How to calculate personal income tax on irregular income in Vietnam in 2025?

How to calculate personal income tax on irregular income in Vietnam in 2025?

Pursuant to the provisions at point i, clause 1, Article 25 of Circular 111/2013/TT-BTC regarding tax deduction in certain cases as follows:

Tax deduction and certificate of tax deduction

1. Tax Deduction

...

i) Tax deduction in certain other cases

Organizations and individuals paying wages, remuneration, and other payments to resident individuals not signing labor contracts (as guided at points c, d, clause 2, Article 2 of this Circular) or signing labor contracts under three (03) months with a total income payment of two million (2,000,000) VND/time or more must deduct tax at a rate of 10% on the income before paying the individual.

...

Thus, wages, remuneration, and other payments by organizations and individuals employing resident individuals not signing labor contracts can be considered as the irregular income of the laborer.

If the irregular income of the laborer has a total payment of 2 million VND/time or more, personal income tax will be deducted at a rate of 10% on the income before the employer pays the individual.

Conversely, if the irregular income of the laborer is below 2 million VND/time, it will not be subject to personal income tax calculation and deduction.

How to calculate personal income tax on irregular income in Vietnam in 2025? (Image from Internet)

How to avoid 10% personal income tax withholding on irregular income in Vietnam?

Pursuant to the provisions at point i, clause 1, Article 25 of Circular 111/2013/TT-BTC regarding tax deduction in certain cases as follows:

Tax Deduction and certificate of tax deduction

1. Tax Deduction

Tax deduction is the process where organizations and individuals paying income deduct the payable tax amount from the taxpayer's income before making the payment. To be specific:

...

i) Tax deduction in certain other cases

Organizations and individuals paying wages, remuneration, and other payments to resident individuals not signing labor contracts (as guided at points c, d, clause 2, Article 2 of this Circular) or signing labor contracts under three (03) months with a total income payment of two million (2,000,000) VND/time or more must deduct tax at a rate of 10% on the income before paying the individual.

In case individuals only have a single source of income subject to tax deduction at the above-stated rate but estimate the total taxable income of the individual after family deductions does not reach the taxable level, the individuals with such income may make a commitment (following the form issued along with guidelines on tax management) to the income-paying organization so the organization does not temporarily deduct personal income tax.

Based on the individual's commitment, the income-paying organization will not deduct tax. At the end of the tax year, the income-paying organization must still aggregate the list and income of individuals not reaching the tax deduction level (into the form issued along with guidelines on tax management) and submit it to the tax authority. Individuals making commitments must be responsible for their commitments, and any fraud detected will be handled according to the provisions of the Tax Administration Law.

Individuals making commitments as guided in this point must have taxpayer registration and a tax code at the time of making the commitment.

Thus, irregular income will not be subject to 10% personal income tax deduction if the following conditions are met:

- Only one source of irregular income subject to personal income tax deduction;

- Irregular income of 2,000,000 VND/time or more but estimated total taxable personal income after family deductions not reaching the taxable level;

- Individual is not a resident not signing a labor contract or signing a labor contract under 03 months;

- Have a commitment sent to the income-paying organization so the organization does not deduct 10% personal income tax;

- Registered tax code at the time of making the commitment.

What is the personal exemption in Vietnam in 2025?

Based on Article 19 of the Personal Income Tax Law 2007, amended by clause 4 Article 1 of the Amended Personal Income Tax Law 2012, and Article 1 of Resolution 954/2020/UBTVQH14 (provisions relating to tax determination for business individuals in clause 1 of this Article are abolished by clause 4 Article 6 of the Law Amending Various Tax Laws 2014), personal exemption is the amount deducted from the taxable income before calculating tax on income from business, salaries, and wages of taxpayers who are resident individuals.

The personal exemption in 2025 is determined according to Article 1 of Resolution 954/2020/UBTVQH14 as follows:

personal exemption

Adjustment of the personal exemption as specified in clause 1 Article 19 of Personal Income Tax Law No. 04/2007/QH12 as amended and supplemented by some articles under Law No. 26/2012/QH13 as follows:

1. Deduction for taxpayers is 11 million VND/month (132 million VND/year);

2. Deduction for each dependent is 4.4 million VND/month.

The personal exemption in 2025 for taxpayers is 11 million VND/month (132 million VND/year) and 4.4 million VND/month for each dependent.