Quick Summary: Resident vs Non-Resident Tax Rates
Vietnam personal income tax rates expat obligations depend strictly on tax residency status defined under Circular 111/2013/TT-BTC Article 1. Tax residents are subject to progressive tax rates ranging from 5% to 35% on worldwide employment income (after mandatory social insurance and Resolution 110/2025/UBTVQH15 family circumstance deductions), whereas non-residents pay a flat 20% withholding tax solely on remuneration earned from work performed within Vietnam with zero deductions allowed under Circular 111/2013/TT-BTC and PIT Law 109/2025/QH15.
💡 Estimate your exact take-home pay: Use our interactive Vietnam Salary & PIT Calculator to simulate resident vs. non-resident tax liabilities with 2025 and 2026 statutory rates.
Tax Residency Criteria: The 183-Day Test
Your effective tax rate in Vietnam depends entirely on whether you are classified as a tax resident or a tax non-resident. Under Article 1 of Circular 111/2013/TT-BTC and PIT Law 109/2025/QH15:
You are a Tax Resident if:
- Physical Presence Test: You are present in Vietnam for 183 days or more in a calendar year (Jan 1 – Dec 31), OR within any 12 consecutive months from your date of first arrival. Both arrival and departure days count as full days.
- Regular Residence Test: You maintain a registered permanent residence, OR rent living accommodation (apartment, house, serviced apartment) with leases totaling 183 days or more in the tax year.
Resident vs Non-Resident Treatment
| Tax Parameter | Tax Resident | Tax Non-Resident | | :--- | :--- | :--- | | Taxable Scope | Worldwide employment income | Vietnam-sourced income only | | Tax Rate Structure | Progressive brackets (5% to 35%) | Flat 20% withholding | | Personal Deduction | VND 11M/mo (2025) / VND 15.5M/mo (2026) | None (VND 0) | | Dependant Deduction | VND 4.4M/mo (2025) / VND 6.2M/mo (2026) | None (VND 0) | | Annual Finalization | Mandatory if multiple employers / refund owed | None (monthly withholding is final) |
2025 Progressive Tax Brackets (7-Tier System)
For income earned during the 2025 tax year, Vietnamese tax residents are taxed under the traditional 7-bracket progressive scale:
| Bracket | Monthly Taxable Income (VND) | Annual Taxable Income (VND) | Tax Rate | Quick Calculation Formula (Monthly) | | :---: | :--- | :--- | :---: | :--- | | 1 | Up to 5,000,000 | Up to 60,000,000 | 5% | Taxable Income × 5% | | 2 | 5,000,001 – 10,000,000 | 60,000,001 – 120,000,000 | 10% | (Taxable Income × 10%) − 250,000 | | 3 | 10,000,001 – 18,000,000 | 120,000,001 – 216,000,000 | 15% | (Taxable Income × 15%) − 750,000 | | 4 | 18,000,001 – 32,000,000 | 216,000,001 – 384,000,000 | 20% | (Taxable Income × 20%) − 1,950,000 | | 5 | 32,000,001 – 52,000,000 | 384,000,001 – 624,000,000 | 25% | (Taxable Income × 25%) − 4,750,000 | | 6 | 52,000,001 – 80,000,000 | 624,000,001 – 960,000,000 | 30% | (Taxable Income × 30%) − 9,750,000 | | 7 | Over 80,000,000 | Over 960,000,000 | 35% | (Taxable Income × 35%) − 18,150,000 |
Taxable Income = Assessable Gross Income − Statutory Insurance − Personal Allowance (11M) − Dependant Allowances (4.4M each).
2026 Progressive Tax Brackets (5-Tier Scale)
Under the newly enacted Law on Personal Income Tax No. 109/2025/QH15 and Resolution 110/2025/UBTVQH15, Vietnam streamlines its tax brackets from 7 down to 5 wider tiers, substantially reducing middle-income tax drag for expatriate workers:
| Bracket | Monthly Taxable Income (VND) | Annual Taxable Income (VND) | Tax Rate | Quick Calculation Formula (Monthly) | | :---: | :--- | :--- | :---: | :--- | | 1 | Up to 10,000,000 | Up to 120,000,000 | 5% | Taxable Income × 5% | | 2 | 10,000,001 – 30,000,000 | 120,000,001 – 360,000,000 | 10% | (Taxable Income × 10%) − 500,000 | | 3 | 30,000,001 – 60,000,000 | 360,000,001 – 720,000,000 | 20% | (Taxable Income × 20%) − 3,500,000 | | 4 | 60,000,001 – 100,000,000 | 720,000,001 – 1,200,000,000 | 30% | (Taxable Income × 30%) − 9,500,000 | | 5 | Over 100,000,000 | Over 1,200,000,000 | 35% | (Taxable Income × 35%) − 14,500,000 |
Key Differences Between 2025 and 2026
* The 5% first bracket expands from VND 5M to VND 10M. * The 10% second bracket extends up to VND 30M (previously capped at VND 10M). * Combined with the new VND 15.5M personal deduction and VND 6.2M dependant deduction, an expat earning VND 60M/month sees their monthly tax cut by over 40%.
Non-Resident Flat 20% Tax Rate
If you do not meet the 183-day rule and have no qualifying long-term lease in Vietnam, you are taxed as a non-resident: * Tax Rate: Flat 20% on assessable Vietnam-sourced employment income. * Deductions: Zero deductions (no personal deduction, no dependant deduction, no insurance deductions). * Formula: $ ext{Monthly PIT} = ext{Gross Vietnam Income} imes 20%$.
Example: Non-Resident Earning VND 80,000,000
$$ ext{Tax} = 80,000,000 imes 20% = ext{VND } 16,000,000 / ext{month}$$
A resident earning that same salary with 1 dependant under 2026 rules would pay only ~VND 4,700,000/month — saving over VND 11.3M monthly!
Worked Expat Salary Calculations (40M, 80M, 150M VND)
Here is how take-home pay compares for foreign employees across different income brackets under 2026 rules (assuming 1 child dependant and compulsory insurance):
1. Mid-Level Expat (VND 40,000,000 Gross)
* Compulsory Insurance (9.5%): VND 3,800,000 * Family Deductions: 15.5M (personal) + 6.2M (dependant) = VND 21,700,000 * Taxable Income: 40M − 3.8M − 21.7M = VND 14,500,000 * PIT (2026 5-tier scale): * First 10M × 5% = 500,000 * Remaining 4.5M × 10% = 450,000 * Total Monthly PIT: VND 950,000 (Effective rate: 2.38%) * Net Take-Home Pay: VND 35,250,000
2. Senior Expat / Team Lead (VND 80,000,000 Gross)
* Compulsory Insurance (capped at 50.6M max base): VND 4,807,000 * Family Deductions: 15.5M + 6.2M = VND 21,700,000 * Taxable Income: 80M − 4.807M − 21.7M = VND 53,493,000 * PIT (2026 5-tier scale): * (53,493,000 × 20%) − 3,500,000 = VND 7,198,600 (Effective rate: 9.0%) * Net Take-Home Pay: VND 67,994,400
3. Expat Director / Executive (VND 150,000,000 Gross)
* Compulsory Insurance (capped at 50.6M max base): VND 4,807,000 * Family Deductions: 15.5M + 6.2M = VND 21,700,000 * Taxable Income: 150M − 4.807M − 21.7M = VND 123,493,000 * PIT (2026 5-tier scale): * (123,493,000 × 35%) − 14,500,000 = VND 28,722,550 (Effective rate: 19.1%) * Net Take-Home Pay: VND 116,470,450
Compulsory Insurance Deductions for Expats
Foreigners working in Vietnam under labour contracts of 12 months or longer are subject to compulsory statutory social insurance: * Social Insurance (SI / BHXH): 8% (paid by employee) * Health Insurance (HI / BHYT): 1.5% (paid by employee) * Unemployment Insurance (UI / BHTN): 0% (Foreigners are legally exempt from UI) * Statutory Contribution Cap: Contributions are capped at 20 times the statutory base salary (VND 50,600,000 cap from 1 July 2026 under Decree 161/2026/ND-CP). Any salary above this cap is exempt from social insurance withholding.
All employee compulsory insurance contributions are fully deductible from assessable gross income prior to calculating personal income tax.
Mid-Year Arrival Tax Strategy & Refunds
Expats arriving in Vietnam mid-year often have 20% flat tax withheld by payroll because they haven't yet reached 183 days of physical presence.
However, once you remain in Vietnam for 183 days (either within the calendar year or across 12 consecutive months):
- Your tax status shifts retroactively to Tax Resident for that entire tax period.
- You become entitled to retroactive progressive tax brackets and full monthly personal allowances (15.5M VND/month).
- By filing annual tax finalization on Form 02/QTT-TNCN, you can reclaim the difference between the 20% flat withholding and your lower progressive rate — frequently resulting in refunds of $1,000 to $5,000+ USD.
🚀 Need help calculating your rates or securing your mid-year arrival refund? Book our certified Vietnam PIT Finalization Service or talk directly with our bilingual tax team on Zalo: +84703027485.
Sources: Law on Personal Income Tax 109/2025/QH15, Circular 111/2013/TT-BTC, Resolution 110/2025/UBTVQH15, Decree 161/2026/ND-CP. Official legal texts available at vbpl.vn.