ARE EMPLOYEES’ SALARY AND WAGES FOR WORK DURING THE LUNAR NEW YEAR SUBJECT TO PERSONAL INCOME TAX?

During the Lunar New Year, are employees’ wages and salaries from work during the Lunar New Year subject to personal income tax? Through today’s article, let’s learn about this issue with Pham Consult!

Incomes exempt from personal income tax based on point i, clause 1, Article 3 of Circular 111/2013/TT-BTC are as follows:

Income is tax-free

1. Pursuant to the provisions of Article 4 of the Personal Income Tax Law, Article 4 of Decree No. 65/2013/ND-CP, tax-exempt income includes:

…

i) Income from the salary and wages for night work and overtime work is higher than the salary and wages for daytime work and working hours according to the provisions of the Labor Code. As follows:

i.1) The higher salaries and wages paid due to having to work at night or overtime are exempt from tax based on the actual salaries and wages paid due to having to work at night or overtime minus (-) the salary Salary and wages are calculated based on normal working days.

Example 2: Mr. A’s normal working day salary according to the provisions of the Labor Code is 40,000 VND/hour.

– In case an individual works overtime on weekdays and is paid 60,000 VND/hour, the tax-free income is:

60,000 VND/hour – 40,000 VND/hour = 20,000 VND/hour

– In case an individual works overtime on a day off or holiday and is paid 80,000 VND/hour, the tax-free income is:

80,000 VND/hour – 40,000 VND/hour = 40,000 VND/hour

i.2) Organizations and individuals paying income must prepare a statement clearly reflecting night work, overtime, and extra wages paid to employees due to night work or overtime. This list is kept at the income paying unit and presented when requested by the tax authority.

Based on the regulations on income from wages, wages for night work and overtime work are paid higher than wages and wages for daytime work and working hours according to the provisions of the Labor Code. is determined as income exempt from personal income tax.

Therefore, for income from employees’ salaries and wages during the Lunar New Year, personal income tax will be determined as follows:

– 100% of salary and wages of a normal working day: Must be included in the employee’s monthly income to deduct personal income tax according to regulations.

– 300% of salary and wages for work during the Lunar New Year: Exempt from personal income tax, so not included in the employee’s monthly income to deduct personal income tax according to regulations.

Employees are entitled to leave from work and receive full pay during holidays as prescribed in Clause 1, Article 112 of the 2019 Labor Code as follows:

Holidays and Tet

1. Employees are entitled to leave from work and receive full pay during the following holidays:

a) New Year’s Day: 01 day (January 1 of the solar calendar);

b) Lunar New Year: 05 days;

c) Victory Day: 01 day (April 30 of the solar calendar);

d) International Labor Day: 01 day (May 1 of the solar calendar);

d) National Day: 02 days (September 2 of the solar calendar and 01 day immediately before or after);

e) Hung King’s Death Anniversary: 01 day (March 10th of the lunar calendar).

2. Foreign workers working in Vietnam, in addition to the holidays prescribed in Clause 1 of this Article, are also entitled to 01 additional day off for the national traditional New Year and 01 day off for their country’s National Day.

3. Every year, based on actual conditions, the Prime Minister decides on specific days off specified in Points b and dd, Clause 1 of this Article.

According to the above regulations, employees are entitled to 5 days off for Lunar New Year and still receive full salary.

Every year, based on actual conditions, the Prime Minister will decide specifically on the Lunar New Year holiday.

Note: Depending on each company’s specific regulations, employees may be off work longer than the time prescribed by law, but must ensure the Lunar New Year holiday is at least 5 days.

The weekly day off of employees is based on Clause 3, Article 111 of the 2019 Labor Code as follows:

Take a break every week

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3. If the weekly day off coincides with a public holiday specified in Clause 1, Article 112 of this Code, the employee is entitled to compensate for the weekly day off on the next working day.

Based on the regulation that the weekly day off coincides with a public holiday, the employee is entitled to make up the weekly day off on the next working day.

Thus, in the case of company employees who work on the Lunar New Year, they will only be paid overtime and will not be compensated for other days off. However, in reality, company employees can agree with the employer on the issue of compensatory leave as above. Hope the above article will help your work.

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