How Income Tax Works in Vietnam (2026)
Vietnam reformed personal income tax in 2026 (Law 109/2025): 7 brackets became 5, and personal deductions rose sharply. Taxable income = gross − insurance − VND 15.5M personal deduction − VND 6.2M per dependent.
The 2026 PIT brackets (monthly)
| Monthly taxable income (VND) | Rate |
|---|---|
| Up to 10,000,000 | 5% |
| 10,000,001 – 30,000,000 | 10% |
| 30,000,001 – 60,000,000 | 20% |
| 60,000,001 – 100,000,000 | 30% |
| Over 100,000,000 | 35% |
Worked example
Monthly salary of VND 30,000,000 (local, no dependants): SI 2.4M + HI 0.45M + UI 0.3M = 3.15M. Taxable = 30 − 3.15 − 15.5 = 11.35M. PIT = 500,000 + 10% × 1.35M = VND 635,000. Take-home ≈ VND 26,215,000.
Mandatory insurance
Employees pay 8% social + 1.5% health (capped at VND 50.6M/month from July 2026), plus 1% unemployment for Vietnamese nationals — foreigners are exempt from UI.
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Another worked example
Monthly salary of VND 30,000,000 (local, 1 dependent): insurance = 2.4M + 0.45M + 0.3M = VND 3.15M. Taxable = 30 − 3.15 − 15.5 − 6.2 = VND 5.15M. PIT = 5% × 5.15M = VND 257,500. Take-home = 30,000,000 − 3,150,000 − 257,500 = VND 26,592,500.
Reading your Vietnamese payslip
Three insurance lines — BHXH 8% (social), BHYT 1.5% (health), BHTN 1% (unemployment) — then PIT. Check the social-insurance cap: 8% stops at 20× the base salary (VND 50.6M/month), so high earners shouldn't see BHXH scaling forever. Foreign employees: the BHTN line should be absent — you're exempt. The VND 15.5M personal deduction and VND 6.2M per dependent are computed inside the PIT line, not shown separately.
Common mistakes
1. The old 7-band PIT system. The 2026 reform collapsed it to five bands.
2. The old VND 11M personal deduction. Now VND 15.5M (dependents VND 6.2M each).
3. Unemployment insurance for foreigners. Foreign employees are exempt from the 1% BHTN.
What counts as taxable income in Vietnam
Vietnam taxes salary, allowances (except a few specific exempt ones like certain meal or phone allowances within limits), bonuses (including Tet bonuses — fully taxable), overtime premiums (the premium portion above normal rates is exempt; the base pay isn't), and benefits in kind. The VND 15.5M personal deduction and dependent deductions come off this total. Stock options and ESOP gains have their own timing rules — they're taxed when exercised/sold, not when granted.
Tax year and filing in Vietnam
Vietnam uses the calendar year, and the 2026 five-band reform applies from 1 January 2026. PIT is withheld monthly, but unlike some countries, Vietnam does require an annual finalization: your employer usually finalizes on your behalf if you worked there the full year and have no other income — otherwise you self-finalize by 30 April (online via the GDT system). Over-withheld PIT is refunded; under-withheld must be topped up.
Sources & verification
Figures compiled from: General Department of Taxation Vietnam.
Last verified: 23 October 2026. This guide is an estimate, not tax advice.