Can I ask if the Tet bonus is subject to personal income tax (PIT) and social insurance (SI)? - Reader Khanh Nam
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1. Is Tet bonus subject to personal income tax?
Pursuant to Clause 2, Article 3 of the Law on Personal Income Tax 2007 (amended 2012), taxable income includes income from salaries and wages, including:
- Salaries, wages and amounts of the nature of salaries and wages ;
- Allowances and subsidies, except for: allowances and subsidies according to the provisions of law on preferential treatment for people with meritorious services; national defense and security allowances; allowances for toxic and dangerous industries, occupations or jobs in workplaces with toxic and dangerous factors; attraction allowances, regional allowances according to the provisions of law; allowances for sudden difficulties, allowances for work-related accidents and occupational diseases, one-time allowances for childbirth or adoption, allowances due to reduced working capacity, one-time retirement allowances, monthly death benefits and other allowances according to the provisions of the law on social insurance; severance allowances, unemployment allowances according to the provisions of the Labor Code; allowances of a social protection nature and other allowances and subsidies not in the nature of salaries and wages according to the provisions of the Government.
More specifically, at Point e, Clause 2, Article 2 of Circular 111/2023/TT-BTC, income subject to personal income tax includes bonuses in cash or non-cash in any form, including bonuses in securities, except for the following bonuses:
- Bonuses accompanying titles conferred by the State, including bonuses accompanying emulation titles, forms of commendation according to the provisions of law on emulation and commendation, 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 accompanying 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 and Badges.
- Bonus with Certificate of Merit.
The authority to decide on rewards, the amount of rewards accompanying the above emulation titles, and the 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.
Thus , the Tet bonus is an amount subject to personal income tax.
2. Is the Tet bonus subject to social insurance?
According to Clauses 2 and 3, Article 30 of Circular 59/2015/BLDTBXH, the monthly salary for social insurance payment is the salary, salary allowance and other supplements.
The monthly salary for compulsory social insurance does not include other benefits and welfare such as bonuses as prescribed in Article 104 of the Labor Code, initiative bonuses; mid-shift meal allowances; allowances for gasoline, telephone, travel, housing, childcare, and child care; support when a relative dies, a relative gets married, a birthday, allowances for employees facing difficult circumstances due to work-related accidents or occupational diseases, and other allowances and subsidies recorded as separate items in the labor contract.
Thus , employees' Tet bonuses will not be used as a basis for calculating social insurance contributions.
3. Are businesses required to give Tet bonuses?
Article 104 of the 2019 Labor Code stipulates bonuses as follows:
- Bonus is the amount of money or property or other forms that the employer rewards the employee based on the production and business results and the employee's level of work completion.
- The bonus regulations are decided by the employer and publicly announced at the workplace after consulting with the employee representative organization at the workplace where there is an employee representative organization at the workplace.
Thus , whether to give a Tet bonus or not is decided by the enterprise based on production and business results and the level of work completion of the employee.
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