On the first working day after the Lunar New Year holiday, many agencies, organizations and companies have the custom of giving lucky money to their staff.

Many people wonder, is the lucky money exempt from personal income tax (PIT)?

Regarding this issue, Mr. Nguyen Ho Ngoc, Administrator of the Tax Forum, said: According to Circular No. 111/2013/TT-BTC, lucky money from the company to employees is considered a bonus and is subject to personal income tax because it is not on the list of tax-exempt bonuses.

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Many people wonder: "Is the lucky money exempt from personal income tax?" Photo: Binh Minh

According to current regulations, tax-exempt rewards include: Emulation title rewards (Emulation Fighter, Advanced Worker,...); Rewards accompanying the Ho Chi Minh Prize, State Prize; National and international prizes recognized by the State; Rewards for inventions and technical improvements recognized by State agencies; Rewards for individuals who discover and denounce violations of the law...

How to calculate personal income tax on lucky money from the company

For employees with contracts of 3 months or more:

Personal income tax is calculated according to the progressive tax schedule. The company will add the lucky money to the total monthly income to calculate tax.

For employees without a contract or a contract of less than 3 months:

If income is 2 million VND/time or more, the company deducts 10% before payment.

If the income is low and not taxable, the employee can make a personal income tax commitment according to Form 08/CK-TNCN (replacing Form 02/CK-TNCN according to Circular 80/2021/TT-BTC) to temporarily not have 10% personal income tax deducted.

Conditions for individuals to make a commitment according to Form 08/CK-TNCN include: Being a resident individual with only one source of income subject to 10% deduction; Total income after family deduction is not enough to pay tax (132 million/year if there are no dependents); Having a tax code at the time of making the commitment.

Responsibility for declaring and paying taxes

Mr. Ngoc noted that lucky money from the company is considered taxable income and must be declared and deducted according to regulations.

According to the Law on Personal Income Tax, the company is responsible for declaring, deducting and paying personal income tax for employees to the state budget; Finalizing tax at the end of the year according to regulations.

If employees make a commitment according to Form 08/CK-TNCN, the company must still compile a list and report to the tax authority.