From 2026, individuals earning less than 17 million VND per month are expected to be exempt from personal income tax, according to the latest draft amendments to the Personal Income Tax Law. The personal allowance will be adjusted upwards to accurately reflect CPI fluctuations and actual living costs. This policy aims to reduce the financial burden on employees and requires accounting and auditing departments to promptly update their payroll and tax calculation methods to ensure compliance with the new legal regulations.
The regulation stipulating that salaries below 17 million VND will be exempt from personal income tax starting in 2026 is based on an expected personal allowance of 15.5 million VND along with mandatory insurance contributions. According to tax experts at MAN – Master Accountant Network, this is a necessary policy to stimulate consumption and increase social equity. The following content will analyze the legal basis, practical examples, and policy impacts to help businesses and employees understand the specific figures.
Legal basis and context for changes to the personal allowance deduction.
The regulation stipulating that salaries below 17 million VND will be exempt from personal income tax starting in 2026 stems from adjustments to the components of taxable income. To understand why 17 million VND has become the "threshold" for tax exemption, we need to examine the relevant legal documents regarding deductions and insurance contributions.
Roadmap for amending the Personal Income Tax Law
The government and the Ministry of Finance have recognized the obsolescence of the old personal allowance (11 million VND/month) in the context of rising inflation. It is expected that in the next session, the National Assembly will consider adjusting this amount to approximately 15.5 million VND for the taxpayer themselves. This is the core premise that will make it possible for those earning less than 17 million VND to be exempt from personal income tax from 2026 onwards.
Mandatory social insurance contribution rates in 2026
According to the Social Insurance Law, the current insurance contribution rate for employees is 10.51% (81% Social Insurance, 1.51% Health Insurance, and 11% Unemployment Insurance). This rate is applied directly to the base salary or agreed-upon salary. When calculating personal income tax, these insurance contributions are considered reasonable expenses deductible before determining taxable income, reinforcing the fact that salaries below 17 million VND will not be subject to personal income tax from 2026.
Why will those earning less than 17 million VND not have to pay personal income tax from 2026?
We need to perform a precise mathematical calculation based on tax accounting principles to prove that the assertion that salaries below 17 million VND will not be subject to personal income tax from 2026 onwards is entirely scientifically sound.
Formula for determining taxable personal income.
Taxable income is determined by the formula:
|
Taxable income = Total income – Tax-exempt items – Deductions |
These deductions include personal allowances, dependent allowances, and mandatory insurance contributions. Understanding this formula explains why those earning less than 17 million VND will not be subject to personal income tax from 2026 onwards.
Detailed simulation table for a salary of 17 million VND.
Below is a detailed calculation based on the new draft to demonstrate why salaries below 17 million VND will not be subject to personal income tax from 2026.
| Target | How to calculate | Amount (VND) |
| Gross salary | Assumed salary | 17.000.000 |
| Mandatory insurance premiums (10,5%) | 17,000,000 x 10.5% | 1.785.000 |
| Personal deduction | New projected level | 15.500.000 |
| Total deductible amounts | 1.785.000 + 15.500.000 | 17.285.000 |
| Taxable income | 17.000.000 – 17.285.000 | -285,000 (Negative) |
| Amount of personal income tax payable | Taxable income ≤ 0 | 0 |
From the table above, we see that the total deductions amount to over 17.2 million VND. Therefore, the statement that employees with salaries below 17 million VND will not have to pay personal income tax from 2026 is completely accurate.
Analyzing the impact of the policy exempting those earning less than 17 million VND from personal income tax starting in 2026.
The implementation of the new tax exemption has a positive impact on both workers and businesses. From MAN's expert perspective, we highly appreciate the practicality of this regulation.
For salaried workers
For the vast majority of middle-income workers, the regulation exempting those earning less than 17 million VND from personal income tax starting in 2026 helps increase their real income (take-home pay). The tax savings are significant in covering essential daily expenses.
For businesses and accounting departments
Businesses need to update their accounting software and settlement processes to accurately reflect the policy that salaries below 17 million VND will be exempt from personal income tax starting in 2026. This will help minimize errors in withholding tax and avoid the risk of administrative penalties.
Impact on audit and post-audit procedures.
In audits conducted after 2026, auditors will focus on verifying the accuracy of the new deduction amount. If businesses do not update their regulations to include the exemption from personal income tax for salaries below 17 million VND from 2026, any over-deduction of tax will become an error requiring correction in the report.
Important notes when applying the new regulations.
Although those earning less than 17 million VND will be exempt from personal income tax from 2026, taxpayers still need to pay attention to some technical aspects to ensure compliance. Personal Income Tax Law current.
Other income besides salary
The regulation stipulating that salaries below 17 million VND are exempt from personal income tax from 2026 only applies to income from salaries and wages. Other sources of income, such as business income and real estate transfers, are still taxed according to separate tax schedules. Taxpayers need to clearly distinguish between these to avoid misunderstandings.
Documents proving dependent status
If income exceeds 17 million VND, individuals may still be exempt from tax if they have dependents. Each dependent is also expected to receive an increased deduction. However, the application must be submitted on time. The policy of exempting individuals earning less than 17 million VND from personal income tax starting in 2026 is the basic threshold for single individuals.
Comparing personal income tax rates before and after 2026.
The difference between the two phases clearly demonstrates the advantages of the new policy. We compare the salary of 17 million VND to highlight the importance of exempting those earning less than 17 million VND from personal income tax starting in 2026.
| Comparison content | Current phase (2024-2025) | Period from January 1, 2026 |
| Salary | 17,000,000 VND | 17,000,000 VND |
| Personal deduction | 11,000,000 VND | 15,500,000 VND |
| Insurance (10,5%) | 1,785,000 VND | 1,785,000 VND |
| Taxable income | 4,215,000 VND | -285,000 VND |
| Personal income tax amount/month | ~ 210,750 VND | 0 VND |
Implementing the regulation that exempts those earning less than 17 million VND from personal income tax starting in 2026 will help workers save more than 2.5 million VND per year. This is a significant amount for household income.
The role of MAN – Master Accountant Network in supporting businesses.
With a team of experienced experts, MAN always accompanies businesses in adapting to legal changes. The policy that salaries below 17 million VND will not be subject to personal income tax from 2026 is an important point that businesses need to understand.
Tax consulting and payroll optimization services
MAN provides comprehensive solutions, from salary scale development to the implementation of regulations stipulating that employees earning less than 17 million VND are exempt from personal income tax starting in 2026. We help businesses minimize legal risks and maximize benefits for their employees.
Tax audit and book review
MAN's auditing services help businesses review all payroll data before the tax settlement period. We ensure that all rules regarding salaries under 17 million VND exempt from personal income tax from 2026 are applied accurately and consistently.
Conclude
The policy of exempting those earning less than 17 million VND from personal income tax starting in 2026 is highly significant and accurately reflects the aspirations of the people. Adjusting the tax deduction to 15.5 million VND creates a solid tax shield for average income earners. For accountants and managers, understanding this regulation is a responsibility to protect the rights of employees.
If your company needs support regarding tax exemption for salaries under 17 million VND from 2026, or professional tax auditing and accounting services, please contact MAN – Master Accountant Network. We are committed to providing the highest quality solutions, helping businesses confidently develop sustainably.
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
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Frequently Asked Questions: Those earning less than 17 million VND will not have to pay personal income tax from 2026.
Is a salary of 18 million VND subject to tax?
With a salary of 18 million VND, after deducting insurance and personal allowances, the taxable income is only about 715,000 VND. The amount of tax payable is very low, about 35,750 VND/month. Thus, even if the salary exceeds the threshold of under 17 million VND, which exempts individuals from paying personal income tax from 2026, the tax burden will still be significantly reduced.
Has this regulation officially come into effect yet?
This is the roadmap in the draft amendment to the Personal Income Tax Law submitted to the National Assembly for approval. It is expected that guiding documents will be issued soon so that businesses can implement the policy of exempting salaries below 17 million VND from personal income tax starting in 2026.
Does the business need to go through any procedures?
Businesses need to update their payroll software based on notifications from the tax authorities. Understanding the regulation that salaries under 17 million VND are exempt from personal income tax from 2026 will help businesses provide better advice to employees and increase organizational engagement.
