1. Overview of Personal Income Tax Thresholds in Vietnam from 2026
The official policy to increase personal allowances to VND 15.5 million per month from 2026 represents a significant adjustment to Vietnam’s personal income tax system, aiming to ease the tax burden and better reflect current living costs. Under this policy, the personal allowance for taxpayers rises from VND 11 million to VND 15.5 million per month, while the allowance for each dependent increases to VND 6.2 million per month.
This change raises the taxable income threshold, providing meaningful support to middle-income earners, especially those with children or other dependents. Effective from the 2026 tax year, the new regulation not only helps reduce financial pressure on salaried individuals but also enables taxpayers to plan their personal finances more proactively in line with economic conditions and cost of living changes.
2. Family Deduction Levels Applicable from 2026
According to the Resolution, starting from the 2026 tax assessment period, personal income applied in personal allowance applied in personal income tax (PIT) calculation will be significantly increased. Specifically:
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Personal allowance for the taxpayer will be raised to VND 15.5 million per month (equivalent to VND 186 million per year).
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The dependent allowance will be set at VND 6.2 million per month for each eligible dependent.
Example 1: Individual With No Dependents
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Monthly income: VND 18,000,000
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Personal allowance: VND 15,500,000
After applying the personal allowance, only VND 2,500,000 remains subject to personal income tax. If mandatory insurance contributions are further deducted, this individual may not incur any PIT liability.
Example 2: Individual With One Eligible Dependent
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Monthly income: VND 25,000,000
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Personal allowance: VND 15,500,000
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Dependent allowance (1 dependent): VND 6,200,000
Taxable income calculation: 25,000,000 − 15,500,000 − 6,200,000 = VND 3,300,000
This taxable income falls within the lowest PIT bracket under Vietnam’s progressive tax rate system.
3. Who Qualifies as a Dependent for Family Deduction Purposes?
Pursuant to Point d, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC, dependents eligible for family deductions when calculating personal income tax (PIT) include the following categories:
3.1. Children of the Taxpayer
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Children under 18 years of age (calculated on a monthly basis).
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Children aged 18 or older who are disabled and unable to work.
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Children who are studying in Vietnam or overseas at universities, colleges, professional secondary schools, or vocational institutions, including children aged 18 or older who are still attending high school (including the period from June to September of Grade 12 while awaiting university entrance exam results), with no income or with an average monthly income not exceeding VND 1 million.
3.2. Spouse of the Taxpayer
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Of working age: must be disabled, unable to work, and have no income or an average monthly income not exceeding VND 1 million.
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Beyond working age: must have no income or an average monthly income not exceeding VND 1 million.
Specifically, according to Clause 1, Article 4 of Decree No. 135/2020/NĐ-CP, the statutory retirement age in 2025 is:
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Male employees: 61 years and 3 months
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Female employees: 56 years and 8 months
3.3. Parents and Parents-in-law
This category includes biological parents, parents-in-law, step-parents, and legally adopted parents:
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Of working age: must be disabled, unable to work, and have no income or an average monthly income not exceeding VND 1 million.
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Beyond working age: must have no income or an average monthly income not exceeding VND 1 million.
3.4. Other Individuals Directly Supported by the Taxpayer
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Biological brothers and sisters.
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Paternal and maternal grandparents.
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Aunts, uncles (paternal or maternal).
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Nieces and nephews (children of biological siblings).
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Other individuals without means of support, as prescribed by law.
Note: Individuals under this category are only considered eligible dependents if they have no means of support, are directly supported by the taxpayer, and meet the statutory conditions regarding income level and working capacity in accordance with Point đ, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC.
4. How to Determine Family Deduction When Calculating PIT from 2026
4.1. Step 1: Determine Total Taxable Income for the Period
Total income includes all salary, wages, and salary-like allowances arising during the relevant tax assessment period.
4.2. Step 2: Apply Deductions For The Taxpayer And Eligible Dependents
The personal allowance is deducted directly at VND 15.5 million per month. For each eligible and duly registered dependent, an additional VND 6.2 million per month may be deducted.
Total family deduction = Personal allowance + Dependent allowances.
Accordingly, from 2026, individuals without dependents will only incur personal income tax (PIT) when their income exceeds VND 15.5 million per month, while individuals with one eligible dependent will begin to pay PIT when their income exceeds VND 21.7 million per month. These guidelines enable employees to more easily estimate their taxable income and PIT liabilities, thereby proactively planning their personal finances once the new policy takes effect.
4.3. Illustrative Example
Mr. C is a salaried employee who has registered two eligible dependents.
Monthly income: VND 30,000,000
Personal allowance: VND 15,500,000 per month
Dependent allowances: VND 6,200,000 × 2 = VND 12,400,000 per month
Taxable income: 30,000,000 − 15,500,000 − 12,400,000 = VND 2,100,000 per month
Under the progressive PIT tariff, taxable income of VND 2.1 million per month falls within Bracket 1, subject to a 5% tax rate.
PIT payable: 2,100,000 × 5% = VND 105,000 per month
This example demonstrates that, under the new family deduction thresholds effective from 2026, taxpayers with multiple dependents benefit significantly, as their PIT liabilities are substantially reduced and their net take-home income is improved.
5. How Vina TPT Supports Foreigners with Personal Income Tax Finalization in Vietnam
Vina TPT offers comprehensive Personal Income Tax (PIT) support for foreign employees in Vietnam, ensuring full compliance with local regulations while simplifying the process for businesses:
- Record Review: Carefully review labor contracts, payroll records, tax deduction documents, foreign-sourced income records, and related invoices to ensure all data is accurate and complete.
- Tax Calculation: Calculate taxable income, apply family and dependent deductions, and ensure proper application of Double Taxation Agreements (DTA) to avoid double taxation.
- Declaration Preparation & Submission: Prepare PIT finalization dossiers and submit them via the e-tax system or on behalf of the business, providing bilingual Vietnamese-English reports for easy monitoring.
- Tax Refund Support: Assist with preparing and monitoring tax refund dossiers, liaising with tax authorities to secure timely and transparent refunds.
- Ongoing Consultation: Represent the business in the event of tax audits, additional document requests, or inquiries, helping to manage administrative requirements efficiently.
Contact Vina TPT today for comprehensive consultation and end-to-end support on personal income tax matters in Vietnam.
