At peak season factories hire hundreds of seasonal workers and contract collaborators, and this is exactly the group most often withheld wrongly: withholding below the threshold, failing to withhold above it, and year-end records nobody can reconcile. Errors here are small per person but multiply across files and surface precisely at inspection. This article settles the withholding rate, filing, commitment and finalisation for this workforce under the current frame.
Legal basis
The source-withholding rule sits in the personal income tax guidance, principally Article 25 of Circular 111/2013/TT-BTC: an income payer paying salary or wages to a resident individual with no labour contract, or a contract under three months, must withhold 10 per cent on each payment of VND 2,000,000 or more, before paying the individual. Workers on contracts of three months or more fall in the progressive-schedule group with personal deductions — the two groups must never be processed as one.
An important transition is under way: the Personal Income Tax Law 109/2025/QH15 of the 15th National Assembly replaces Law 04/2007/QH12, and the new family deductions — VND 15.5 million for the taxpayer and VND 6.2 million per dependant — apply officially from the 2026 tax period. For 2026 periods the factory must apply the new deductions to the progressive group; detailed sub-law guidance under the new statute should be rechecked at the nearest filing date.
Applied analysis
The commitment mechanism is the lawful pressure valve: an individual whose only income falls in the 10 per cent withholding class, and whose estimated total income does not reach the taxable level after deductions, may file a commitment on the current form — Form 08/CK-TNCN — so the payer temporarily withholds nothing. The factory must retain the commitment; the individual bears responsibility for its content, and if total income later proves to exceed the threshold, the finalisation duty returns to that individual. Without a written commitment there is no basis to skip withholding.
The deeper hidden risk is contract classification: calling people “collaborators” while they in fact work shifts under management and are paid monthly gives the relationship the marks of a labour contract under the Labour Code 45/2019/QH14, dragging in social insurance and an entirely different tax treatment. Misclassification at the contract stage corrupts the withholding stage, so human resources and accounting must agree classifications before the season rather than case by case.
Recommended actions
A compact factory workflow: classify each person into the correct contract group at intake; test the VND 2,000,000 per-payment threshold to decide on the 10 per cent withholding; collect the commitment before the first payment where the individual requests temporary non-withholding; issue withholding certificates for every withheld case; and summarise on the return and in annual finalisation by the correct income group. Seasonal-group data should be stored separately so year-end reconciliation never mixes with the main payroll.
One often-missed point: seasonal workers return for multiple stints in a year. Each stint re-opens the contract and threshold assessment; accumulated working time can change the nature of the relationship and with it the withholding group for later payments.
Frequently Asked Questions
How much can be deducted?
Withhold 10 per cent on each payment of VND 2,000,000 or more, for resident individuals with no labour contract or a labour contract under three months, under the guidance in Article 25 of Circular 111/2013/TT-BTC. A payment below VND 2,000,000 is not withheld at source on that occasion. The group on contracts of three months or longer is not on the 10 per cent rate at all: they are withheld on the progressive schedule after family deductions — from the 2026 tax period, VND 15.5 million for the taxpayer and VND 6.2 million per dependant under the Personal Income Tax Law 109/2025/QH15.
Declaration?
The payer files monthly or quarterly depending on its filing class, summarising income paid and tax withheld for this group on the personal income tax withholding return, and finalises annually for all individuals it paid. Every withheld individual receives a withholding certificate for their own finalisation or for authorising the payer to finalise. Keep seasonal and collaborator data separate from the progressive payroll from data entry onwards, because mixing the two groups is the most common source of finalisation discrepancies.
Commitment?
The commitment is the individual’s own written undertaking for temporarily escaping the 10 per cent withholding: it applies only where the individual has a single source of income in the rate-withholding class and estimated total annual income does not reach the taxable level after family deductions. The current form is Form 08/CK-TNCN. The payer keeps the commitment as its basis for not withholding; the individual bears full responsibility if the commitment is wrong. Without a commitment the payer must still withhold once the payment threshold is met, however low the individual says their income is.
Finalization?
Year end has two finalisation layers. The payer finalises the income it paid and the tax it withheld, including for seasonal workers who have already left. An individual with income from two or more sources, or with rate-withheld income whose total reaches the taxable level, must self-finalise with the tax authority — unless eligible to authorise the payer to finalise. The 10 per cent amounts withheld during the year are credited against the final liability, and any overpayment is refunded under the personal income tax refund procedure.
This article has been quality-reviewed by the FLAW AI Legal Council