What are the income tax and salary deduction rates in Vietnam?

If you're working in Vietnam, it's essential to know how taxes and deductions from your salary work. The government regularly reviews and updates tax rates and rules.

Personal Income Tax (PIT)

Employees must pay income tax if their monthly wage exceeds the annual threshold set by the government. This threshold varies depending on whether you have registered dependents.

Remote calculates Personal Income Tax (PIT) based on your assessable income. This is your total taxable income after deducting compulsory insurance premiums, charitable and humanitarian contributions, tax-exempt amounts, and dependent reliefs (if applicable).

For example, if your salary—after deducting compulsory insurance premiums, charitable and humanitarian contributions, and other tax-exempt amounts—is at least 11 million VND per month (or 132 million VND per year), you are required to pay personal income tax.

If you have registered dependents, you can deduct 4.4 million VND per month for each dependent. In this case, you would start paying personal income tax only if your salary exceeds, for example, 15.4 million VND per month.

Income Tax Rates

Your income is taxed at progressive rates, ranging from 5% to 35%, depending on how much you earn. If you are a tax resident in Vietnam, your worldwide income is subject to Vietnamese personal income tax, regardless of where it's paid or received.

Social, Health, and Unemployment Insurance (SHUI)

In Vietnam, you are required to contribute to Social, Health, and Unemployment Insurance (SHUI). Remote withholds a portion of your salary and contribute it to these insurance programs on your behalf.

For 2024, the contribution rates are as follows:

• Social Insurance: 8%
• Health Insurance: 1.5%
• Unemployment Insurance: 1%

These contributions are capped at 20 times the basic salary, which is currently set at 46,800,000 VND.

Trade Union Funds

Trade union contributions are paid by employers, so employees don't need to worry about this deduction from their salary.

Benefits in Kind (BIK)

If an employer offers additional benefits, such as private health insurance, these are considered benefits in kind. Additional salary deductions may apply for these benefits.

Example of salary structure in 2024:

Let's consider an example: In July 2024, the basic salary increased to 46,800,000 VND. For an employee earning a monthly salary of 53,820,000 VND (about 2,100 USD), here's a breakdown of their deductions:

On the other hand, the employer contributions have raised as follows: