Vietnam personal income tax (PIT) in 2026

Resident or non-resident: which PIT regime applies?

Which personal income tax regime applies to you turns on tax residency, not nationality. A resident is taxed on worldwide employment income at the progressive five-band scale below; a non-resident is taxed only on Vietnam-source employment income, at a flat 20%, and gets none of the family deductions a resident receives.1

Broadly, you are a resident if you spend at least 183 days in Vietnam — in a calendar year or across any 12 consecutive months from arrival — or keep a qualifying home here; the full test, the split-year timing and a resident-versus-non-resident worked example are set out in the guide to tax residency and the 183-day rule in Vietnam.13 Settle each person’s status for each tax year before any figure is calculated; as of October 2026 the governing statute is the Personal Income Tax Law 109/2025/QH15.1

What are Vietnam’s personal income tax rates in 2026?

For the 2026 tax year, resident PIT has five progressive tax bands (brackets) — 5%, 10%, 20%, 30% and 35% — applied to monthly assessable income at thresholds of ₫10,000,000, ₫30,000,000, ₫60,000,000 and ₫100,000,000. Law 109/2025/QH15 cut the schedule from seven bands to five, with the 35% top rate reserved for monthly assessable income above ₫100,000,000.1

“Assessable income” is what is left after compulsory insurance and the family deductions below have been taken off gross pay — not the gross salary itself. The table lists each band with its quick-deduction formula, the shortcut that lets you compute the tax in one line instead of stacking each band. The quick-deduction constants are continuous at every breakpoint, so both methods give the same result.

What comes off pay before PIT?

Taxable employment income is more than base salary: it includes wages, most cash allowances, bonuses and the customary 13th-month (Tet) pay, plus any taxable benefits in kind — before the exemptions below and the compulsory-insurance and family deductions are taken off. Equity awards are taxed too, though on their own timetable: from 1 July 2026 an employee share plan is taxed only when the shares are sold, as set out in employee stock options in Vietnam.

Before resident PIT is calculated, three things come off gross pay in order: compulsory social, health and unemployment insurance; a personal deduction of ₫15,500,000 a month; and ₫6,200,000 a month for each qualifying dependant. Insurance is deducted first, then the family deductions, and PIT is charged on what remains.2

The ordering is not cosmetic. An employee’s compulsory insurance — 8% social, 1.5% health and, for Vietnamese staff, 1% unemployment — is taken from gross pay before the personal and dependant deductions are applied, which is why the insurance contributions never themselves attract PIT.8 The contribution bases are capped, and the floor is tied to the regional minimum wage; both sit in the employer payroll and social-insurance on-costs, and the floor itself is set by the 2026 regional minimum wage.

The personal deduction of ₫15,500,000 and the ₫6,200,000-per-dependant figure were raised for the 2026 tax year by Resolution 110/2025/UBTVQH15.2 Each dependant must be registered with the tax authority, may be claimed by only one taxpayer, and must have income averaging no more than ₫3,000,000 a month to qualify — a ceiling raised from ₫1,000,000 by Decree 253/2026/ND-CP and Circular 87/2026/TT-BTC from 1 July 2026 (as of October 2026).9 These deductions apply to residents only; a non-resident gets none of them.

How much tax do non-residents and foreigners pay?

Non-tax-residents pay a flat 20% PIT on their Vietnam-source employment income, with no personal or dependant deductions.1 Nationality does not set the rate: a foreign national who becomes a tax resident is taxed exactly like a Vietnamese resident, on the progressive five-band scale, while a short-stay foreigner who stays below the residency threshold pays the flat 20%. A resident foreigner taxed on worldwide income may be able to use a double-taxation agreement between Vietnam and their home country to avoid being taxed twice; Vietnam has a wide treaty network, with the United States a notable exception, so confirm the position for each individual.

This catches many first-time employers out. A foreign employee who arrives mid-year is often a non-resident for that first partial year and a resident afterwards, so the same person can move from the flat 20% to the progressive bands as the 183-day count is met. Foreign employees on a Vietnamese labour contract of 12 months or more also join compulsory social and health insurance (though not unemployment insurance),8 which is deductible before resident PIT in the same way — see work permits and social insurance for foreign employees. Because residency can flip during an assignment, confirm each person’s status for each tax year before running their payroll.

Tax-free allowances, in brief

Some allowances are exempt from PIT within caps. The firmest figure is the mid-shift meal allowance: tax-free in cash up to ₫1,200,000 per person a month, with meals provided in kind fully exempt, under Decree 253/2026/ND-CP and its companion Circular 87/2026/TT-BTC (as of October 2026).4 Uniform, telephone, overtime and night-shift premiums, business-travel per diems, employer-paid housing and certain expatriate benefits can also be exempt, but several of their sub-caps were not all restated in the 2026 text and should be line-checked against the current decree before you rely on a figure.

The full list, with each cap flagged where it needs confirming, is in the guide to tax-free allowances in Vietnam.

Worked example: resident vs non-resident PIT

On the same ₫40,000,000 monthly gross, a single Vietnamese resident with no dependants pays ₫1,530,000 in PIT, while a non-resident pays ₫8,000,000 — a flat 20% of the gross, assuming the whole salary is Vietnam-source taxable employment income. The gap is created by the resident’s compulsory insurance and ₫15,500,000 personal deduction, neither of which a non-resident receives. The figures below are illustrative.

Who files PIT in Vietnam, and when?

From 1 July 2026, employers withhold PIT from each payroll monthly but declare it quarterly to the tax authority, with an annual finalisation. The quarterly declarations are due on 30 April, 31 July, 31 October and 31 January. A single quarterly rule now applies to all income-paying organisations under Decree 252/2026/ND-CP and Circular 89/2026/TT-BTC.5

This is a genuine change for 2026. The earlier rule let only payers eligible for quarterly value-added tax file PIT quarterly; that value-added-tax link has been abolished for employment-income withholding, so every employer is now on the same quarterly cycle, implementing the new Law on Tax Administration 108/2025/QH15.5 Withholding itself stays monthly inside payroll; only the declaration frequency changed.

Annual finalisation then reconciles the year. An employer finalising on behalf of its staff files by 31 March; an individual who finalises their own tax files by 30 April, rolled to the next working day if that date is a holiday.6 The finalisation deadlines were not changed by the move to quarterly withholding.

Paying contractors, and the EOR alternative

When you pay an individual who has no labour contract, or one under three months, you must withhold 10% personal income tax on each payment of ₫5,000,000 or more before paying — a threshold raised from ₫2,000,000 with effect from 1 July 2026 by Decree 253/2026/ND-CP and Circular 87/2026/TT-BTC.7 The full mechanic — how to pay a contractor compliantly, and when to convert one to an employee — is set out in the guide to hiring and paying contractors in Vietnam.

The 10% is provisional tax collection, not a ruling on status. Paying someone as a “contractor” does not settle whether they are really an employee — that turns on the substance of the work, set out in the contractor-versus-employee comparison and misclassification risk and in Vietnam’s employment-contract rules and the substance test.

An employer of record removes the question by employing the worker properly through a Vietnam-registered entity: it withholds and remits PIT, files the quarterly declarations, runs the annual finalisation, and pays the compulsory insurance — all under one payroll. EOR Vietnam charges a flat US$149 per employee per month for this service, as of October 2026 — the same fee for every Vietnamese-national employee whatever the salary or role, with no setup, payslip or other EOR fees; the gross salary and the statutory employer contributions are passed through at cost, and a security deposit of two months’ employment cost is held for the engagement and returned at the end. A foreign national who needs a Vietnamese work permit is quoted separately. Every written quote names the employing entity and the legal structure it uses, so you can see exactly whose PIT number is on the payslip. For the service itself, see what an employer of record does in Vietnam.