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Salaries and wages subject to personal income tax 2023
Income from wages and salaries is the income that employees receive from the enterprise, including:
(1) Salaries, wages and amounts of the nature of salaries or wages in cash or non-cash forms.
(2) Allowances and subsidies, except for the following allowances and subsidies:
- Monthly allowances, preferential allowances and one-time allowances according to the provisions of law on preferential treatment for people with meritorious services.
- Monthly allowance, one-time allowance for those participating in the resistance war, defending the fatherland, performing international duties, and youth volunteers who have completed their duties.
- Defense and security allowances; subsidies for armed forces.
- Hazardous and toxic allowances for industries, occupations or jobs in workplaces with hazardous and toxic elements.
- Attraction allowance, regional allowance.
- Allowance for sudden hardship, allowance for work-related accidents, occupational diseases, one-time allowance for childbirth or adoption, maternity benefits, convalescence and health recovery benefits after childbirth, allowance for reduced working capacity, one-time retirement allowance, monthly death benefits, severance allowance, unemployment allowance, and other allowances as prescribed.
- Subsidies for social protection beneficiaries according to the provisions of law.
- Service allowance for senior leaders.
- One-time allowance for individuals when transferring to work in areas with particularly difficult socio-economic conditions, one-time support for civil servants working on sea and island sovereignty according to the provisions of law. One-time transfer allowance for foreigners coming to reside in Vietnam, Vietnamese people going to work abroad, Vietnamese people residing long-term abroad returning to work in Vietnam.
- Allowance for village and commune health workers.
- Industry-specific allowances.
Note: Allowances, subsidies and the levels of allowances and subsidies not included in taxable income must be prescribed by competent State agencies.
In case the guiding documents on allowances, subsidies, allowance levels and subsidies apply to the State sector, other economic sectors and other business establishments shall base on the list and levels of allowances and subsidies guided for the State sector to calculate and deduct.
In case the allowance or subsidy received is higher than the allowance or subsidy level according to the above instructions, the excess must be included in taxable income.
In particular, one-time relocation allowance for foreigners residing in Vietnam and Vietnamese people working abroad is deducted according to the level stated in the Labor Contract or collective labor agreement.
(3) Remuneration received in the following forms: commission for sales agents, brokerage commission; money for participation in scientific and technical research topics; money for participation in projects and plans; royalties according to the provisions of law on royalties; money for participation in teaching activities; money for participation in cultural, artistic, physical education and sports performances; advertising service fees; other service fees, other remuneration.
(4) Money received from participation in business associations, corporate boards of directors, corporate supervisory boards, project management boards, management boards, associations, professional associations and other organizations.
(5) Benefits in cash or non-cash other than salary and wages paid by the enterprise that the taxpayer enjoys in any form:
- Housing, electricity, water and accompanying services (if any), excluding: benefits for housing, electricity, water and accompanying services (if any) for housing built by enterprises to provide free of charge to employees working in industrial parks; housing built by enterprises in economic zones, areas with difficult socio-economic conditions, areas with especially difficult socio-economic conditions provided free of charge to employees.
In case an individual lives at the workplace, taxable income is based on rent or depreciation costs, electricity, water and other services calculated according to the ratio between the area used by the individual and the area of the workplace.
The amount of rent, electricity, water and other related services (if any) for housing paid by the employer on behalf of the employee is included in taxable income according to the actual amount paid on behalf of the employee but does not exceed 15% of the total taxable income generated (excluding rent) at the unit regardless of where the income is paid.
- Amount of money that the enterprise purchases for life insurance, other non-compulsory insurance with accumulated premiums; purchases for voluntary pension insurance or contributes to the Voluntary Pension Fund for employees.
In case the enterprise purchases for employees non-compulsory insurance products without accrual of insurance premiums (including cases of purchasing insurance from insurance companies not established and operating under Vietnamese law and permitted to sell insurance in Vietnam), the premium for purchasing this insurance product shall not be included in the employee's personal income taxable income. Non-compulsory insurance without accrual of insurance premiums includes insurance products such as: health insurance, death insurance (excluding death insurance products with refunds), ... for which the insured does not receive accrual of premiums from participating in the insurance, in addition to the insurance amount or compensation as agreed in the insurance contract paid by the insurance company.
- Membership fees and other service expenses for individuals upon request such as: health care, entertainment, sports, recreation, and aesthetics, specifically as follows:
+ Membership fees (such as golf course membership cards, tennis court membership cards, cultural and artistic club membership cards, sports clubs, etc.) if the card specifically states the name of the individual or group of individuals using it. In case the card is used jointly and does not state the name of the individual or group of individuals using it, it is not included in taxable income.
+ Other service expenses for individuals in health care, entertainment, beauty care... if the payment content clearly states the name of the individual receiving the benefit. In case the service fee payment content does not state the name of the individual receiving the benefit but is paid to the collective of employees, it is not included in taxable income.
- The lump sum expenses for office supplies, business trips, telephone, uniforms, etc. are higher than the current State regulations. The lump sum expenses are not included in taxable income in the following cases:
+ For cadres, civil servants and people working in administrative agencies, Party, unions, associations: the fixed expenditure level is applied according to the guidance document of the Ministry of Finance.
+ For employees working in business organizations and representative offices: the applicable lump sum level is consistent with the level of determining taxable income subject to corporate income tax according to documents guiding the implementation of the Law on Corporate Income Tax.
+ For employees working in international organizations and representative offices of foreign organizations: the lump sum payment level is implemented according to the regulations of the international organization and representative office of foreign organization.
- Expenses for transportation services to pick up and drop off employees from their residence to their workplace and vice versa are not included in the employee's taxable income according to the unit's regulations.
- Payments for training to improve the qualifications and skills of employees in accordance with the employee's professional work or according to the employer's plan are not included in the employee's income.
- Other benefits.
Other benefits that businesses pay employees include: spending on holidays; hiring consulting services, hiring tax declaration for a specific individual or group of individuals; spending on domestic workers such as drivers, cooks, people who do other household chores under contract...
(6) Cash or non-cash bonuses of any kind, including stock bonuses, except for the following bonuses:
- Bonuses accompanying titles conferred by the State, including bonuses accompanying emulation titles, forms of rewards according to the provisions of law on emulation and rewards, specifically:
+ Bonuses accompanying emulation titles such as National Emulation Fighter; Emulation Fighter at the level of Ministries, branches, central organizations, provinces, and centrally-run cities; Emulation Fighter at the grassroots level, Advanced Worker, Advanced Fighter.
+ Bonuses with other forms of rewards.
+ Bonuses with titles awarded by the State.
+ Bonuses accompanying awards given by Associations and organizations under Central and local political organizations, socio-political organizations, social organizations, and socio-professional organizations in accordance with the charter of that organization and in accordance with the provisions of the Law on Emulation and Commendation.
+ Bonuses with Ho Chi Minh Prize and State Prize.
+ Bonus with Medals, Badges.
+ Bonus with Certificate of Merit.
The authority to decide on rewards, the amount of rewards accompanying the above emulation titles and forms of rewards must comply with the provisions of the Law on Emulation and Rewards.
- Bonuses accompanying national and international awards recognized by the Vietnamese State.
- Bonuses for technical improvements, inventions and discoveries recognized by competent State agencies.
- Rewards for detecting and reporting violations of the law to competent State agencies.
(7) The following items are not included in taxable income:
- Enterprise support for medical examination and treatment of serious illnesses for employees and their relatives.
+ Relatives of the employee in this case include: biological children, legally adopted children, illegitimate children, stepchildren of the wife or husband; wife or husband; biological father, biological mother; father-in-law, mother-in-law (or father-in-law, mother-in-law); stepfather, stepmother; legal adoptive father, adoptive mother.
+ The support level not included in taxable income is the actual amount paid according to the hospital fee payment voucher, but not exceeding the hospital fee payment amount of the employee and the employee's relatives after deducting the payment amount of the insurance organization.
+ The enterprise paying the support money is responsible for: keeping a copy of the hospital fee payment document with confirmation from the enterprise (in case the employee and the employee's relatives pay the remaining amount after the insurance organization pays directly to the medical facility) or a copy of the hospital fee payment document; a copy of the health insurance payment document with confirmation from the enterprise (in case the employee and the employee's relatives pay the entire hospital fee, the insurance organization pays the insurance money to the employee and the employee's relatives) together with the support money payment document for the employee and the employee's relatives suffering from a serious illness.
- Amount received according to regulations on the use of means of transport in State agencies, public service units, Party organizations and unions.
- Amount received under the public housing regime as prescribed by law.
- Amounts received other than salary and wages for participating in giving opinions, appraising and examining legal documents, Resolutions, political reports; participating in inspection and supervision delegations; receiving voters and citizens; uniforms and other work related to directly serving the activities of the National Assembly Office, the Nationalities Council and Committees of the National Assembly, National Assembly Delegations; the Central Office and Party Committees; the Office of the City Party Committee, the Provincial Party Committee and Committees of the City Party Committee, the Provincial Party Committee.
- Mid-shift meals and lunch money are paid by the business that organizes mid-shift meals and lunch for employees in the form of directly cooking, buying meals, and providing meal vouchers.
In case the enterprise does not organize mid-shift meals or lunch but pays for employees, it will not be included in the taxable income of the individual if the level of expenditure is in accordance with the guidance of the Ministry of Labor, War Invalids and Social Affairs. In case the level of expenditure is higher than the guidance of the Ministry of Labor, War Invalids and Social Affairs, the excess amount must be included in the taxable income of the individual.
The specific expenditure levels applicable to State-owned enterprises and organizations, units under administrative agencies, the Party, unions, and associations shall not exceed the guidelines of the Ministry of Labor, War Invalids and Social Affairs. For non-State enterprises and other organizations, the expenditure levels shall be decided by the unit head in agreement with the union chairman, but shall not exceed the levels applicable to State-owned enterprises.
- The amount of money for round-trip airfare paid by the enterprise on behalf of (or for) foreign employees working in Vietnam, and Vietnamese employees working abroad who go home on annual leave once a year.
The basis for determining the amount of money to buy an air ticket is the labor contract and the amount of money to pay for an air ticket from Vietnam to the country of nationality of the foreigner or the country where the foreigner's family lives and vice versa; the amount of money to pay for an air ticket from the country where the Vietnamese person is working to Vietnam and vice versa.
- Tuition fees for children of foreign employees working in Vietnam to study in Vietnam, and children of Vietnamese employees working abroad to study abroad from preschool to high school are paid by the enterprise.
- Personal income received from sponsoring associations and organizations is not included in personal income tax if the individual receiving the sponsorship is a member of the association or organization; the sponsorship funds are used from the State budget or are managed according to State regulations; the creation of literary and artistic works, scientific research projects... to carry out the State's political tasks or according to the program of activities in accordance with the Charter of that association or organization.
- Payments that enterprises pay to serve the mobilization and rotation of foreign employees working in Vietnam according to the provisions of the labor contract, complying with the standard labor schedule according to international practices of some industries such as oil and gas, mining.
The basis for determination is the labor contract and the payment for airfare from Vietnam to the country where the foreigner resides and vice versa.
- The amount of money received by the organization or individual paying income for funerals and weddings for the employee and his/her family is in accordance with the general regulations of the organization or individual paying income and is consistent with the level of income subject to corporate income tax according to the documents guiding the implementation of the Law on Corporate Income Tax.
Pursuant to: Clause 2, Article 2 of Circular 111/2013/TT-BTC; Clause 1, Clause 2, Clause 3, Clause 4 and Clause 5, Article 11 of Circular 92/2015/TT-BTC.
How to calculate personal income tax from salary and wages
The basis for calculating tax on income from salaries and wages is taxable income and tax rate, specifically as follows:
(i) Determining taxable income from salaries and wages
Taxable income is determined by taxable income according to the instructions in Article 8 of Circular 111/2013/TT-BTC minus (-) the following deductions:
- Family deductions according to instructions in Clause 1, Article 9 of Circular 111/2013/TT-BTC.
- Insurance contributions and voluntary pension funds according to the instructions in Clause 2, Article 9 of Circular 111/2013/TT-BTC.
- Charitable, humanitarian and educational contributions according to the instructions in Clause 3, Article 9 of Circular 111/2013/TT-BTC.
(ii) Personal income tax rate
Personal income tax rates on income from business, salaries and wages are applied according to the following progressive tax schedule:
(iii) How to calculate personal income tax from salaries and wages
Personal income tax on income from business, salary and wages is the total tax calculated for each income level. The tax calculated for each income level is the taxable income of the income level multiplied (×) by the corresponding tax rate of that income level.
For convenience in calculation, the simplified calculation method can be applied according to Appendix No. 01/PL-TNCN issued with Circular 111/2013/TT-BTC.
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