Vietnam personal income tax 2026: new deductions, 5 brackets and the 10% withholding threshold in ERP payroll
Vietnam personal income tax 2026 brings changes that payroll teams must apply right away: the personal deduction rises to VND 15.5 million per month, the deduction per dependant rises to VND 6.2 million per month, and the progressive tax table shrinks from 7 to 5 brackets. In addition, 10% withholding on casual income applies to payments from VND 5 million per time, and new regional minimum wages took effect on 1 January 2026. In S4 eSuite Payroll, each change is a parameter row with an effective date, not a formula rewrite.
This article summarizes the new values with their legal basis, explains how ERP payroll applies parameters by effective date, and lists what accountants should check. Legal information is compiled from the sources at the end; companies should check the original texts and tax authority guidance before applying them to their own payroll.
What changes in Vietnam personal income tax 2026?
Personal Income Tax Law 109/2025/QH15 was passed by the National Assembly on 10 December 2025 and takes effect on 1 July 2026, with the new family deductions applying from the 2026 tax period. The personal deduction rises from VND 11 million to VND 15.5 million per month, and the deduction per dependant rises from VND 4.4 million to VND 6.2 million per month. For employees earning salaries and wages, higher deductions mean lower taxable income at the same gross pay.
The second change is that the progressive tax table is reduced from 7 to 5 brackets. The table below summarizes the new rates by monthly taxable income:
| Bracket | Monthly taxable income | Rate |
|---|---|---|
| 1 | Up to VND 10 million | 5% |
| 2 | Over VND 10 to 30 million | 10% |
| 3 | Over VND 30 to 60 million | 20% |
| 4 | Over VND 60 to 100 million | 30% |
| 5 | Over VND 100 million | 35% |
Because both the number of brackets and their income bands change, any home-made payroll spreadsheet with nested tax formulas has to be rewritten. That is why many payroll teams treat 2026 as a year to review the whole tax calculation, not just to change one deduction figure.
What is the new 10% PIT withholding threshold?
Under Decree 253/2026/ND-CP, the paying organization withholds 10% PIT on payments from VND 5 million per time to resident individuals who have no labor contract or a labor contract shorter than 3 months. Payments below VND 5 million may still be withheld if the individual asks.
The groups most affected are freelancers, service contractors, hourly part-time staff in F&B chains, and freelance renderers or estimators at consultancies. In S4 eSuite Payroll, freelancers and service contracts have their own payroll, paid hourly or monthly, with 10% withheld according to the threshold. The threshold is a parameter with an effective date, so when the new value applies, the accountant adds a row rather than changing calculation logic. How this works for part-time staff is covered in part-time staff payroll for F&B chains.
What are Vietnam’s regional minimum wages in 2026?
Decree 293/2025/ND-CP, issued on 10 November 2025 and effective from 1 January 2026, sets the minimum wages for employees under labor contracts:
- Region I: VND 5,310,000 per month, VND 25,500 per hour.
- Region II: VND 4,730,000 per month.
- Region III: VND 4,140,000 per month.
- Region IV: VND 3,700,000 per month.
For companies operating in several locations, such as contractors with sites in many provinces, plants in industrial zones or store chains spread across regions, the regional floor is one more parameter to manage. Storing minimum wages as parameters with effective dates lets accountants check each employee’s pay against the floor of the matching region every period.
See the payroll module run on your data
S4 demonstrates payroll, social insurance, PIT and labor cost allocation on Acumatica using your own structure of sites, workshops, projects or stores.
How does ERP payroll apply tax parameters with effective dates?
S4 eSuite Payroll stores every statutory parameter with an effective date and its legal reference. When the law changes, the accountant adds a new row and the old row stays. In the demo video above, the VND 11 million and VND 15.5 million personal deductions coexist, and the old 7-bracket and new 5-bracket tables are kept side by side, so each pay period uses the value in force for that period.
This handles three common needs in a transition year: recalculating a past period with the values of that period, reconciling figures at tax finalization, and explaining to auditors why a period used one value or another. The flow below shows where statutory parameters sit in the payroll process.
S4 eSuite Payroll module flow on Acumatica
1. Inputs
- Time, project hours, accepted quantities
- Labor contracts, freelancers
- Store sales from the POS
2. Pay rules
- Pay groups, earnings as configured rules
- Statutory parameters with effective dates
- Cost allocation rules
3. Calculate and approve
- Payroll, insurance, PIT
- 10% withholding by threshold
- Payroll approval with history
4. Outputs
- Bilingual payslips
- Cost to sites, workshops, projects, stores
- Payroll dashboard, multiple companies
| Parameter | Value | Legal basis |
|---|---|---|
| Personal deduction | VND 15.5 million per month (was VND 11 million) | Personal Income Tax Law 109/2025/QH15 |
| Dependant deduction | VND 6.2 million per month (was VND 4.4 million) | Personal Income Tax Law 109/2025/QH15 |
| Progressive tax table | 5 brackets, 5% to 35% (was 7 brackets) | Personal Income Tax Law 109/2025/QH15 |
| 10% withholding on casual income | Payments from VND 5 million per time | Decree 253/2026/ND-CP |
| Region I monthly minimum wage | VND 5,310,000 from 1 January 2026 | Decree 293/2025/ND-CP |
On timing: the law takes effect on 1 July 2026, while the family deductions apply from the 2026 tax period. Accountants should enter each parameter’s effective date according to the legal text and tax authority guidance, then let the system pick the right value for each pay period.
What should payroll accountants check on 2026 payroll?
Before the first pay period with the new values, review both parameters and employee data, because correct parameters with wrong records still produce wrong results:
- Effective date of each parameter: personal deduction, dependant deduction, tax table, 10% withholding threshold, regional minimum wage.
- Dependant records: the number of registered dependants per employee, since the deduction applies per person.
- Contract classification: who has a labor contract of 3 months or more, and who is a freelancer, service contractor or on a contract under 3 months, so the right withholding applies.
- Tax-exempt income: the overtime premium must be split out and kept out of taxable income.
- Pay by region: compare employees’ pay in each location with the new regional minimum.
- Trial run: run one payroll with the new parameters and compare it with the previous period to explain tax differences to employees.
How do employees understand the new tax on their payslips?
The bilingual payslip in S4 eSuite Payroll explains how PIT is calculated and can be emailed to each employee. When tax changes because of higher deductions or the new table, employees see the calculation on the payslip itself instead of asking the payroll team. The chief accountant approves the payroll and every approval step is kept in the history, which shows which parameters each period used.
Why manage tax parameters in ERP rather than spreadsheets?
Managing tax parameters in the ERP applies each legal change consistently to every payroll while keeping a history for later review. S4 eSuite Payroll runs inside Acumatica Cloud ERP and supports multiple companies on one system, so the payroll team checks how new parameters are applied in one place instead of across many files or packages.
The benefit goes beyond tax. Because payroll shares the platform with accounting and projects, salaries, benefits and employer insurance reach the right cost object as soon as payroll is approved. Every dong of labor cost lands on the right site, workshop, project or store, on one platform. See the four-industry overview in payroll software inside ERP, how the tax-exempt overtime premium is split in 3-shift factory payroll, and product details on the S4 eSuite Payroll page.
Frequently asked questions
What are the family deductions for Vietnam personal income tax 2026?
Under Personal Income Tax Law 109/2025/QH15, the personal deduction is VND 15.5 million per month and each dependant VND 6.2 million per month, from the 2026 tax period.
How many brackets does the 2026 PIT table have?
Five: up to VND 10 million 5%, over 10-30 million 10%, over 30-60 million 20%, over 60-100 million 30% and over VND 100 million 35%.
What is the new 10% withholding threshold?
Under Decree 253/2026/ND-CP, 10% is withheld on payments from VND 5 million per time to resident individuals without a labor contract or with a contract under 3 months.
What is the region I minimum wage in 2026?
Under Decree 293/2025/ND-CP, the region I monthly minimum wage is VND 5,310,000 and the hourly minimum is VND 25,500, from 1 January 2026.
Does updating 2026 PIT in S4 eSuite Payroll require formula changes?
No. The accountant adds a parameter row with an effective date, the old value is kept, and each pay period uses the value in force for that period.
References
- Tap chi Cong Thuong - What is new in the 2025 Personal Income Tax Law (in Vietnamese)
- LSVN - Higher family deductions from 1 July 2026 (in Vietnamese)
- LSVN - Withholding threshold for casual income raised to VND 5 million per payment (in Vietnamese)
- Thue Hai Quan - 10% PIT withholding applies to payments from VND 5 million per time (in Vietnamese)
- LuatVietnam - Decree 293/2025/ND-CP on regional minimum wages (in Vietnamese)
- YouTube S4 Consulting - Acumatica Construction Payroll for Vietnam - Demo
