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How to Calculate Personal Income Tax from 2026 When the Tax Rates Change?

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On December 10, 2025, the National Assembly voted to pass the amended Law on Personal Income Tax, which takes effect from July 1, 2026.

Accordingly, from July 1, 2026, the partially progressive personal income tax schedule is reduced from 7 brackets to 5 brackets, with tax rates of 5%, 15%, 25%, 30%, and 35%, and with widened intervals between the brackets, specifically as follows:

  • The first tax bracket applies a tax rate of 5%, with taxable income extended up to VND 10 million;
  • The second bracket applies a tax rate of 10% to the portion of taxable income exceeding VND 10 million up to VND 30 million;
  • The third bracket applies a tax rate of 20% to the portion of taxable income exceeding VND 30 million up to VND 60 million;
  • The fourth bracket applies a tax rate of 30% to the portion of taxable income exceeding VND 60 million up to VND 100 million;
  • The fifth bracket applies a tax rate of 35% to the portion of taxable income exceeding VND 100 million.

The comparison table of the partially progressive personal income tax schedule currently in effect and the new personal income tax schedule applicable from July 1, 2026 is as follows:

Tax Bracket

 Applicable from July 1, 2026

Currently Applicable
Taxable income per month (VND million) Tax rate Taxable income per month (VND million) Tax rate
1 Up to 10

5

  Up to 5

5
2  Over 10 to 30

10

 Over 5 to 10

10
3 Over 30 to 60

20

 Over 10 to 18

15
4  Over 60 to 100

30

 Over 18 to 32

20
5 Over 100

35

 Over 32 to 52

25
6

/

/

 Over 52 to 80

30
7

/

/

 Over 80

35

  • The tax calculation method is as follows:

    Personal income tax payable in 2026 = Taxable income × Tax rate

    To calculate the tax payable, it is necessary to determine the taxable income and the applicable tax rate:

  • Taxable income:

Taxable income = Assessable income − Deductions

Where:

Assessable income = Total income − Exempt income

Deductions = Personal deduction + Dependent deduction + Mandatory insurance contributions + Other deductions (if any)

  • Tax rate: The tax rate applicable to income from salaries and wages is determined in accordance with the following table:

Tax Bracket Taxable income per year (VND million) Taxable income per month (VND million) Tax rate (%)
1 Up to 120 Up to 10 5
2 Over 120 to 360 Over 10 to 30 10
3 Over 360 to 720 Over 30 to 60 20
4 Over 720 to 1,200 Over 60 to 100 30
5 Over 1,200 Over 100 35

  • Family circumstance deductions:

    Pursuant to Resolution No. 110/2025/UBTVQH15, from 2026, the family circumstance deductions are adjusted as follows:

    • The deduction for the taxpayer is VND 15.5 million per month (VND 186 million per year);

    • The deduction for each dependent is VND 6.2 million per month per dependent.

The content of this article is for reference purposes only, based on the legal regulations in effect at the time of writing, and does not replace legal advice for any specific case.

CÔNG TY LUẬT TNHH TAPHA

07 Nguyễn Văn Trỗi, Phường Phú Nhuận, TP.HCM

Hotline: 0972 633 633

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