What is the 2025 partially progressive tariff for personal income tax in Vietnam? How to calculate PIT using the abridged method?
What is the 2025 partially progressive tariff for personal income tax in Vietnam?
The partially progressive tariff for personal income tax applies to taxable income derived from wages and salaries, excluding contributions to social insurance, health insurance, unemployment insurance, occupational liability insurance for certain mandatory insurance occupations, voluntary pension funds, and deductions.
Pursuant to Clause 2, Article 23 of the Law on Personal Income Tax 2007, the partially progressive tariff for PIT for 2025 is as follows:
| Tax Bracket | Annual Taxable Income (million VND) |
Monthly Taxable Income (million VND) |
Tax Rate (%) |
| 1 | Up to 60 | Up to 5 | 5 |
| 2 | Over 60 to 120 | Over 5 to 10 | 10 |
| 3 | Over 120 to 216 | Over 10 to 18 | 15 |
| 4 | Over 216 to 384 | Over 18 to 32 | 20 |
| 5 | Over 384 to 624 | Over 32 to 52 | 25 |
| 6 | Over 624 to 960 | Over 52 to 80 | 30 |
| 7 | Over 960 | Over 80 | 35 |
What is the 2025 partially progressive tariff for personal income tax in Vietnam? How to calculate PIT using the abridged method?
How to calculate PIT using the abridged method in Vietnam?
Pursuant to Clause 3, Article 7 of Circular 111/2013/TT-BTC, taxable PIT income from wages and salaries is calculated as follows:
PIT Payable = Taxable Income x Tax Rate
Where:
- Taxable Income (TNTT) = Taxable Income - Deductions.
- The tax rate on wages and salaries is calculated progressively according to Article 22 of the Law on Personal Income Tax 2007. To be specific:
| Tax Bracket | Annual Taxable Income (million VND) | Monthly Taxable Income (million VND) | Tax Rate (%) |
| 1 | Up to 60 | Up to 5 | 5 |
| 2 | Over 60 to 120 | Over 5 to 10 | 10 |
| 3 | Over 120 to 216 | Over 10 to 18 | 15 |
| 4 | Over 216 to 384 | Over 18 to 32 | 20 |
| 5 | Over 384 to 624 | Over 32 to 52 | 25 |
| 6 | Over 624 to 960 | Over 52 to 80 | 30 |
| 7 | Over 960 | Over 80 | 35 |
Additionally, Appendix 01/PL-TNCN issued with Circular 111/2013/TT-BTC provides the abridged method for calculating PIT on salaries and wages as follows:
| Bracket | Taxable Income per Month (VND) | Tax Rate | Method 1 for Calculating Tax Payable | Method 2 for Calculating Tax Payable |
| 1 | Up to 5 million | 5% | 0 million + 5% TNTT | 5% TNTT |
| 2 | Over 5 million to 10 million | 10% | 0.25 million + 10% TNTT over 5 million | 10% TNTT - 0.25 million |
| 3 | Over 10 million to 18 million | 15% | 0.75 million + 15% TNTT over 10 million | 15% TNTT - 0.75 million |
| 4 | Over 18 million to 32 million | 20% | 1.95 million + 20% TNTT over 18 million | 20% TNTT - 1.65 million |
| 5 | Over 32 million to 52 million | 25% | 4.75 million + 25% TNTT over 32 million | 25% TNTT - 3.25 million |
| 6 | Over 52 million to 80 million | 30% | 9.75 million + 30% TNTT over 52 million | 30% TNTT - 5.85 million |
| 7 | Over 80 million | 35% | 18.15 million + 35% TNTT over 80 million | 35% TNTT - 9.85 million |
Taxpayers need to determine their monthly taxable income and corresponding tax bracket, then apply the abridged tax calculation formula to determine the PIT payable.
Example: Ms. A has an income from wages and salaries of 20 million VND per month and contributes to insurance at the following rates: 8% social insurance, 1.5% health insurance on wages, 1% unemployment insurance. Ms. A has one dependent child under 18; during the month, Ms. A does not contribute to charity, humanitarian, or educational support.
Calculation of tax payable using the abridged method:
- Ms. A’s taxable income is 20 million VND.
- Ms. A is entitled to the following deductions:
+ Personal deduction: 11 million VND
+ Dependent deduction for one dependent (1 child): 4.4 million VND
+ Social insurance, health insurance, unemployment insurance:
(Maximum salary cap for insurance contributions is no more than 20 times the statutory pay rate, i.e., no more than 2,340,000 x 20 = 46,800,000 VND)
20 million VND x (8% + 1.5% + 1%) = 4.2 million VND
Total deductions:
11 million VND + 4.4 million VND + 4.2 million VND = 2.1 million VND
- Ms. A’s taxable income is:
20 million VND - 11 million VND - 4.4 million VND - 2.1 million VND = 2.5 million VND
=> The taxable income for the month is 2.5 million VND, which falls into tax bracket 1. Thus, the PIT Ms. A has to pay is:
2.5 million VND x 5% = 312,000 VND
Vietnam: What incomes do incomes from salaries and wages include?
Pursuant to Clause 2, Article 3 of the Law on Personal Income Tax 2007 as amended by Clause 1, Article 1 of the Amended Law on Personal Income Tax 2012, income from wages and salaries includes the following types:
- Wages and salaries and other forms of remuneration;
- Allowances and subsidies, except for allowances and subsidies provided under the law on incentives for people with meritorious service; national defense, security allowances; hazardous and dangerous job allowances; recruitment allowances, regional allowances prescribed by law; sudden hardship subsidies, work accident and occupational disease allowances, one-time childbirth or adoption subsidies, allowances for decline in working capacity, one-time retirement allowances, monthly survivor benefits and other social insurance subsidies; severance and unemployment benefits prescribed by the Labor Code; social protection-related subsidies and other non-salary and non-wage allowances and subsidies prescribed by the Government of Vietnam.
