Quick answer: From tax year 2026, salary and wage income of resident individuals (including resident foreign experts) is taxed under the 5-bracket progressive table of Law 109/2025: up to VND 10 million/month at 5%, VND 10–30 million at 10%, VND 30–60 million at 20%, VND 60–100 million at 30%, and above VND 100 million at 35%. The easiest mistake: the new table applies to the whole of 2026 at finalization, not just from July 2026 — and “taxable income” is what remains after mandatory insurance and family deductions, not gross salary.
Applicable legal bases
The framework below is in force as of 20 October 2026 and directly governs this article:
- Law on Personal Income Tax 109/2025/QH15 (effective 01/7/2026; the table and deductions apply from tax year 2026) — Article 9: 5-bracket progressive table; Article 10: family deductions of VND 15.5 million/month for the taxpayer and VND 6.2 million/month per dependent.
- Decree 253/2026/ND-CP — guidance on PIT withholding, declaration, and finalization.
In-depth analysis
“Progressive by portion” means each slice of income is taxed at its bracket’s rate — not the whole income at the top bracket’s rate. This is the most common misunderstanding when foreign experts estimate their own tax. Example: VND 45 million/month of taxable income means the first 10 million at 5%, the next 20 million at 10%, and the remaining 15 million at 20%; total tax = 0.5 + 2 + 3 = VND 5.5 million, an effective rate of only about 12.2%, not 20%.
The correct five-step computation is: (1) determine total taxable salary/wage income; (2) subtract exempt items (overtime premiums, within-norm allowances); (3) subtract mandatory insurance (social, health, unemployment) and deductible contributions; (4) subtract family deductions (15.5 million + 6.2 million × number of dependents); (5) apply the 5-bracket table to the remainder. Employers withhold monthly under this table; at year-end the annual income is finalized — differences are refunded or additionally paid.
Four steps for a quick monthly computation
- Subtract mandatory insurance: take gross salary minus payable social, health, and unemployment insurance — the step most people skip when self-computing.
- Subtract family deductions: deduct VND 15.5 million for yourself and VND 6.2 million per registered dependent — e.g., 2 dependents means another 12.4 million off.
- Apply each bracket: split the remainder at the 10 / 30 / 60 / 100 million thresholds, multiply by 5% / 10% / 20% / 30% / 35%, and add up — never apply one rate to everything.
- Reconcile at year-end finalization: aggregate 12 months of taxable income, apply the annual thresholds (120 / 360 / 720 / 1,200 million), compare with total withheld — overpaid amounts are refunded, shortfalls additionally paid.
Common risks and how to prevent them
- Applying the top bracket rate to all income: the classic error — always split by bracket.
- Computing on gross salary instead of taxable income: forgetting insurance and family deductions materially overstates the estimated tax.
- Mis-timing the new table: the 5-bracket table applies to the entire 2026 tax year at finalization — not half old, half new.
- Forgetting to register dependents: unregistered dependents mean no VND 6.2 million/person/month deduction — register early, not at finalization time.
Frequently asked questions
1. What is the tax on a VND 50 million/month salary?
Mandatory insurance and family deductions come off first. If VND 30 million of taxable income remains, tax = 10×5% + 20×10% = VND 2.5 million/month. The real figure depends on each person’s insurance and dependents.
2. Does this table apply to non-resident experts?
No. Non-resident individuals face a flat 20% on gross Vietnam-sourced salary and wage income, with no progressive table and no family deductions.
3. Is there a quick way to compute monthly tax?
Yes — once taxable income is known, split it at the four thresholds (10/30/60/100), multiply each slice by its rate, and add up. Many employers keep ready tables per salary level for monthly withholding.
4. What if monthly withholding differs from the annual finalization?
Monthly withholding is provisional; the annual finalization on full-year income is final. Overpaid amounts are refunded, shortfalls additionally paid — so do not worry if monthly figures do not match exactly.
Key takeaway for investors
The new 5-bracket table is simpler than the old 7-bracket one, but the principle is unchanged: split into slices, compute each bracket, add up. For foreign experts, the two decisive figures are deducted mandatory insurance and registered dependents — get these two right and monthly withholding is already close to correct.
This article has been quality-reviewed by the FLAW AI Legal Council This content is legal reference only and does not replace counsel for a specific case.
