Source: Internet

If December 2025 salary is paid in January 2026, which personal tax relief level applies?

Consulted by Lawyer Nguyen Thuy Han

Legal Specialist Nguyen Thi My Quyen

The article below clarifies which tax relief level applies when December 2025 salary is paid in January 2026.

Which tax relief level applies to Dec 2025 salary paid in Jan 2026? (Image from Internet)

Which Personal Tax Relief Level Applies to Dec 2025 Salaries Paid in Jan 2026?

According to clarifications from the Ministry of Finance at the 2025 Dialogue Conference between the Ministry of Finance and taxpayers regarding tax and customs policies and procedures:

- Based on Clause 3, Article 8 of the Law on Personal Income Tax passed by the National Assembly on December 10, 2025:

Article 8. Personal Income Tax on Salaries and Wages

...

3. The timing for determining taxable income from salaries and wages is the time when the organization or individual pays the income to the taxpayer or the time when the taxpayer receives the income.

- Based on Article 2 of Resolution 110/2025/UBTVQH15:

Article 2. Implementation Effect

1. This Resolution takes effect from January 1, 2026, and applies from the 2026 tax year.

2. Resolution No. 954/2020/UBTVQH14 dated June 2, 2020, regarding adjustments to personal tax relief levels for PIT expires as of the date this Resolution takes effect.

According to the above regulations, salary payments made from January 1, 2026, onwards (including December 2025 salary paid in January 2026) will be included in the 2026 taxable income and apply the new personal tax relief levels according to Resolution 110/2025/UBTVQH15.

Thus, based on the above grounds, salaries paid from January 1, 2026, onwards (including December 2025 salary paid in January 2026) will be counted as 2026 taxable income and be subject to the new personal tax relief levels under Resolution 110/2025/UBTVQH15.

Salary Threshold Subject to PIT in 2026 with Increased Relief Levels

According to regulations in Section 1, after subtracting deductions and tax-exempt income, if the total income from salaries and wages exceeds 15.5 million VND/month (186 million VND/year), personal income tax must be paid for 2026.

Specifically, per Article 21 of the 2007 Law on Personal Income Tax (amended in 2012, 2014), taxable income from salaries and wages is the total taxable income minus contributions for social insurance, health insurance, unemployment insurance, professional liability insurance for certain sectors, voluntary pension funds, and other deductions.

Based on the 2007 PIT Law and Articles 7 and 9 of Circular 111/2013/TT-BTC, the PIT payable is calculated as follows:

PIT Payable = Taxable Income x Tax Rate

Accordingly, to calculate the tax amount, one must determine the taxable income and the tax rate:

- Taxable Income:

Taxable Income = Taxable Total Income - Deductions

Where:

- Tax Rates:

Example: Ms. C has a monthly salary of 40 million VND and pays 10.5% in insurance. Ms. C has 1 dependent. The temporary monthly PIT for Ms. C is calculated as follows:

- Ms. C's taxable total income is 40 million VND.

- Ms. C is eligible for the following deductions:

+ Self-relief: 15.5 million VND

+ Relief for 01 dependent: 6.2 million VND

+ Insurance:

40 million VND × 10.5% = 4.2 million VND

- Total deductions:

15.5 million VND + 6.2 million VND + 4.2 million VND = 25.9 million VND

- Ms. C's taxable income is:

40 million VND - 25.9 million VND = 14.1 million VND

- Tax amount payable:

Method 1: Tax payable per each bracket of the progressive tax scale:

+ Bracket 1: taxable income up to 5 million VND, 5% rate:

5 million VND × 5% = 0.25 million VND

+ Bracket 2: taxable income over 5 to 10 million VND, 10% rate:

(10 million VND - 5 million VND) × 10% = 0.5 million VND

+ Bracket 3: taxable income over 10 to 18 million VND, 15% rate:

(14.1 million VND - 10 million VND) × 15% = 0.615 million VND

- Total monthly temporary tax for Ms. C is:

0.25 million VND + 0.5 million VND + 0.615 million VND = 1.365 million VND

Method 2: Tax payable using the simplified method:

A monthly taxable income of 14.1 million VND falls into Bracket 3. The PIT payable is:

14.1 million VND × 15% - 0.75 million VND = 1.365 million VND