Quick answer: Tet bonuses, 13th-month salary and all performance bonuses for foreign experts are added to taxable personal income of the month in which the bonus is received — they may not be spread over 12 months to soften the tax brackets. For resident individuals, the bonus month is taxed under the 5-bracket progressive schedule (5%, 10%, 20%, 30%, 35%) applicable from tax year 2026; for non-residents, the entire income bears the flat 20% rate. Only national or international prizes recognized by the State are exempt.
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 01/07/2026; provisions on employment income of resident individuals apply from tax year 2026; replaces Law 04/2007/QH12) — Article 3 (employment income includes bonuses and monetary or non-monetary benefits in any form); Article 21 (non-residents: 20% on total employment income in Vietnam).
- Decree 253/2026/ND-CP (effective 01/07/2026) — guidance on PIT withholding per payment.
- Law on Tax Administration 108/2025/QH15 (effective 01/07/2026, replacing Law 38/2019/QH14) — withholding obligation of the payer at the time of payment.
In-depth analysis
Many foreign experts — and even HR teams — assume the 13th-month salary is a “13th month of salary” taxed like an ordinary month, or that the Tet bonus sits outside income tax. Both are technically wrong. The law classifies all bonuses — Tet, 13th-month, performance, project bonuses — as employment income, and the computation principle is to add them to the taxable income of the period (month) in which the employee actually receives the money.
The practical consequence: in the Tet bonus month, an expert’s taxable income can double or triple a normal month — and because of the progressive schedule, the extra income falls into higher brackets. Example: a resident expert with normal monthly taxable income of VND 40 million mostly faces 10–20% brackets; but in the month receiving an extra VND 40 million 13th-month salary, the total VND 80 million pushes the portion above 60 million into the 30% bracket. This is not “double taxation” — it is the natural result of a progressive schedule when income bunches into one month.
Worked example for a bonus month
Take a resident expert earning VND 50 million/month, personal deduction VND 15.5 million, one dependent VND 6.2 million, mandatory insurance VND 5 million/month. Normal month: taxable income = 50 − 15.5 − 6.2 − 5 = VND 23.3 million; tax = 10 × 5% + 13.3 × 10% = 0.5 + 1.33 = VND 1.83 million. Tet month with an extra VND 50 million bonus: taxable income = VND 73.3 million; tax = 10 × 5% + 20 × 10% + 30 × 20% + 13.3 × 30% = 0.5 + 2 + 6 + 3.99 = VND 12.49 million — nearly 7 times a normal month, even though annual income only doubles in that month. This shows why C&B teams must forecast the “Tet tax shock” for experts instead of letting them discover it on the payslip.
For a non-resident expert the math is simpler but “more expensive”: the whole bonus joins total income taxed at the flat 20%, with no deductions. A VND 50 million Tet bonus means VND 10 million withheld right at payment.
The payment date determines the tax period
Tax is computed at the time of actual receipt, not when the company resolves the bonus or books the expense. A 2026 Tet bonus paid in January 2027 falls into January 2027 income. Conversely, a 2026 bonus advanced in December 2026 falls into December 2026. FDI companies must align the bonus resolution, the actual cash-out date and the filing period — a mismatch distorts withholding figures, and at year-end finalization the tax authority reconciles against actual cash flows.
One more practical point: if an expert finishes the contract and leaves Vietnam before Tet but the company still pays the Tet bonus after departure, that bonus remains employment income arising from work in Vietnam — the payer must still withhold before remitting the money abroad, applying the rate based on residency status at the time of payment.
Common risks and how to prevent them
- Splitting the bonus over 12 months to dodge higher brackets: the authority taxes by actual monthly receipt — no accounting allocation changes the real cash-flow timing.
- Assuming Tet bonuses are tax-exempt: only State-recognized national or international prizes are exempt; corporate Tet bonuses and 13th-month salary are fully taxable.
- Not forecasting the Tet-month tax for experts: causes surprise and internal complaints — C&B should simulate the Tet payslip from Q4.
- Forgetting to withhold on bonuses paid after the expert has left: withholding at source is still required before remitting abroad.
Frequently asked questions
1. Can the 13th-month salary be taxed as a separate month?
No. It is added to the taxable income of the month actually received and taxed under the progressive schedule as a whole — it cannot be carved out as a “separate month” to reuse the lower brackets.
2. Are Tet bonuses exempt from PIT?
No. Tet, holiday, productivity and project bonuses are all taxable. Only national or international prizes recognized by the State are exempt.
3. How is a non-resident expert’s Tet bonus taxed?
The whole bonus joins total employment income taxed at the flat 20%, with no deductions, withheld right at payment.
4. A 2026 bonus paid in January 2027 — which year does it fall into?
The time of actual receipt — January 2027. PIT follows the cash-receipt principle, not the year the bonus “belongs to” on the books.
Key takeaway for investors
Tet bonuses and 13th-month salary are not “off-tax” items — they join the bonus month’s income under the progressive schedule, making Tet month typically the expert’s highest-tax month of the year. FDI companies should pre-simulate the Tet payslip, align payment timing with the filing period, and remember to withhold even for experts who have already left the country.
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.