Family deductions will officially increase to VND15.5 million/month for taxpayers and VND6.2 million/month for each dependent from 2026. This is one of the most important mechanisms in calculating personal income tax (PIT) in Vietnam, approved by the National Assembly Standing Committee at the 50th Session on October 17, 2025, to adjust tax policies in line with living costs, average income and ensure fairness in tax obligations.
This increase not only helps workers and households reduce the tax burden but also has a positive impact on spending, consumption and economic development. This article will analyze in detail the new family deduction, beneficiaries, how to calculate personal income tax, and important notes when applying.
Update new family deduction level: 15.5 million VND/month and 6.2 million VND/month for dependents
According to Resolution of the National Assembly Standing Committee, the family deduction will be adjusted significantly, helping taxpayers and households better match current living costs. The new family deduction will apply from the 2026 tax period, that is, in the final settlement personal income tax In 2026 (paid in early 2027), taxpayers and businesses will base on the new rate to determine the amount of tax payable. Compared to the old rate, family deductions increased by nearly 41%, accurately reflecting the increase in living expenses and average income of people.
| Object | Old deduction level (million VND/month) | New deduction level (million VND/month) | New deduction level (million VND/year) |
| Taxpayers | 11 | 15,5 | 186 |
| Each dependent | 4,4 | 6,2 | 74,4 |
Why is it necessary to adjust family deductions? Socio-economic context
The family deduction level has been adjusted to respond to socio-economic changes in recent years:
- Rising cost of living: CPI has been increasing steadily over the years, especially in big cities with sharp increases in housing, healthcare, education and living costs.
- Average income per capita increased: From 2020 to now, average income has increased by about 40%, creating a difference between the current family deduction level and real life.
- Ensuring tax fairness: The old family allowance is no longer enough to support workers, especially those with many dependents.
- Proposal of the Ministry of Finance and the National Assembly: Two options were presented: adjustment according to CPI (~21%) or according to income/GDP (~40%). The National Assembly Standing Committee chose the option according to income/GDP, raising the family deduction to 15.5 million/month.
Increasing the family deduction level is appropriate to the economic context, helping to maintain purchasing power, reduce financial pressure on workers, and at the same time stabilize tax policy.
Who benefits from increased family deductions?
The increase in family deductions directly benefits the following groups:
- Middle-income workers: With a family deduction of 15.5 million/month, many people earning around 17 million/month or less will no longer have to pay personal income tax.
- People with dependents: The level of 6.2 million/month for each dependent helps households with small children or the elderly significantly reduce the amount of tax payable.
- Young workers in big cities: With high living costs, the new family deduction helps increase disposable income and reduce spending pressure.
| Case | Income | Number of dependents | Personal income tax before deduction | New personal income tax after deduction |
| No dependents | 17 million | 0 | 720.000 | 0 |
| 1 dependent | 24 million | 1 | 2.520.000 | 360.000 |
| 2 dependents | 31 million | 2 | 5.040.000 | 600.000 |
The impact on the budget and economy of adjusting family deductions
Although raising family deductions reduces the estimated budget revenue by about 21,000 billion VND/year, this policy brings many economic benefits:
- Increased consumer spending: Workers retain more of their income, boosting consumption of goods and services.
- Business support: When employees are less financially pressured, labor efficiency increases, reducing the risk of unpaid wages or tax penalties.
- Macroeconomic stability: Fair and appropriate tax policies help maintain social stability and sustainable growth.
Instructions on how to calculate personal income tax and apply new family deductions
To accurately calculate personal income tax (PIT), taxpayers need to note the following basic formula:
|
Personal income tax = (Total taxable income – Social insurance/Health insurance/family deduction – dependent deduction) × Tax rate |
In there:
- Personal deduction: 15.5 million VND/month from 2026.
- Dependent deduction: 6.2 million VND/month for each dependent.
- Tax rate: according to progressive tax schedule from 5% to 35%.
Illustrative example of how to calculate personal income tax and apply the new family deduction level
To help taxpayers better understand the impact of the new family deduction, below are some examples illustrating how to calculate personal income tax in common cases. Through these examples, you will clearly see how to apply the deduction of VND 15.5 million/month for yourself and VND 6.2 million/month for each dependent in calculating taxable income and personal income tax payable.
These examples include both cases where a taxpayer has 1 dependent and 2 dependents, thereby helping employees and businesses easily visualize and correctly apply the new regulations, while optimizing tax benefits.
Example 1: Taxpayer has 1 dependent
Suppose a person has a monthly income of 25 million VND and has one dependent. According to regulations, the family deduction for the individual is 15.5 million VND/month, while the deduction for the dependent is 6.2 million VND/month.
| Clause | Deduction level (million VND/month) |
| Self | 15,5 |
| Dependents | 6,2 |
Calculation of taxable income:
|
Taxable income = 25 – 15.5 – 6.2 = 3.3 million VND |
Calculate personal income tax according to progressive tax table 10%:
|
Personal income tax = 3.3 x 10% = 310,000 VND/month |
Example 2: Taxpayer has 2 dependents
Suppose a person has a monthly income of 31 million VND and has 2 dependents. According to the regulations, the family deduction for the individual is 15.5 million VND/month, while the deduction for the two dependents is 12.4 million VND/month (6.2 million × 2). When applying these deductions, taxable income will be calculated by subtracting the deductions from the total income.
| Clause | Deduction level (million VND/month) |
| Self | 15,5 |
| Dependents | 12,4 |
Formula for calculating taxable income:
|
Taxable income = 31 – 15.5 – 12.4 = 3.1 million VND |
Formula for calculating personal income tax according to progressive tax table 10%:
|
Personal income tax = 3.1 – 10% = 310,000 VND/month |
Important notes when applying the new family deduction level
When applying the new family deduction level to calculate personal income tax, taxpayers and businesses need to pay attention to some important points to ensure accuracy, completeness and avoid errors. Understanding the instructions on declaring dependents, updating payroll, accurately determining taxable income and correctly applying the progressive tax table will help optimize tax reduction benefits, while fully complying with current legal regulations. Below are detailed notes, presented visually in a table for readers to easily follow and apply.
| Note | Detailed content |
| Declare dependents | Taxpayers need to accurately and validly register dependents with the tax authorities to be eligible for deductions. |
| Software and payroll updates | Businesses need to edit their payroll systems, accounting software, and tax spreadsheets to reflect the new family deduction. |
| Determining taxable income | Only calculate taxable income according to regulations, except for non-taxable items such as subsidies and incentive bonuses according to regulations. |
| Apply progressive tax schedule | Personal income tax applies a 7-step tax schedule from 5% to 35%. It is necessary to calculate the correct tax rate for each step based on taxable income after deductions. |
| Check and save records | Keep complete records of deductions, contracts, and documents of dependents to serve tax audits or settlements. |
Conclude
Family deduction is one of the important tools to help taxpayers optimize their personal income tax obligations, reduce financial burden and ensure fairness in the tax system. Increasing the deduction to VND 15.5 million/month for the individual and VND 6.2 million/month for each dependent from 2026 accurately reflects the increase in living costs and average income, while supporting employees to retain more income.
Applying the new family deduction requires taxpayers and businesses to have a firm grasp of how to calculate personal income tax, accurately declare dependents, and update appropriate software and payroll. Compliance with these guidelines not only helps optimize benefits but also reduces the risk of tax errors, ensuring businesses and individuals comply with the law.
For detailed advice on tax accounting, auditing and tax consulting, you can contact MAN – Master Accountant NetworkWith a team of experienced experts, MAN will support you in calculating accurately, declaring taxes effectively and optimizing benefits from the new family deduction level, helping you to confidently manage taxes and business finances.
Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
