Bonuses for Employees from the Reward Fund: Are They Subject to Personal Income Tax?
Is the bonus for employees taken from the reward fund subject to personal income tax?
According to the provisions of Article 2 of Circular 111/2013/TT-BTC, taxable income for individuals includes: Cash or non-cash bonuses in any form, including stock bonuses.
Taxable Income
Taxable income of individuals includes the following types of income:
...
2. Income from salaries and wages that employees receive from employers, including:
e) Cash or non-cash bonuses in any form, including stock bonuses, except for the following bonuses:
e.1) Bonuses given in conjunction with titles conferred by the State, including bonuses given for emulation titles and forms of commendation according to the law on emulation and commendation, specifically:
e.1.1) Bonuses given in conjunction with emulation titles such as National Emulation Soldiers; Ministry, Sector, Central Organization, Provincial Emulation Soldiers, Municipal Emulation Soldiers; Basic Emulation Soldiers, Advanced Laborers, Advanced Soldiers.
e.1.2) Bonuses given in conjunction with forms of commendation.
e.1.3) Bonuses given in conjunction with titles conferred by the State.
e.1.4) Bonuses given in conjunction with awards presented by organizations belonging to Central and local political organizations, political-social organizations, social organizations, and social-professional organizations, in accordance with their statutes and laws on emulation and commendation.
e.1.5) Bonuses given in conjunction with Ho Chi Minh Awards, State Awards.
e.1.6) Bonuses given in conjunction with Commemorative Medals, Badges.
e.1.7) Bonuses given in conjunction with Certificates of Merit, Challenge Flags.
The authority to make decisions on commendations and the amounts for emulation titles and forms of commendation mentioned above must comply with the law on emulation and commendation.
e.2) Bonuses given in conjunction with national and international awards recognized by the Vietnamese State.
e.3) Bonuses for technical improvements, inventions, and innovations recognized by competent State agencies.
e.4) Bonuses for detecting and reporting law violations to competent State agencies.
thus, employee bonuses are subject to Personal Income Tax.
*Is the bonus for employees taken from the reward fund subject to personal income tax?*
What are the four types of bonuses that are not subject to personal income tax?
Based on point e, clause 2, Article 2 of Circular 111/2013/TT-BTC, the following bonuses are not subject to personal income tax:
(1) Bonuses given in conjunction with titles conferred by the State, including bonuses given for emulation titles and forms of commendation according to the law on emulation and commendation, specifically:
- Bonuses given in conjunction with emulation titles such as: National Emulation Soldiers; Ministry, Sector, Central Organization, Provincial Emulation Soldiers, Municipal Emulation Soldiers; Basic Emulation Soldiers, Advanced Soldiers, Advanced Laborers.
- Bonuses given in conjunction with forms of commendation.
- Bonuses given in conjunction with titles conferred by the State.
- Bonuses given in conjunction with awards presented by organizations belonging to Central and local political organizations, political-social organizations, social organizations, and social-professional organizations, in accordance with their statutes and laws on emulation and commendation.
- Bonuses given in conjunction with Ho Chi Minh Awards, State Awards.
- Bonuses given in conjunction with Commemorative Medals, Badges.
- Bonuses given in conjunction with Certificates of Merit, Challenge Flags.
Note: The authority to make decisions on commendations and the amounts for emulation titles and forms of commendation mentioned above must comply with the law on emulation and commendation.
(2) Bonuses given in conjunction with national and international awards recognized by the Vietnamese State.
(3) Bonuses for technical improvements, inventions, and innovations recognized by competent State agencies.
(4) Bonuses for detecting and reporting law violations to competent State agencies.
Is the company required to give Tet bonuses to employees?
According to Article 104 of the Labor Code 2019, the regulations are as follows:
Bonus
1. The bonus is an amount of money or assets or other forms that the employer rewards to the employee based on production and business results and the level of work completion by the employee.
2. The reward regulations are decided and publicly announced at the workplace by the employer after consulting the grassroots employee representative organization at places where such organizations exist.
A Tet bonus is understood as an amount of money or assets or other forms that the employer rewards to the employee based on production and business results and the level of work completion by the employee.
Therefore, employers and companies are not required to give Tet bonuses to employees. Whether or not a Tet bonus is given depends on the production and business results, the level of work completion, and the bonus regulations.
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