Do students who teach extra classes have to pay personal income tax?

In large cities, to save costs and make travel more convenient, many parents choose to hire students to tutor their children at home.

According to regulations, students who tutor outside of school are individuals who do extra-curricular tutoring activities for money. Therefore, students must register their business or sign a contract with tutoring establishments/centers. So in this case, do students have to pay personal income tax?

Students establish business households

If students register to establish a business household, they must pay personal income tax. Article 4, Circular 40/2021 stipulates personal income tax for business households. Specifically, business households and business individuals with revenue from production and business activities in the calendar year of VND 100 million or less are not required to pay personal income tax according to the law on personal income tax.

From January 1, 2026, the threshold for personal income tax payment for individuals and business households will increase to VND 200 million according to the provisions of Article 5, Article 17, Clause 2, Article 18, Law on Value Added Tax 2024.

Students sign tutoring contracts with the center

In case students sign a tutoring contract, personal income tax will be deducted from their monthly salary according to Article 25, Circular 111/2013.

Accordingly, labor contracts with a term of less than 3 months and a monthly salary of 2 million or more for part-time students will have their income paid by the income payer deduct tax at a rate of 10% on the income before payment.

Labor contracts with a term of 3 months or more and monthly income up to the taxable level are also subject to tax payment.

Thus, if a student signs a contract for less than 3 months and has an income payment of 2 million VND/time or more or the total payments in a month are greater than 2 million VND, he/she will not have to pay personal income tax. However, the income payer will deduct tax at a rate of 10% on the income before paying it to this person.

Regulations on extracurricular teaching

Article 6, Circular 29/2024 on extra teaching and learning issued by the Ministry of Education and Training stipulates that organizations or individuals organizing extra teaching outside of school for money must register their business in accordance with the provisions of law and publicly disclose information about the subjects they teach.

At the same time, organizations or individuals providing extra teaching are required to publicly disclose the number of extra teachers for each subject according to each grade level; location, form, and time of organizing extra teaching and learning; list of extra teachers and tuition fees before enrolling students for extra teaching and learning classes.

Extracurricular tutors need to ensure good moral qualities and professional competence appropriate to the subjects they teach.

At the same time, teachers who are teaching at schools and participate in extra-curricular teaching must report to the Principal or Director or head of the school about the subjects, location, form, and time of extra-curricular teaching.

English English

Source: https://vtcnews.vn/sinh-vien-day-them-co-phai-dong-thue-thu-nhap-ca-nhan-ar926377.html