND)<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">\nThese issues are commonly pointed out during tax audits.\n<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Relationship with PIT Law Amendments<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">\nThe amended PIT Law (Law No. 109\/2025\/QH15) <strong>has been in force since July 1, 2026<\/strong>.<br>\nPlease also refer to the following article for details of the amendment and practical guidance.\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\n\u25b6 Related article:\n<a href=\"https:\/\/est.haro-inc.com\/tax-pit\/vietnam-pit-law-amendment-2026\/\">\nVietnam National Assembly Passes Personal Income Tax Law Amendment \u2014 Effective July 1, 2026\n<\/a>\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\nImplementing decrees and circulars may still be issued or updated, so please continue to confirm the latest regulations.\n<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Relationship with Overall Payroll Processing<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">\nPIT is closely related to payroll calculations, overtime pay, allowances, and social insurance.<br>\nRather than understanding each system in isolation, it is important to\n<span class=\"swl-marker mark_orange\"><strong>view PIT as part of the overall payroll process<\/strong><\/span>.\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\n\u25b6 Related articles:<br>\n<a href=\"https:\/\/est.haro-inc.com\/payroll\/vietnam-payroll-rule\/\">\nVietnam Payroll Calculation Rules: Complete Guide\n<\/a><br>\n<a href=\"https:\/\/est.haro-inc.com\/payroll\/vietnam-allowance-tax-insurance\/\">\nAllowances in Vietnam: Tax and Social Insurance Treatment\n<\/a>\n<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Summary<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">\nBy correctly understanding the\n<span class=\"swl-marker mark_orange\"><strong>deduction mechanisms and calculation steps<\/strong><\/span>\nof Vietnam\u2019s Personal Income Tax (PIT), companies can ensure accurate and compliant tax processing.\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\nFollowing the amendment effective July 1, 2026, there are now <strong>five tax brackets<\/strong>, with a <strong>personal deduction of 15,500,000 VND and a dependent deduction of 6,200,000 VND<\/strong>. We recommend reviewing whether your\n<span class=\"swl-marker mark_orange\"><strong>payroll system settings reflect these current values<\/strong><\/span>.\n<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\nManaging PIT together with payroll structure, allowances, and social insurance\n<span class=\"swl-marker mark_orange\"><strong>in an integrated manner<\/strong><\/span>\nis key to reducing tax and labor compliance risks.\n<\/p>\n\n\n<div class=\"p-blogParts post_content\" data-partsID=\"983\">\n<div class=\"swell-block-fullWide pc-py-60 sp-py-40 has-bg-img alignfull lazyload\" style=\"background-color:rgba(247, 247, 247, 0.41)\" data-bg=\"http:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/DSC_1122.jpg\"><div class=\"swell-block-fullWide__inner l-article\">\n<div class=\"wp-block-columns\">\n<div class=\"wp-block-column\">\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"600\" height=\"400\" src=\"http:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta2.png\" alt=\"\" class=\"wp-image-504\" srcset=\"https:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta2.png 600w, https:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta2-300x200.png 300w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure>\n\n\n\n<div class=\"swell-block-button blue_ is-style-btn_normal\"><a href=\"https:\/\/est.haro-inc.com\/en\/download\/\" class=\"swell-block-button__link\"><span>Download Document<\/span><\/a><\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column\">\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"600\" height=\"400\" src=\"http:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta1.png\" alt=\"\" class=\"wp-image-505\" srcset=\"https:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta1.png 600w, https:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/11\/cta1-300x200.png 300w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure>\n\n\n\n<div class=\"swell-block-button green_ is-style-btn_normal\"><a href=\"https:\/\/est.haro-inc.com\/en\/contact\/\" class=\"swell-block-button__link\"><span>Contact<\/span><\/a><\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>For Japanese companies operating subsidiaries in Vietnam, Personal Income Tax (PIT) is an essential system to understand, alongside payroll calculations. The taxable amount can vary significantly depending on social insurance contributions, various allowances, and dependent deductions, and misunderstandings may lead to tax compliance risks. In this article, we explain Vietnam\u2019s PIT system from its basic [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1165,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"swell_btn_cv_data":"","_locale":"en_US","_original_post":"https:\/\/est.haro-inc.com\/?p=1161","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25],"tags":[],"class_list":["post-1168","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-pit-en","en-US"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/est.haro-inc.com\/wp-content\/uploads\/2025\/12\/column6.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/posts\/1168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/comments?post=1168"}],"version-history":[{"count":3,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/posts\/1168\/revisions"}],"predecessor-version":[{"id":1646,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/posts\/1168\/revisions\/1646"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/media\/1165"}],"wp:attachment":[{"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/media?parent=1168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/categories?post=1168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/est.haro-inc.com\/wp-json\/wp\/v2\/tags?post=1168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}