New 2026 Personal Allowance: What Salary Requires Personal Income Tax Filing?

This English version is translated from the Vietnamese original. In case of any discrepancy, the Vietnamese version prevails.

The question "new family tax deduction: at what salary must personal income tax be paid" has become urgent for millions of workers and businesses since Resolution 110/2025/UBTVQH15 on adjusting the family tax deduction rates for personal income tax took effect on 01/01/2026. The deduction levels have increased significantly, resulting in changes to the taxable income threshold — a matter that accounting, human resources personnel, and business owners must update immediately to calculate payroll and tax withholding accurately during the 2026 tax period.

New family tax deduction levels effective from 01/01/2026

According to Resolution 110/2025/UBTVQH15, effective from 01/01/2026 and applicable to the 2026 personal income tax period, the family tax deduction levels are defined as follows:

• Deduction amount for the taxpayer (the worker themselves): 15.5 million VND/month (equivalent to 186 million VND/year)
• Deduction amount for each dependent: 6.2 million VND/month

This is an adjustment of the family tax deduction levels implemented in accordance with the mechanism prescribed by personal income tax law: based on fluctuations in prices and income, the Government submits to the Standing Committee of the National Assembly the definition of family tax deduction levels appropriate to the economic and social situation in each period (Clause 2, Article 10, Personal Income Tax Law No. 109/2025/QH15).

Comparison of family tax deduction levels before and after 01/01/2026

To clearly see the changes, the table below compares the family tax deduction levels by period according to the corresponding legal documents:

Criteria	Before 01/01/2026	From 01/01/2026 (Resolution 110/2025/UBTVQH15)
Personal deduction	11 million VND/month (132 million/year)	15.5 million VND/month (186 million/year)
Deduction for each dependent	4.4 million VND/month	6.2 million VND/month
Legal basis	Resolution 954/2020/UBTVQH14 (expired)	Resolution 110/2025/UBTVQH15

Note: Resolution 954/2020/UBTVQH14 expired effective 01/01/2026 and is no longer applicable for the 2026 tax period and onwards.

New family tax deduction: at what salary must personal income tax be paid?

In principle, personal income tax only arises when taxable income is positive — that is, taxable income after deducting family tax deductions and other allowable deductions (social insurance, health insurance, unemployment insurance, etc.) remains greater than zero. According to the provisions of Decree 253/2026/NĐ-CP providing detailed regulations and guidance on implementation of the Personal Income Tax Law, resident individuals with income from wages and salaries may deduct from taxable income the family tax deduction including: the deduction for the taxpayer themselves and the deduction for each validly registered dependent (Article 47, Decree 253/2026/NĐ-CP).

Assuming a worker pays mandatory insurance at the standard rate (roughly estimated at 10.5% of insurable wages), the gross income threshold below which no personal income tax arises in common scenarios is estimated as follows:

• No dependents: The taxable income threshold after personal deduction is 15.5 million VND/month. When adding the mandatory insurance contribution portion, total gross income of approximately over 17 million VND/month begins to incur personal income tax (the exact figure depends on the specific insurance contribution salary of each worker).
• One dependent: Total deduction = 15.5 + 6.2 = 21.7 million VND/month. Gross income must exceed this threshold (plus insurance) to incur tax.
• Two dependents: Total deduction = 15.5 + 6.2 × 2 = 27.9 million VND/month.
• Three dependents: Total deduction = 15.5 + 6.2 × 3 = 34.1 million VND/month.

Note: the gross income thresholds mentioned above are illustrative only. Actual insurance rates depend on the insurance contribution salary of each worker; enterprises and accountants must calculate precisely according to each specific employment contract.

Examples of personal income tax calculation under the new deduction levels

Example 1: Worker with no dependents

Mr. A has income of 30 million VND, pays mandatory insurance (social insurance + health insurance + unemployment insurance) totaling 3.15 million VND/month. Mr. A has no dependents.

• Taxable income = 30 – 3.15 = 26.85 million VND
• Personal deduction = 15.5 million VND
• Taxable income for tax purposes = 26.85 – 15.5 = 11.35 million VND
• Personal income tax payable (progressive tax brackets with 5 levels, Clause 2, Article 9, Personal Income Tax Law No. 109/2025/QH15) = 10 million × 5% + 1.35 million × 10% = 500,000 + 135,000 = 635,000 VND/month

Example 2: Worker with 2 dependents

Ms. B has income of 40 million VND, pays mandatory insurance of 4.2 million VND/month, and has 2 children in secondary school (qualifying as dependents under Article 47, Decree 253/2026/NĐ-CP).

• Taxable income = 40 – 4.2 = 35.8 million VND
• Personal deduction = 15.5 million VND
• Deduction for 2 dependents = 6.2 × 2 = 12.4 million VND
• Taxable income for tax purposes = 35.8 – 15.5 – 12.4 = 7.9 million VND
• Personal income tax payable = 7.9 million × 5% (entirely within the 1st bracket, up to 10 million VND/month) = 395,000 VND/month

From the 2026 tax period, income from wages and salaries applies the progressive tax brackets with 5 levels under Clause 2, Article 9, Personal Income Tax Law No. 109/2025/QH15: up to 10 million VND/month 5%; over 10 to 30 million 10%; over 30 to 60 million 20%; over 60 to 100 million 30%; over 100 million 35%. The examples above assume insurable wages equal actual wages received and the employee insurance contribution rate is 10.5%; actual figures may vary depending on the contract.

Categories and conditions for determining dependents

The 6.2 million VND/month deduction for each dependent applies only when the taxpayer has validly registered such dependent. According to Articles 47 and 48, Decree 253/2026/NĐ-CP, individuals recognized as dependents include:

• Children under 18 years old (biological children, adopted children as prescribed by law, spouse's children from previous relationships, or partner's children from previous relationships);
• Children 18 years old or older who lack civil legal capacity, are disabled, or lack working ability;
• Children attending university, college, vocational secondary school, or vocational training (including children 18 years old or older attending secondary school, including the waiting period for exam results from June to September of grade 12), with no income or average monthly income in the year not exceeding the level prescribed by the Minister of Finance;
• Spouse; biological father, biological mother, stepfather, stepmother, adoptive father, adoptive mother, father-in-law, mother-in-law (or father-in-law, mother-in-law);
• Other individuals without a place of residence whom the taxpayer must directly support (biological siblings; grandparents; aunts, uncles, cousins by blood; nieces, nephews, etc.) living with the taxpayer and meeting requirements regarding income and working ability as prescribed.

"The taxpayer self-registers the number of dependents together with legal documents and bears sole responsibility before the law for the accuracy of the registration and income of the dependents." — Clause 5, Article 47, Decree 253/2026/NĐ-CP

Principles for applying family tax deductions that enterprises must note

According to Article 48, Decree 253/2026/NĐ-CP, the accounting/human resources department must understand the following important principles when withholding personal income tax from workers' wages:

• Each dependent may only be claimed as a deduction by one taxpayer in the same tax year. Where multiple persons jointly support one dependent, the parties must reach an agreement and register such dependent with only one person.
• Workers with multiple income sources may only claim the personal deduction at one income-paying location at one time.
• If the deduction has not been fully applied for 12 months during the year (due to recent employment, late registration, etc.), the worker may claim the full 12-month deduction when settling tax at year-end.
• Deadline for registering dependents: before December 31st of the tax year; supporting documents submitted as per guidelines from the Minister of Finance.
• When there are changes in dependents or agreement among taxpayers, such changes only apply to the following tax period.

Enterprise responsibility in withholding personal income tax

Enterprises as income-paying organizations are responsible for declaring, withholding, paying tax to the state budget, and settling personal income tax for taxable income payments to workers according to personal income tax law provisions.

Enterprises are also responsible for providing information on income and dependents of workers under their management as required by law. Incorrectly applying family tax deduction levels — whether due to oversight or failure to update new regulations — may result in under-reporting or over-reporting tax, creating obligations for supplementary payment and administrative penalties.

From the 2026 tax period, enterprises must update payroll software, tax withholding systems, and dependent registration forms in accordance with the rates prescribed in Resolution 110/2025/UBTVQH15 and detailed guidance in Decree 253/2026/NĐ-CP.

A&D Law Firm assists enterprises in complying with personal income tax

Properly updating and applying family tax deduction levels not only affects workers' rights but also represents the enterprise's tax law compliance obligation. The team of lawyers and consultants at A&D Law Firm is ready to assist enterprises in reviewing personal income tax withholding procedures, providing advice on correctly identifying dependent categories, building payroll systems compliant with tax law, and supporting year-end personal income tax settlement. Contact A&D Law Firm for direct consultation on enterprise tax law matters.

This article is provided for general legal information reference purposes and does not replace professional legal advice for specific circumstances. Legal regulations may change; for accurate advice appropriate to your business or personal situation, please contact a specialized lawyer for assistance.