How to calculate personal income tax on Tet bonus
According to Circular 111/2013/TT-BTC, there will be two cases in calculating personal income tax (PIT).
Case 1, for labor contracts of 3 months or more. The amount of personal income tax payable on salaries and wages will be calculated according to the formula: Personal income tax payable = Taxable income x Tax rate
In there:
Taxable income = Taxable income - Deductions
Taxable income = Gross income - Exemptions
Accordingly, note that employees only have to pay taxes after deducting deductions that are still positive.
When calculating the personal income tax that employees must pay, the Tet bonus and 13th month salary are not separated but are combined to calculate the total income.
In case 2, for labor contracts of less than 3 months or without labor contracts, organizations and individuals paying wages, remuneration, and other payments to individuals residing without labor contracts or signing labor contracts of less than 3 months with a total income payment of 2 million VND/time or more must deduct tax at a rate of 10% on income before paying income to individuals.
Accordingly, when organizations and individuals pay salaries, Tet bonuses and other income to employees from 2 million VND/time or more, they must deduct 10% at source before paying income.
Salary and bonus for Tet 2024 is 100 million, how much personal income tax do I have to pay?
Mr. A's salary in January 2024 is 40 million VND, Tet bonus is 60 million VND and insurance payments are: 8% social insurance, 1.5% health insurance, 1% unemployment insurance.
Considering family circumstances, Mr. A. has 2 children under 18 years old. During the month, Mr. A. did not contribute to charity, humanitarian work, or education promotion.
Accordingly, Mr. A's taxable income is 100 million VND, Mr. A's provisional personal income tax payment for the month with the following deductions:
- Personal deduction: 11 million VND
- Family deduction for 2 dependents (2 children): 4.4 million VND × 2 = 8.8 million VND
- Social insurance, health insurance, unemployment insurance: 40 million salary × (8% + 1.5% + 1%) = 4.2 million VND. (This level only calculates insurance premiums on salary).
From there, the total amount of deductions is: 24 million VND
- Mr. A's taxable income is: 100 - 24 = 76 million VND
The amount of tax payable is calculated according to each level of the Progressive Tax Schedule.
Level 1: Taxable income up to 5 million VND, tax rate 5%: 5 million VND × 5% = 0.25 million VND
Level 2: Taxable income from 5 million VND to 10 million VND, tax rate 10%: (10 - 5 million VND) × 10% = 0.5 million VND
Level 3: Taxable income over 10 - 18 million VND, tax rate 15%: (18 - 10 million VND) × 15% = 1.2 million VND
Level 4: Taxable income from 18 million VND to 32 million VND, tax rate 20%: (32 - 18 million VND) × 20% = 2.8 million VND
Level 5: Taxable income above 32 - 52 million VND, tax rate 25%: (52 million VND - 32 million VND) × 25% = 5 million VND
Level 6: Taxable income from 52 million VND to 80 million VND, tax rate 30%: (76 - 52 million VND) × 30% = 7.2 million VND
Accordingly, the total tax Mr. A must temporarily pay in the month is: 16.95 million VND.
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