Instructions on how to calculate personal income tax in 2024 in Vietnam

1. In 2024, how much salary must be paid in personal income tax?

According to Article 1 Resolution 954/2020/UBTVQH14 New regulations on family deductions are specifically as follows:

- The deduction level for taxpayers is 11 million VND/month (132 million VND/year);

- The deduction for each dependent is 4.4 million VND/month.

Thus, currently, people with a salary of over 11 million VND/month (132 million VND/year) must pay personal income tax.

Accordingly, the more dependents a taxpayer has, the higher the taxable salary according to regulations.

2. Instructions on how to calculate personal income tax in 2024

Note: This method of calculating personal income tax applies to income from salaries and wages

1.1 For resident individuals:

* For resident individuals signing labor contracts of 3 months or more

Based on Personal Income Tax Law 2007 and Article 7, Article 9 Circular 111/2013/TT-BTC, personal income tax for resident individuals signing labor contracts of 3 months or more is determined according to the following formula:

Personal income tax payable = Taxable income x Tax rate

Accordingly, to calculate the tax amount payable, it is necessary to calculate the taxable income and tax rate, specifically:

- Taxable income:

Taxable income = Taxable income - Deductions 

In there,

Taxable income = Total income - Exempt amounts 

- Tax rate:

Tax rates from salaries and wages for individuals signing labor contracts of 3 months or more are applied on a progressive basis, specifically:

* Do not sign a labor contract or sign a labor contract of less than 03 months

Pursuant to Point i, Clause 1, Article 25 Circular 111/2013/TT-BTC, resident individuals who sign a labor contract of less than 03 months or do not sign a labor contract but have a total income of 02 million VND/time or more must deduct tax at the rate of 10% of income (deduction). always before paying).

In other words, individuals who do not sign a labor contract or sign a labor contract of less than 03 months but have income from salaries or wages each time they receive 02 million VND or more must pay tax at the rate of 10%, except for the following cases: Make a commitment according to Form 08/CK-TNCN if eligible.

The tax payable is calculated as follows:

Personal income tax payable = 10% x Total income before payment

1.2 For non-resident individuals

According to Article 18 Circular 111/2013/TT-BTC Personal income tax regulations on income from salaries and wages of non-resident individuals are determined as follows:

Personal income tax payable = Taxable income from salaries and wages x Tax rate (20%).

In particular, taxable income from salaries and wages of non-resident individuals is determined as for personal income taxable income from salaries and wages of resident individuals according to the instructions in Clause 2. Article 8 Circular 111/2013/TT-BTC.

Determination of income subject to personal income tax from salaries and wages in Vietnam in the case of a non-resident individual working simultaneously in Vietnam and abroad but unable to separate the income arising in Vietnam Nam follows the following formula:

Case 1: For cases of foreign individuals not present in Vietnam:

In which: The total number of working days in the year is calculated according to the regime prescribed in the Labor Code of Vietnam.

Case 2: For cases of foreign individuals present in Vietnam:

Other taxable income (before tax) arising in Vietnam in the above cases is other monetary or non-monetary benefits that employees receive in addition to salaries and wages paid by the employer. pay or pay on behalf of the employee.