Vietnam: How much personal income tax do seasonal employees have to pay?

According to the Labor Code 2012 of Vietnam, there are 03 types of labor contract, including: indefinite-term labor contract; definite-term labor contract; and seasonal or work-specific labor contract that has a duration of under 12 months.

According to Article 25 of the Circular No. 111/2013/TT-BTC of the Ministry of Finance of Vietnam, depending on the duration of the seasonal labor contract, the regulations on personal income tax withholding will be different. To be specific:

- The income payer shall deduct tax from incomes of residents that sign labor contracts for 03 months or longer according to the progressive tax table, including the persons that sign such contracts at various places.

- The income payer shall still withhold tax from the incomes earned residents that sign labor contracts for 03 months but resign before such labor contracts expire according to the progressive tax table.

- The organization or person that pays a total income from 2 million VND to a resident that does not sign a labor contract (as guided in Point c and Point d Clause 2 Article 2 of this Circular) or that signs a labor contract for less than 03 months shall withhold 10% tax on the income before it is paid to the person.

For the person that earns only a taxable income as stated above but the total taxable income estimated after personal deductions are made does not reach the taxable level, the person shall make and send a commitment (the form is provided in the guiding documents on tax administration) to the income payer as the basis for temporarily exempting the income from personal income tax.

Based on the commitment made by the income earner, the income payer shall not withhold tax. At the end of the tax year, the income payer shall make a list of persons that earn incomes below that taxable level and send it to the tax authority.

Note:

- The persons are responsible for the commitments they made. Any deceit discovered shall be penalized in accordance with the Law on Tax administration of Vietnam.

- The persons that make commitments as guided in this Point shall obtain tax registration and have tax codes when the commitments are made.

Nguyen Trinh

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE