Is overtime pay subject to tax?

The Personal Income Tax Law 2025, which will take effect on July 1st, clearly stipulates regulations regarding night shift and overtime pay.

Accordingly, income from night work, overtime pay, and wages for unused vacation days are exempt from personal income tax.

Regarding income from salaries and wages, the law also stipulates that, starting this year, taxpayers will be entitled to an additional personal deduction for medical and education /training expenses. The specific deduction amount will be determined by the Government in a decree guiding certain provisions of the law.

According to the Ministry of Finance 's proposal, the maximum deduction is 24 million VND/year for education and training expenses and 23 million VND/year for medical examination and treatment expenses.

From July 1st, overtime pay will be tax-exempt. (Illustrative image)

If this proposal is approved, in addition to the personal allowance of VND 15.5 million/month for the taxpayer and VND 6.2 million/month for each dependent, taxpayers with income from salaries and wages will receive an additional deduction of up to approximately VND 47 million/year for these two expenses.

The Ministry of Finance estimates that employees with one dependent only have to pay personal income tax if their income exceeds 28.6 million VND per month.

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Furthermore, the Personal Income Tax Law 2025 also stipulates many tax-exempt incomes such as: Income from the transfer, inheritance, or gifts of real estate between spouses; biological parents and their children; adoptive parents and their adopted children; father-in-law and mother-in-law and daughter-in-law; father-in-law and mother-in-law and son-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; and siblings.

Income from the transfer of housing, land use rights, and assets attached to residential land by individuals, in cases where the individual owns only one house and one plot of land in Vietnam.

Income derived from the value of land use rights granted to individuals by the State.

Income of households and individuals directly producing agricultural products, planted forests, livestock, aquaculture, and fishing products that have not been processed into other products or have only undergone basic processing...

Income from the conversion of agricultural land allocated by the State to households and individuals for production.

Income from interest on government bonds, interest on local government bonds, interest on deposits at credit institutions, and interest from life insurance contracts.

Income from remittances.

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According to CHAU ANH (VTC News)

Source: https://baoangiang.com.vn/thu-nhap-lam-them-gio-co-bi-tinh-thue-a490823.html