How To Calculate Personal Income Tax For Foreigners In Vietnam

Personal income tax in Vietnam (2026).

Quick guide for individuals and employers in Vietnam.

In Vietnam, personal income tax (PIT) is determined by an individual’s tax residency status. Employment income is usually taxed at progressive rates, while other types of income are subject to fixed rates.

This guide, updated as of 1 January 2026, is designed for both residents and non-residents. It covers taxes on salaries, employment income, business earnings and capital gains. Additionally, it explores social, health and unemployment insurance contributions, providing a comprehensive overview of financial obligations. The 2025 Vietnam Personal Income Tax Guide helps individuals make informed financial decisions and optimise their tax strategies in Vietnam’s evolving economic and tax landscape.

Tax residency

Vietnam tax residents are taxable on their worldwide income, whilst non-tax residents are only taxable on their Vietnamese-sourced income.

A tax resident is an individual who satisfies one of the following:

Resides in Vietnam for 183 days or more:
- Within 12 consecutive months from the first day of arrival
- In a calendar year
Holds a temporary or permanent residence card for Vietnam
Leases a property for a term of 183 days or more in Vietnam in the assessment period

If the above tests are not met, then an individual will be treated as a non-tax resident in Vietnam. However, care still needs to be taken, as there are circumstances where an individual may still be deemed a tax resident in Vietnam if they cannot prove they are a tax resident in another country.

Taxable income

The notion of Taxable Income is essential in the calculation of the PIT for foreign individuals, regardless they are tax resident or non-tax resident in Vietnam, and it is important to understand what this refers to.

For Tax Residents, Taxable Income is represented by all income which is generated worldwide, regardless of where the income is paid or received. For a non-tax resident, all income received for work undertaken in Vietnam, regardless of where it is received. This means that if the foreign individual is engaged under a contract work in Vietnam but gets paid in an offshore account, these funds are generally liable to personal income tax in Vietnam (other than where a specific Double Tax Agreement exemption applies). This is one of the common misunderstandings, and this is regularly debated in online media, among freelance consultants and expatriates involved project work, or digital nomads. This article is relevant to what the government is doing to actively pursue this issue in the tax system.

Personal income tax rates

The monthly taxable income generally represents the monthly salary or wage of the individual, and is taxed at a progressive rate from 5% to 35% for a Tax Resident, and a fixed 20% rate for a Non-Tax Resident, as in the chart below.

Monthly Taxable Income (VND)	Tax Resident PIT Rates	Non-Tax Resident PIT Rate
0 – 10,000,000	5%	20%
10,000,001 – 30,000,000	10%
30,000,001 – 60,000,000	20%
60,000,001 – 100,000,000	30%
100,000,001 +	35%

Notes:

A personal deduction of VND 15.5 million is provided each month, which reduces the monthly taxable income accordingly.
Additional dependent deductions of VND 6.2 million per dependent per month are permitted where they meet the requirement and are registered, further reducing monthly taxable income.

Personal tax rates on other income

The Monthly Taxable Income generally represents the monthly salary or wage of the individual, and is taxed at a progressive rate from 5% to 35% for a Tax Resident, and a fixed 20% rate for a Non-Tax Resident, as in the chart below

Types of income	Tax resident	Non-tax resident
Business income (rates depend on the type of income)	0.5%-5%	1%-5%
Non-bank interest	5%	5%
Dividends	5%	5%
Sale of shares (public)	0.1% of sales proceeds	0.1% of sales proceeds
Capital transfers	20% of the net gain	0.1% of sales proceeds
Sales of real estate	2% of the sales proceeds	2% of the sales proceeds
Income from copyright, franchising or royalties	5%	5%
Income from prizes, inheritances or gifts	10%	10%

Compulsory insurances

Insurance	Employee portion	Employer portion	Maximum cap*
Social insurance	8%	17.5%	VND 46,800,000
Health insurance	1.5%	3%	VND 46,800,000
Unemployment insurance	1%	1%	VND 106,200,000**

Notes:

(*) The maximum caps are the maximum salaries at which insurances are calculated. Earnings above these caps are not included in insurance calculations. These caps are based on basic wage for social and health insurance and minimum regional wage for unemployment insurance. From 1 July 2025, the temporary reference level is equal to the current basic salary of VND 2,340,000 per month. However, when the basic salary is completely abolished, the reference level will be regulated by the Government but not lower than the current figure.
(**) The unemployment insurance cap varies depending on the employment zone. The displayed calculation is for Zone 1 employees.
Insurances withheld from employee gross salaries are deductible for PIT (i.e., not subject to tax), and employer contributions are not regarded as a taxable benefit for the employee.
Foreign employees are exempt from unemployment insurance.

Tax year and finalisation

Individuals are subject to a calendar year as their standard tax year. Employers are required to withhold PIT from employee salaries and remit monthly or quarterly.

Other taxes are generally required to be withheld at source (i.e., dividends), or self-declared on an events basis.

Individuals will need to determine whether they will need to undertake an annual tax finalisation to ensure that their tax finalisation matters are in hand where necessary by the deadline of PIT finalisation.

If an individual only has income from a single employer during the year or other income in limited circumstances, they can authorise their employer to finalise on their behalf by the last day of the third month from tax year end (i.e., 31 March).

If an individual wishes to claim a tax refund or has a tax liability to the tax authorities, they must complete a tax finalisation by the end day of the fourth month of the following year from the year-end (i.e., 30 April).

Individuals with simple tax matters and who do not owe any taxes to the authorities do not need to finalise. However, this may impact future years if their tax affairs become complicated. Therefore, all taxpayers are encouraged to finalise their taxes each year.

Individuals commonly enter into Service Contracts in Vietnam for short-term activities, but as these are not treated as Labour Contracts, PIT will not be applied on a progressive scale. Instead, payments exceeding VND 2 million a month will require 10% PIT (for Tax Residents) to be withheld and remitted by the paying entity (the company) as a pre-payment of PIT for the individual.

At the end of the year, this income will be included in the annualised/taxable income subject to PIT at progressive rates, and a credit will be given for the 10% already paid.

Any tax shortfall will need to be paid to the tax authorities upon finalisation.

Non-taxable benefits and income

Although the definition of taxable income is broad, there are certain defined benefits that are excluded from taxation (non-taxable allowances). These allowances require supporting vouchers or company policies depending on each type of allowance.

Some non-taxable allowances include:

Once per year round-trip airfares for expatriate employees returning home or Vietnamese working abroad returning
School fees (excluding tertiary) for children of expatriate employees or Vietnamese working abroad
Mid-shift meals (Companies may set their own reasonable spending levels based on internal policies or collective labour agreements. Alternatively, they can use the previous benchmark of VND 730,000 as a reference and stay updated with the latest regulation)
One-off relocation costs for expatriates coming to Vietnam for employment and for Vietnamese working abroad
Allowances or benefits for weddings or funerals
Uniforms (subject to a cap if provided in cash and cap amount of non-tax in case of direct payment to employees is VND 5 million per year)
Benefits provided in kind on a collective basis (e.g., memberships) where an individual is not identified as a beneficiary

Additional income that is not taxable includes:

Interest earned on deposits with banks and credit institutions
Payments from life and non-life insurance policies
Retirement pensions paid from the Social Insurance Fund
Transfers of property between direct family members
Inheritances and gifts from direct family members
Monthly retirement pensions from voluntary insurance schemes
Income from winnings at casinos

For employment income paid by the head office to employees working at dependent units/business locations in different provinces, the PIT withheld for these employees will be paid to the provinces where the employees work.

Double taxation agreements

These agreements take place to avoid having a situation where a taxpayer will pay tax on the same income twice, one in Vietnam and once in his domicile country.

Tax relief in Vietnam under a DTA is not automatic. Foreign taxpayers are required to submit a notification application to the Vietnamese tax authorities 15 days prior to the tax payment deadline in order to seek to apply double taxation relief.

Applications can still be submitted in arrears up to 3 years from the tax payment due date, however implications may arise with late filed applications.

The DTAs also have the following purposes:

Exemption or reduction of payable tax amounts in Vietnam for residents of the signatory country
Deduct the amount of tax paid by the Vietnamese Resident in the Contracting State from the amount payable in Vietnam
Supporting the signatory countries to prevent tax evasion on taxes on income and assets

Conclusion

As Vietnam continues attracting local and foreign talent, understanding the tax obligations becomes increasingly crucial. Whether an individual is a tax resident facing progressive rates on worldwide income or a non-resident taxed at a flat rate on Vietnamese-sourced income, proper tax planning can lead to significant financial benefits.

It is important to note that while this guide offers valuable insights, tax regulations can be complex and subject to change. Individuals are encouraged to stay informed about updates to tax laws and consider seeking professional advice for their specific situations. Timely tax finalisation, accurate reporting and a clear understanding of taxable and non-taxable income are key to successfully managing personal tax affairs in Vietnam.