Decree 253/2026/ND-CP: Key PIT Changes in Vietnam from 2026

15/07/2026

News

186

The Government has issued Decree 253/2026/ND-CP guiding the implementation of the Personal Income Tax Law, introducing significant changes that directly affect monthly payroll for both employers and employees. Below is a summary of the key changes, together with practical recommendations for businesses.

Mục lục

1. Deductible items

Changes & Impact	Effective Date	Legal Basis
Voluntary social insurance (SI) and health insurance (HI) contributions (as prescribed by law).	01/01/2026	Article 8, PIT Law No. 109/2025/QH15; Article 46, Decree 253/2026/ND-CP
Supplementary/voluntary pension insurance; life insurance with accumulated value: deductible up to VND 3,000,000/month (including the portion paid by the employer on behalf of the employee).	01/01/2026	Article 46, Decree 253/2026/ND-CP
Medical expenses of the taxpayer and dependants: up to VND 23 million/year. Education expenses of the taxpayer and dependants: up to VND 24 million/year. Conditions for application: Valid invoices and supporting documents are required; A statement of medical treatment costs is required; Treatment must take place at a healthcare facility in Vietnam; These healthcare expenses are within the scope of health insurance coverage; If already covered by another source, the taxpayer may not claim this deduction; At year-end, if employees claim these deductions, they must handle their own PIT finalization.	01/01/2026	Article 49, Decree 253/2026/ND-CP; Section 3, Article 51, Decree 253/2026/ND-CP

2. PIT-exempt income

Changes & Impact	Effective Date	Legal Basis
Overtime pay and night-shift pay in accordance with regulations on conditions and working hours under labor law. Payment for unused annual leave days paid to employees upon termination (Clause 3, Article 113 of the Labor Code). Note: any amount paid by the company above the statutory limits (over 40 overtime hours/month or 200 hours/year) will be included in taxable income and risks being disallowed as a deductible expense for CIT purposes. Companies should keep a log of time, location, and amounts paid for record-keeping.	01/01/2026	Article 26, Decree 253/2026/ND-CP; Article 3, PIT Law 109
Salary of Vietnamese seafarers working for foreign shipping lines or Vietnamese shipping lines engaged in international transport (see also the Maritime Code).	01/01/2026	Article 32, Decree 253/2026/ND-CP
Income of private enterprise owners and individual owners of single-member limited liability companies, after the company has fulfilled its CIT obligations.	01/01/2026	Article 39, Decree 253/2026/ND-CP

3. Amounts excluded from taxable income

Changes & Impact	Effective Date	Legal Basis
Severance pay, redundancy pay, and emergency hardship allowance: if paid higher than the legally prescribed amounts, they are still not included in taxable income, as long as they are specified in the company’s financial regulations, labor contracts, or collective labor agreements.	01/01/2026	Section 3.h, Article 8, Decree 253/2026/ND-CP
Support paid by the company to employees for treatment of a critical illness, for the employee or their relatives (children, spouse, biological parents, parents-in-law, adoptive parents, stepmother, or stepfather): Based on the list of critical illnesses issued by the Ministry of Health; The maximum tax-exempt support amount is equal to the actual medical expenses, net of any insurance payouts (if any).	01/01/2026	Section 4.b, Article 8, Decree 253/2026/ND-CP
Lunch/mid-shift meal allowance that the company pays employees, not exceeding VND 1,200,000/month.	01/07/2026	Section 2.g, Article 8, Decree 253/2026/ND-CP
Housing benefits provided by the employer through housing built for employee use, including related utilities (electricity, water, internet, etc.).	01/01/2026	Section 2.h, Article 8, Decree 253/2026/ND-CP

4. Other changes

Changes & Impact	Effective Date	Legal Basis
Service contracts: For individuals without business registration: their income received from the organization is subject to 10% PIT withholding. For individuals with business registration: their income is not subject to withholding and is treated as business revenue; the contractor self-declares and pays tax on this income.	01/01/2026	Article 8, Decree 253/2026/ND-CP; Article 7, PIT Law 109
Resident individuals with no labor contract or a labor contract under 3 months (including payments to employees whose labor contracts have ended): 10% PIT is withheld if the payment exceeds VND 5 million per payment.	01/01/2026	Section 2, Article 50, Decree 253/2026/ND-CP
Average casual income below VND 15 million/month during the year with 10% already withheld at source means PIT finalization is not required for this income, unless the individual wishes to do so.	01/01/2026	Section 1, Article 51, Decree 253/2026/ND-CP
The deadline for dependant registration is 31st December for all dependants; all supporting documents must be retained by the company.	01/01/2026	Section 2.a, Article 48, Decree 253/2026/ND-CP
Taxable income received by employees in foreign currency must be converted into VND using the buying exchange rate of the Commercial Bank where the employee or the company holds a bank account. If no bank account is held in Vietnam, the exchange rate of the State Bank of Vietnam at the time the income arises will be used.	01/01/2026	Article 17, Decree 253/2026/ND-CP
Cases where PIT has already been declared and paid for 2026 from January through 30 June 2026 do not require an amended tax return; adjustments will simply be made in the 2026 annual tax finalization.	—	Article 70, Decree 253/2026/ND-CP

5. Recommendations for clients

Review salary, bonus, and allowance policies: compare meal allowances and overtime/night-shift policies against the new PIT exempt thresholds to avoid unexpected tax liabilities.
Update internal regulations: add or revise financial regulations, compensation policies, labor contracts, and collective labor agreements — particularly severance, job-loss, and emergency hardship allowance levels — to qualify for tax exemption on amounts paid above the statutory level.
Prepare records and documentation: retain supporting records such as timesheets, payroll records, and dependent registration files; notify and guide employees to keep medical and education invoices/receipts to support deductions and PIT finalization.
Review the dependant list: deregister any dependents (especially “other individual” dependents) who no longer meet the conditions under the new regulations.
Review service contracts and collaborator agreements: correctly determine the 10% withholding obligation based on the business registration status of each partner or service provider.
Internal communication: promptly inform employees of changes that directly affect their take-home pay and personal tax obligations.

6. How HR2B will support you

Ongoing updates: we will monitor and promptly update you on detailed guiding documents (circulars, official letters) as soon as they are issued.
Direct advisory support: we will provide advice on specific situations that arise at your company.
Policy review & optimization: we will review payroll and update relevant changes for each client to ensure full compliance — taxable items, non-taxable items, exemptions, deductions, tax rates, and dependants.

Above are the key changes introduced by Decree 253/2026/ND-CP. Please leave your information on HR2B’s official contact page so our experienced team can provide specific advice for your company’s situation.

Decree 253/2026/ND-CP introduces important changes to deductible items, PIT-exempt income, and tax finalization obligations that directly affect monthly payroll. With over 20 years of experience in payroll services and HR consulting, HR2B is ready to help your business stay fully compliant with the new regulations. Contact HR2B today for detailed guidance.