After the salary reform, what are changes of the personal income tax of teachers in Vietnam?
After the salary reform, what are changes of the personal income tax of teachers in Vietnam? Thank you! - Mr. Long (Dong Thap)
How is the salary scale for teachers structured after the salary reform in Vietnam?
Based on Subsection 3.3.1, Section 2 of Resolution 27-NQ/TW in 2018, the content of the reform is as follows:
Content of the reform
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3.1. For officials, public employees, and armed forces personnel (in the public sector)
a) The design of the new salary structure includes: Basic salary (accounting for approximately 70% of the total salary fund) and additional allowances (accounting for approximately 30% of the total salary fund). Additional bonuses are provided (the bonus fund is approximately 10% of the total annual salary fund, excluding allowances).
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As above regulations, the salary scale for teachers after the salary reform changes as follows:
Salary = Basic salary + Additional allowances
Where:
- Basic salary accounts for approximately 70% of the total salary fund.
- Additional allowances account for approximately 30% of the total salary fund.
In addition, there is a provision for additional bonuses (the bonus fund is approximately 10% of the total annual salary fund, excluding allowances).
A new salary scale system is developed based on job positions, titles, and leadership positions to replace the current salary scale system. Specifically, two salary scales are established as follows:
(1) The leadership position salary scale applies to teachers who hold leadership positions as officials or public employees.
(2) The professional and vocational salary scale, based on the official rank and professional title, applies to officials and public employees who do not hold leadership positions.
Note: The transition from the old salary to the new salary ensures that the new salary is not lower than the current salary being received.
After the salary reform, what are changes of the personal income tax of teachers in Vietnam? - image from internet
After the salary reform, what are changes of the personal income tax of teachers in Vietnam?
Based on the provisions of Article 2 of the Law on Public Employees in 2010, public employees are Vietnamese citizens recruited according to working positions, working in public service providers under working contracts and salaried from salary funds of public service providers in accordance with law.
According to the provisions of Article 7 of Circular 111/2013/TT-BTC, the personal income tax for teachers can be calculated as follows:
Personal income tax on income from salary, wages = Taxable income x Tax rate
Where:
Taxable income = Total income - Tax-exempt amounts
When implementing the salary reform, starting from July 1, 2024, based on Subsection 3.1, Section 3, Part 2 of Resolution 27-NQ/TW 2018, the following provisions are specified:
Content of the reform
3.1. For officials, public employees, and armed forces personnel (in the public sector)
a) Designing a new salary structure that includes: Basic salary (accounting for approximately 70% of the total salary fund) and additional allowances (accounting for approximately 30% of the total salary fund). Additionally, bonuses are provided (the bonus fund is approximately 10% of the total annual salary fund, excluding allowances).
b) Developing and issuing a new salary scale system based on job positions, titles, and leadership positions to replace the current salary scale system. Transitioning from the old salary to the new salary, ensuring that the new salary is not lower than the current salary being received, including:
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As above regulations, starting from July 1, 2024, teachers will apply a new salary structure consisting of:
Salary = Basic salary (70% of the total salary fund) + allowances (30% of the total salary fund).
In addition, there will be additional bonuses (the bonus fund is approximately 10% of the total annual salary fund, excluding allowances).
Furthermore, according to the orientation of Resolution 27-NQ/TW in 2018, a new salary scale system based on job positions, titles, and leadership positions will be developed and issued to replace the current salary scale system. The transition from the old salary to the new salary will ensure that the new salary is not lower than the current salary being received.
Therefore, the salary scale for teachers from July 1, 2024, after the salary reform, may be higher than the salary scale applied until June 30, 2024, and it will affect the personal income tax calculation. The specific changes in the personal income tax calculation for teachers when the salary reform is implemented will depend on the specific salary scale.
Note: Until now, there are no details available regarding the new salary scale applicable to public employees in general and teachers in particular from July 1, 2024.
What is the statutory pay rate for teachers who are public employees in Vietnam?
Pursuant to Clause 2 Article of the Decree 24/2023/ND-CP stipulating statutory pay rate:
Statutory pay rate
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2. From July 01, 2023, the statutory pay rate is VND 1.800.000 per month.
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As regulations above, the statutory pay rate for teachers who are public employees in Vietnam is VND 1.800.000 per month.
The statutory pay rate shall be used as the basis for:
- Determining the levels of salaries in payrolls, allowances and other benefits as per the law with regard to individuals as defined in Article 2 of this Decree;
- Determining the levels of subsistence allowances as per the law;
- Determining contributions and benefits concerning the statutory pay rate.
*Note: The salary mentioned above apply until the end of July 1, 2024. Starting from July 1, 2024, the salary reform policy according to Resolution 27 will be implemented.
Best regards!
