, how much income must be paid in personal income tax?

Pursuant to Article 7 of Circular 111/2013/TT-BTC, personal income tax for resident individuals with income from salaries and wages is calculated as follows:

Personal income tax payable = Taxable income x Tax rate (1)

In which:

Taxable income = Personal income taxable income – Deductions (2)

Personal income taxable income = Total income – Tax-exempt income (3)

Based on the above formulas, individuals only have to pay tax when they have taxable income (taxable income > 0). To determine exactly whether or not you have to pay tax and how much to pay, people with income from salaries and wages calculate sequentially by following these steps:

Step 1: Calculate total income

Step 2: Calculate income exempt from personal income tax (if any)

Income exempt from personal income tax from salaries and wages includes:

– The salary for night work and overtime work is paid higher than the salary for daytime work or during working hours according to the law.

– Income from salaries and wages of Vietnamese seafarers working for foreign shipping companies or Vietnamese shipping companies that transport internationally.

Step 3: Calculate taxable income according to formula (3)

Step 4: Calculate deductions

– Family deduction for taxpayers is 11 million VND/month (132 million VND/year).

– Family deduction for each dependent is 4.4 million VND/month.

In addition, taxpayers are also entitled to deductions for insurance contributions, voluntary pension funds, charitable contributions, educational promotion, and humanitarian contributions.

Step 5: Calculate taxable income according to formula (2)

Step 6: Calculate the amount of personal income tax payable according to formula (1)

In short, for individuals without dependents, must pay personal income tax when their total income from salaries and wages is over 11 million VND/month (This income excludes mandatory insurance contributions and other contributions such as charity, humanitarian, etc.).

Some common income levels subject to personal income tax

Note: The income below is income from salaries and wages minus the following amounts:

– Insurance contributions, voluntary pension funds, charitable contributions, study promotion, and humanitarian contributions.

– Income is exempt from personal income tax.

– Amounts not subject to personal income tax such as some allowances, allowances, lunch money, etc.