VI What constitutes taxable employment income for Personal Income Tax (PIT) purposes in 2026? When is taxable income from salaries and wages determined? Let’s explore these issues with Pham Consult!
What is the taxable income from salaries and wages in 2026? When is the taxable income from salaries and wages determined?
Taxable income for personal income tax purposes from salaries and wages in 2026 is stipulated in Article 46 of Decree 253/2026/ND-CP, specifically as follows:
Taxable income from salaries and wages is the total taxable income as stipulated in Article 8 of Decree 253/2026/ND-CP that the taxpayer receives during the tax period minus (-) the following amounts:
– Contributions to social insurance, health insurance, unemployment insurance, professional liability insurance for certain industries and professions that are required to participate in mandatory insurance, voluntary social insurance contributions according to the Social Insurance Law, voluntary health insurance contributions according to the Health Insurance Law, supplementary retirement insurance contributions according to the Social Insurance Law, voluntary retirement insurance, and life insurance.
The amount of contributions to supplementary retirement insurance under the Social Insurance Law, voluntary retirement insurance, and life insurance that are deductible from income when determining taxable income as stipulated in this point shall not exceed a total of 3 million VND/month for these forms of insurance participation, including both the amount contributed by the employer for the employee and the amount contributed by the employee themselves (if any).
In cases where individuals residing in Vietnam have income from salaries and wages abroad and have participated in mandatory insurance contributions as prescribed by the country where they are employed, such as social insurance, health insurance, unemployment insurance, and professional liability insurance for certain industries and professions, these insurance premiums may be deducted from taxable income when determining taxable income from salaries and wages.
Social insurance contributions, health insurance contributions, unemployment insurance contributions, professional liability insurance contributions for certain industries and professions that are required to participate in mandatory insurance, supplementary retirement insurance contributions under the Social Insurance Law, and voluntary retirement insurance purchases for a given year are deductible from taxable income in that year.
The basis for determining deductible income is a copy of the payment receipt (or fee payment receipt) issued by the insurance organization, supplementary retirement fund, or insurance company, and confirmation from the income-paying organization regarding the amount of insurance deducted and paid (in cases where the income-paying organization pays on behalf of the income-paying organization);
– Personal allowances as stipulated in Article 10 of the Personal Income Tax Law 2025 and Article 47 of Decree 253/2026/ND-CP;
– Charitable and humanitarian contributions and other deductions as stipulated in Article 11 of the Personal Income Tax Law 2025 and Article 49 of Decree 253/2026/ND-CP.
In addition, the time of determining taxable income from salaries and wages is the time when the employer pays the salary or wages to the taxpayer or the time when the taxpayer receives the income, including monetary or non-monetary benefits, allowances, subsidies, and other income as stipulated in Article 8 of Decree 253/2026/ND-CP during the tax period.
How is personal income tax calculated on income from salaries and wages from July 1, 2026?
The method for calculating personal income tax on income from salaries and wages is stipulated in Article 8 and Article 21 of the Personal Income Tax Law 2025, specifically as follows:
*For resident individuals:
– Personal income tax on income from salaries and wages of resident individuals is determined by the taxable income specified in Clause 2, Article 8 of the Personal Income Tax Law 2025, regardless of where the income is paid, multiplied by the tax rate in the progressive tax schedule specified in Article 9 of the Personal Income Tax Law 2025.
– Taxable income from salaries and wages is the total taxable income specified in Clause 2, Article 3 of the Personal Income Tax Law 2025 that the taxpayer receives during the tax period, minus contributions to social insurance, health insurance, unemployment insurance, and professional liability insurance for certain industries and professions. – Compulsory insurance premiums, supplementary retirement insurance contributions as stipulated in the Social Insurance Law 2024, voluntary retirement insurance, life insurance not exceeding the amount prescribed by the Government, and deductions as stipulated in Articles 10 and 11 of the Personal Income Tax Law 2025.
– The time of determining taxable income from salaries and wages is the time when the organization or individual pays income to the taxpayer or the time when the taxpayer receives the income.
*For non-resident individuals:
Personal income tax on income from salaries and wages of non-resident individuals is determined by the total amount of salaries and wages received by the non-resident individual for performing work in Vietnam multiplied by (x) the tax rate of 20%, regardless of where the income is paid.
Note: 05 principles that must be complied with in tax management activities are stipulated in Article 5 of the 2019 Tax Management Law, amended by Clause 1, Article 6 of the Law amending the Law on Securities, the Law on Accounting, the Law on Independent Auditing, the Law on State Budget, the Law on Management and Use of Public Assets, the Law on Tax Management, the Law on Personal Income Tax, the Law on National Reserves, and the Law on Handling Administrative Violations 2024, specifically as follows:
(1) Every organization, household, business household, and individual has the obligation to pay taxes according to the provisions of the law.
(2) Tax authorities and other State agencies assigned the task of managing tax collection shall manage taxes in accordance with the provisions of this Law and other relevant laws, ensuring transparency, equality, and protecting the legitimate rights and interests of taxpayers.
Tax officials are responsible for handling tax files within the scope of files, documents, and information provided by taxpayers, the tax authority’s database, information provided by competent State agencies related to taxpayers, and the results of applying risk management in tax management, ensuring compliance with their responsibilities and duties, and adherence to the provisions of the law on tax management and other relevant tax laws.
(3) Agencies, organizations, and individuals are responsible for participating in tax management as prescribed by law.
(4) Implement administrative procedure reform and apply modern information technology in tax management; Applying international best practices in tax management principles, including the principle that the nature of the activity and transaction determines the tax obligation, the principle of risk management in tax management, and other principles suitable to Vietnam’s conditions.
(5) Applying priority measures when carrying out tax procedures for exported and imported goods as prescribed by customs law and government regulations.
What are the obligations of taxpayers?
The obligations of taxpayers are stipulated in Clause 2, Article 37 of the 2025 Tax Management Law, including:
– Registering for tax and using tax codes as prescribed;
– Declaring accurately, truthfully, and completely and submitting tax documents on time; being responsible before the law for the accuracy, truthfulness, and completeness of tax documents and documents provided to the tax management agency during the process of handling tax documents;
– Paying all taxes, other revenues, late payment penalties, and fines in full and on time. – In cases where the tax authority has provided a tax identification code for the amount payable, the taxpayer shall pay according to the tax identification code;
– Comply with accounting and statistical regulations, and use invoices and documents as prescribed;
– Accurately, truthfully, and completely record activities that give rise to tax obligations, tax deductions, and transactions that require tax declaration;
– Prepare and issue invoices and documents to buyers in accordance with the quantity, type, and actual payment value when selling goods or providing services as prescribed by law;
– Provide accurate, complete, and timely information and documents related to the determination of tax obligations in paper or electronic form; provide information to the tax authority to facilitate information exchange with foreign tax authorities in accordance with international treaties and agreements on taxation to which the Socialist Republic of Vietnam is a member or signatory; – Explain the calculation of taxes and other charges, declare taxes and other charges, and pay taxes and other charges as required by the tax authorities;
– Comply with decisions, notices, and requests from the tax authorities and tax officials as prescribed by law;
– Be responsible for fulfilling tax and other charge obligations as prescribed by law, including in cases where the legal representative or authorized representative acts on behalf of the taxpayer in violation of tax and other charge procedures;
– Operate the technical infrastructure to conduct electronic transactions and connect tax obligation information with the tax authorities;
– Use tax-exempt goods and services and other charges not subject to tax for the declared purposes; if the purpose changes, a new declaration must be made and taxes, other charges, and any resulting expenses must be paid as prescribed by law;
– Taxpayers with related-party transactions must prepare, store, declare, and provide records of related-party transactions and related parties of the taxpayer, including related parties abroad;
– Taxpayers that are social enterprises are responsible for accurately, truthfully, and fully declaring all income from cooperation, sponsorship, and economic contracts with foreign organizations and individuals used for social and environmental purposes in accordance with tax laws and relevant laws;
– Taxpayers must pay the amount of tax and other charges assessed according to the tax and other charges handling decision of the competent authority.
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