Personal Income Tax Vietnam: 2026 Guide for Foreigners
Foreign employees working in Vietnam may be required to pay Vietnamese personal income tax even when their salary is paid from overseas.
The amount of tax payable depends on several factors, including the employee’s tax residency, number of days in Vietnam, sources of income, employment benefits, available deductions and any applicable double taxation agreement.
Vietnam introduced significant personal income tax changes for the 2026 tax year. The changes include a new five-bracket progressive tax table, higher family deductions and additional deductions for eligible healthcare and education expenses.
This guide explains how personal income tax in Vietnam applies to foreign employees and what companies should consider when managing expatriate payroll.
Key takeaways
Foreign employees may be classified as either Vietnamese tax residents or non-residents.
Tax residents are generally taxed on worldwide employment income.
Non-residents are generally taxed at 20% on employment income related to work performed in Vietnam.
From the 2026 tax year, resident employment income is taxed under a five-bracket progressive tax table ranging from 5% to 35%.
The personal deduction is VND 15.5 million per month.
The deduction for each eligible dependent is VND 6.2 million per month.
Foreign tax residents ending their employment in Vietnam normally need to complete tax finalization before leaving the country.
Employers must maintain records of salary, benefits, assignment periods, tax residency and income paid outside Vietnam.
What Is Personal Income Tax in Vietnam?
Personal income tax, commonly referred to as PIT, is a tax imposed on income earned by individuals.
For foreign employees, employment income subject to Vietnam PIT may include:
Salary and wages;
Bonuses and commissions;
Cash allowances;
Employer-paid accommodation;
Benefits provided in cash or in kind;
Income paid by an overseas employer for work performed in Vietnam;
Tax paid by the employer on behalf of the employee;
Other employment-related payments and benefits.
The location of the bank account receiving the salary does not, by itself, determine whether the income is taxable in Vietnam.
A foreign employee working in Vietnam may therefore have a Vietnamese PIT obligation even if the employment contract is signed overseas and the salary is paid entirely outside Vietnam.
What Changed in Vietnam PIT in 2026?
Vietnam’s revised Personal Income Tax Law took effect on July 1, 2026. However, provisions concerning employment income of resident individuals apply from the 2026 tax year.
The most important changes for employees include:
Area | 2026 rule |
Personal deduction | VND 15.5 million per month |
Dependent deduction | VND 6.2 million per dependent per month |
Progressive tax brackets | Five brackets instead of seven |
Lowest resident tax rate | 5% |
Highest resident tax rate | 35% |
Short-term payment withholding threshold | VND 5 million per payment |
Dependent income threshold | Up to VND 3 million average per month |
Additional deductions | Certain eligible healthcare and education expenses |
The new family deductions apply from January 1, 2026. The five-bracket tax table also applies to resident employment income for the 2026 tax year.
Who Must Pay Personal Income Tax in Vietnam?
A foreign individual may have a Vietnamese PIT obligation if the individual:
Works under a Vietnamese employment contract;
Is assigned or seconded to a company in Vietnam;
Performs services or employment duties while physically present in Vietnam;
Receives salary from a foreign company for work performed in Vietnam;
Receives benefits or allowances connected with a Vietnamese assignment;
Qualifies as a Vietnamese tax resident and receives income from outside Vietnam.
The first step is to determine whether the individual is a tax resident or a non-resident.
This classification affects the scope of taxable income, the applicable tax rate and the availability of deductions.
Vietnam Tax Resident vs Non-Resident
Tax issue | Tax Resident | Non-resident |
Main residence test | Meets at least one Vietnamese tax residence condition | Does not meet the residence conditions |
Employment income subject to tax | Generally worldwide employment income | Employment income related to work performed in Vietnam |
Tax rates | Progressive rates from 5% to 35% | Flat rate of 20% |
Personal deduction | Available | Not available |
Dependent deduction | Available if conditions are satisfied | Not available |
Annual tax finalization | Generally required unless an exception applies | Generally taxed through withholding |
Foreign tax credit | May be available subject to conditions | Normally not relevant to worldwide income because tax scope is limited |
When Is a Foreigner a Tax Resident in Vietnam?
A foreign individual is generally treated as a Vietnamese tax resident if the person meets at least one of the following conditions.
1. The 183-day presence test
The individual is present in Vietnam for at least 183 days:
During a calendar year; or
During 12 consecutive months beginning from the first date of arrival in Vietnam.
Where an employee is present for fewer than 183 days in the first calendar year but reaches 183 days within the first 12 consecutive months, the first tax year may be calculated using that 12-month period.
2. The regular residence test
An individual may also be treated as a tax resident if the individual has a regular residence in Vietnam.
For a foreigner, this may include:
A permanent residence recorded on a permanent residence card;
A temporary residence registered when applying for a temporary residence card; or
Rented accommodation in Vietnam under leases with a total duration of at least 183 days in the tax year.
Accommodation rented by an employer for an employee may also be relevant to this test.
If an individual has a regular residence in Vietnam but is physically present for fewer than 183 days, the individual may need to provide evidence of tax residence in another country. Without sufficient evidence, the person may still be treated as a Vietnamese tax resident.
Vietnam’s domestic residence tests and any relevant double taxation agreement should therefore be reviewed together.
How Are Vietnamese Tax Residents Taxed?
A Vietnamese tax resident is generally subject to PIT on employment income regardless of whether the income is:
Paid inside or outside Vietnam;
Paid by a Vietnamese or foreign company;
Received in Vietnam or in an overseas bank account.
The general calculation is:
PIT payable = Taxable income after deductions × Applicable progressive rates
In practice, the calculation normally starts with employment income and benefits subject to PIT. Permitted insurance contributions, family deductions and other eligible deductions are then subtracted.
The progressive tax rates are applied separately to each portion of taxable income. The highest rate is not applied to the employee’s entire income.
Vietnam Personal Income Tax Rates for Residents in 2026
The following five-bracket table applies to taxable employment income of resident individuals for the 2026 tax year:
Bracket | Monthly taxable income | Annual taxable income | Tax rate |
1 | Up to VND 10 million | Up to VND 120 million | 5% |
2 | Over VND 10 million to VND 30 million | Over VND 120 million to VND 360 million | 10% |
3 | Over VND 30 million to VND 60 million | Over VND 360 million to VND 720 million | 20% |
4 | Over VND 60 million to VND 100 million | Over VND 720 million to VND 1.2 billion | 30% |
5 | Over VND 100 million | Over VND 1.2 billion | 35% |
These brackets apply to income remaining after permitted deductions, not directly to the employee’s gross salary.
Personal and Dependent Deductions in 2026
Personal deduction
A resident taxpayer may claim a personal deduction of:
VND 15.5 million per month
This is equivalent to VND 186 million for a complete tax year.
Dependent deduction
A resident taxpayer may claim:
VND 6.2 million per month for each eligible dependent
Potential dependents may include:
Children below the statutory age;
Children who are studying and satisfy the income conditions;
A spouse who cannot work and meets the relevant income conditions;
Parents who have reached retirement age or cannot work;
Other qualifying individuals directly supported by the taxpayer.
For dependent categories subject to an income test, average monthly income from all sources must generally not exceed VND 3 million.
The taxpayer must register the dependent and retain supporting documents. The same dependent should not be claimed by more than one taxpayer for the same period.
Insurance deductions
Resident employees may also deduct qualifying contributions, including applicable:
Compulsory social insurance;
Health insurance;
Unemployment insurance;
Professional liability insurance required for certain occupations;
Qualifying voluntary or supplementary pension insurance;
Eligible life insurance contributions within the statutory limit.
The combined deductible amount for specified supplementary pension, voluntary pension and life insurance contributions is capped at VND 3 million per month.
Healthcare and education deductions
The 2026 framework introduced deductions for certain eligible healthcare and education expenses incurred for the taxpayer or qualifying dependents.
Under Decree 253/2026/NĐ-CP, the annual limits include:
Up to VND 23 million for eligible healthcare expenses;
Up to VND 24 million for eligible education and training expenses.
The combined potential deduction is therefore up to VND 47 million per tax year.
These deductions are subject to detailed eligibility, documentation and reimbursement conditions. Employers and employees should retain valid invoices, payment records and evidence showing that the expenses were not otherwise reimbursed.
Resident PIT Calculation Example
Assume a foreign employee is a Vietnamese tax resident and has:
Monthly employment income subject to PIT: VND 60 million;
One registered dependent;
No insurance deduction included in this simplified example;
No other eligible deductions.
Step 1: Calculate income after deductions
VND 60 million– VND 15.5 million personal deduction– VND 6.2 million dependent deduction= VND 38.3 million taxable income
Step 2: Apply the progressive rates
First VND 10 million × 5% = VND 0.5 million;
Next VND 20 million × 10% = VND 2 million;
Remaining VND 8.3 million × 20% = VND 1.66 million.
Estimated monthly PIT
VND 4.16 million
This example is for illustration only. Actual PIT may differ due to insurance contributions, exempt income, employer-paid benefits, healthcare or education deductions and annual tax reconciliation.
How Are Non-Resident Foreign Employees Taxed?
A foreign employee who does not meet Vietnam’s tax residence conditions is generally treated as a non-resident.
Employment income of a non-resident relating to work performed in Vietnam is generally taxed at:
20% of taxable employment income
The rate applies regardless of where the salary is paid.
Non-residents cannot normally claim the personal deduction, dependent deductions or the progressive resident tax rates.
For example, if a non-resident receives VND 60 million of income related to work performed in Vietnam:
VND 60 million × 20% = VND 12 million PIT
If part of the salary relates to duties performed outside Vietnam, an allocation may be necessary. The allocation method should be supported by employment records, travel data, assignment documents and other evidence.
The relevant double taxation agreement should also be checked before the final tax position is determined.
Is Employer-Paid Housing Taxable?
Housing paid by an employer is generally an employment benefit that may be included in taxable income.
Where the employer pays rent on behalf of the employee, the taxable housing benefit is generally based on the actual amount paid but capped at 15% of the employee’s taxable employment income from the relevant employer, excluding the housing benefit itself and associated qualifying calculations.
This rule requires careful payroll treatment because the contractual rent and the amount included in PIT may be different.
Companies should keep:
The lease agreement;
Rent invoices;
Proof of payment;
The employee’s assignment or employment contract;
Payroll calculations showing how the 15% limitation was applied.
Other Taxable and Potentially Exempt Benefits
Benefits that may be taxable include:
Performance bonuses;
Joining and retention bonuses;
Employer-paid personal expenses;
Private club memberships;
Personal use of company assets;
Employer-paid tax under a net salary arrangement;
Insurance premiums exceeding deductible or exempt limits;
Housing, utilities and related benefits.
Certain payments may be exempt or excluded if statutory conditions are satisfied. These can include qualifying:
Relocation payments;
Home-leave travel;
School fees for an expatriate employee’s children;
Business travel expenses;
Meal benefits;
Uniform expenses;
Telephone expenses;
Severance and job-loss payments;
Night-work and overtime pay;
Payments for qualifying unused annual leave.
The revised PIT framework expanded exemptions for qualifying night-work and overtime income and certain payments for unused leave. Employers should identify these amounts separately in payroll and retain timesheets, internal policies, employment agreements and payment records.
An allowance is not automatically exempt simply because it is described as a reimbursement. The payment must satisfy the applicable legal conditions and be supported by appropriate documents.
PIT Withholding Responsibilities for Employers
Vietnamese employers and other income-paying organisations may be required to withhold PIT before paying an employee.
Resident employees with contracts of at least three months
PIT is generally withheld using the five-bracket progressive tax table.
Resident individuals without a labour contract or with a contract below three months
From July 1, 2026, a 10% withholding generally applies when each payment is VND 5 million or more.
For payments below VND 5 million, withholding may be made if requested by the individual.
Foreign employees
For foreigners coming to work in Vietnam, the payer may initially determine withholding based on the expected assignment period stated in the employment contract or assignment document:
Expected period of 183 days or more: progressive withholding may apply;
Expected period below 183 days: non-resident treatment may apply.
The final residency position should be reviewed using the employee’s actual travel and accommodation data.
If a Vietnamese company reimburses an overseas company for salary costs paid to an assigned employee, the Vietnamese company should also review whether it is responsible for withholding and remitting PIT.
The 2026 withholding rules are set out in Article 50 of Decree 253/2026/NĐ-CP.
Annual PIT Finalization
Resident individuals with employment income are generally subject to annual PIT finalization unless a statutory exception applies.
An employee may be allowed to authorize an employer to complete finalization when the employee:
Has employment income under a contract of at least three months from one employer;
Is still working for that employer at the time of finalization; and
Satisfies the conditions concerning any additional income.
An employee will generally need to finalize directly when the employee:
Receives income from multiple employers;
Receives income directly from overseas;
Has an underpayment of tax;
Wants to claim a refund or carry forward an overpayment;
Claims certain special deductions or tax reductions;
Cannot satisfy the conditions for employer authorization.
Certain additional income averaging no more than VND 15 million per month may be excluded from finalization when it has already been subject to 10% withholding and the other statutory conditions are met.
PIT Filing Deadlines
Under the 2026 tax administration framework:
Income-paying organisations generally submit annual tax finalization by the final day of the third month following the end of the tax year.
Individuals filing directly generally submit their finalization by the final day of the fourth month following the end of the calendar year.
If a filing deadline falls on a public holiday or non-working day, the practical deadline may move under the applicable administrative rules.
Foreign residents ending their employment in Vietnam are subject to a separate departure requirement.
PIT Finalization Before Leaving Vietnam
A foreign tax resident who ends an employment contract in Vietnam must generally finalize PIT before departing Vietnam.
The filing should not be left later than 45 days after the employment contract ends.
If the employee cannot complete the procedure personally, the employee may authorize another organisation or individual to complete it. However, the foreign employee remains responsible for the final PIT liability.
Before departure, the employer and employee should reconcile:
Vietnam-paid salary;
Overseas-paid salary;
Bonuses and benefits;
Housing benefits;
Tax withheld;
Dependents and deductions;
Foreign tax paid;
Arrival and departure dates;
Any amount that remains payable or refundable.
Can Foreign Tax Paid Be Credited in Vietnam?
A Vietnamese tax resident receiving foreign income may be able to claim a credit for qualifying tax paid overseas.
The credit is generally limited to the Vietnamese tax attributable to the relevant foreign income. The employee should maintain documents such as:
Foreign tax returns;
Overseas tax payment certificates;
Payslips;
Annual income statements;
Evidence of the relevant income period;
Certified translations where required.
A double taxation agreement may provide additional relief. Treaty relief is not automatic and normally requires the taxpayer to satisfy documentation and procedural requirements.
Employer Compliance Checklist
Companies employing or hosting foreign workers should complete the following steps:
Collect passport, visa, work permit and residence information.
Obtain employment, assignment and secondment documents.
Track every day the employee is physically present in Vietnam.
Identify leases or accommodation provided by the company.
Confirm salary and benefits paid both inside and outside Vietnam.
Determine the employee’s expected and actual tax residency.
Register the employee and eligible dependents for tax purposes.
Calculate and withhold PIT using the correct method.
Maintain supporting documents for exempt income and deductions.
Reconcile payroll records before annual finalization.
Review double taxation agreement eligibility where relevant.
Complete departure finalization when the foreign employee leaves Vietnam.
Common PIT Mistakes Involving Foreign Employees
Assuming overseas salary is outside Vietnam’s tax system
Salary paid overseas may still be taxable if it relates to work performed in Vietnam or if the employee is a Vietnamese tax resident.
Determining residency only from the work permit
A work permit does not determine tax residency. Physical presence, accommodation and proof of foreign residence must also be reviewed.
Failing to report employer-paid benefits
Housing, insurance, school fees, tax reimbursements and other benefits must be assessed separately.
Applying the 20% rate to every foreign employee
Nationality does not determine the PIT rate. A foreign employee may qualify as a resident and be subject to progressive rates.
Ignoring income paid by a foreign group company
Resident employees may be taxable on worldwide employment income, including payments that do not appear in the Vietnamese payroll system.
Waiting until the employee’s final working day
Departure tax finalization may require documents from several countries. The review should begin before the employee leaves Vietnam.
How VINEX Can Support Foreign Employee PIT Compliance
Managing PIT for foreign employees requires coordination between payroll, HR, accounting, immigration teams, the overseas employer and the employee.
VINEX can support companies with:
Initial tax residency assessments;
Registration of foreign employees and dependents;
Review of taxable and non-taxable compensation;
PIT calculation and withholding;
Coordination of local and overseas payroll information;
Periodic PIT declarations;
Annual PIT finalization;
Departure tax finalization;
Payroll compliance reviews;
Documentation and reporting support.
A structured process helps employers reduce underpayments, unexpected employee liabilities and inconsistencies between payroll, employment and immigration records.
Contact VINEX to discuss personal income tax and payroll compliance for foreign employees working in Vietnam.
Frequently Asked Questions
Do foreigners have to pay personal income tax in Vietnam?
Yes. A foreigner may have a Vietnamese PIT obligation when working in Vietnam or receiving employment income connected with work performed in Vietnam. A foreigner who becomes a Vietnamese tax resident may also be taxed on worldwide employment income.
What is the PIT rate for foreigners in Vietnam?
Resident foreign employees are generally taxed at progressive rates from 5% to 35%. Non-resident foreign employees are generally taxed at 20% on employment income relating to work performed in Vietnam.
How many days make a foreigner a tax resident in Vietnam?
An individual may become a tax resident when present in Vietnam for at least 183 days during a calendar year or during 12 consecutive months beginning from the first arrival date. A regular residence in Vietnam may also result in resident status.
What is the personal deduction in Vietnam in 2026?
The personal deduction for a resident taxpayer is VND 15.5 million per month, equivalent to VND 186 million for a full tax year.
What is the dependent deduction in Vietnam in 2026?
A resident taxpayer may claim VND 6.2 million per month for each eligible and properly registered dependent.
Are foreigners entitled to dependent deductions?
Foreign tax residents may claim dependent deductions if the dependent and documentation requirements are satisfied. Non-residents cannot normally claim these deductions.
Is employer-paid rent taxable in Vietnam?
Employer-paid rent is generally a taxable employment benefit. The amount included in taxable income is normally subject to a limitation equal to 15% of the relevant taxable employment income calculated before the housing benefit.
Must a foreign employee finalize PIT before leaving Vietnam?
A foreign resident ending an employment contract in Vietnam generally must complete PIT finalization before departure or authorize another organisation or individual to complete it.
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