How will Tet bonus and 13th month salary be subject to personal income tax?

VTV.vn - As the year is almost over, besides the joy, workers are also worried about how their salaries and Tet bonuses will be subject to personal income tax (PIT).

All Tet bonuses are subject to progressive tax.

Many businesses today maintain the payment of 13th month salary, even other Lunar New Year bonuses, as a way to encourage and care for employees' lives after a year of work. The bonus can be recorded as 13th or 14th month salary, or combined as a Tet bonus, in addition to the usual 12 months of salary in the year.

According to regulations, all the above bonuses, including income from salaries, wages and other incomes of a salary or wage nature (including stock bonuses), are taxable income. These incomes must be declared and paid personal income tax according to the progressive tax schedule.

For individuals with a labor contract of 3 months or more, the organization paying the income will deduct tax based on the monthly taxable income.

"Tax jump" causes provisional tax collection to skyrocket

The most controversial issue related to tax calculation is the time of year-end bonus payment. According to regulations, the time to determine taxable income is the time when the organization or individual pays income to the taxpayer.

When a company pays a Tet bonus (such as a 13th month salary) added to December or January income, the total income for that month skyrockets and is immediately taxed at a higher rate according to the progressive tax schedule.

A practical example of tax rate increase: If an individual's normal monthly salary is 20 million VND (after personal deductions, no dependents), they will pay tax at level 2 (tax rate 10%) with the amount of 650,000 VND. However, if they receive an additional 20 million VND in 13th month salary, the total income for the month will be up to 40 million VND. At this point, the individual will be taxed up to level 4 (tax rate 20%), with the tax payable amount of 4.15 million VND. This sudden increase surprises many individuals.

Mr. Trung Tu ( Ho Chi Minh City) said that when he received his 13th month salary at the same time as his December salary, he was "shocked" because the actual amount he received was much lower. He had to pay up to the maximum tax rate of 35%. Even ordinary workers who do not have to pay taxes all year round were immediately deducted 10% when they received an additional 13th month salary of less than 8 million VND.

Withholding tax is just a "provisional collection" – but it is disadvantageous

Responding to a petition from an individual working at an FDI enterprise about this problem, the Tax Department said that current laws have provisions on income synthesis, tax calculation, deduction and personal income tax declaration and payment.

However, Lawyer Tran Xoa, Director of Minh Dang Quang Law Firm, emphasized that this high amount of tax withheld is only a provisional amount. Whether the enterprise declares monthly or quarterly, the employee will have to pay an increased tax rate when receiving a bonus, but at the end of the year, the enterprise will summarize the income and calculate the final personal income tax.

If an individual is provisionally charged more tax in a year than the actual tax payable, they will be refunded or offset against the following year's tax.

The big problem: The State collects in advance and taxpayers have to wait more than a year (for example, bonuses paid in January, until the end of the personal income tax settlement period in April of the following year) to receive the excess tax that was temporarily collected is too long. This causes disadvantages for employees, especially at the end of the year when many expenses are needed.

Faced with these shortcomings, employees have proposed that the Ministry of Finance consider allowing businesses and employees to choose to calculate the average bonus on the total annual income; or separate the bonus to apply a reasonable tax rate to avoid causing disadvantages.

Solution from experts: pay bonuses close to Lunar New Year 2026

Commenting on the timing of paying Tet bonuses, Lawyer Tran Xoa and Mr. Nguyen Ngoc Tinh, Vice President of the Ho Chi Minh City Tax Consultants and Agents Association, both said that businesses should consider paying bonuses in early 2026 to reduce the tax burden on employees.

The reason is that the new Family Income Tax Reduction (GBP) will be applied from 2026:

• The VAT level for taxpayers is increased from 11 million VND/month to 15.5 million VND/month.
• The GTGC level for each dependent increases from 4.4 million VND/month to 6.2 million VND/month.
  

Paying bonuses in January 2026 (close to Lunar New Year) will help employees benefit from the new VAT rate, reducing a significant amount of personal income tax compared to paying in December 2025.

For example, an individual with a total income (salary + bonus) of 30 million VND/month and 1 dependent, if applying the new VAT rate (from 2026), will have to pay personal income tax of 580,000 VND, a decrease of 860,000 VND compared to the current rate.

In addition, paying bonuses close to Tet is also consistent with Vietnamese customs and traditions. At the same time, accounting regulations allow businesses to pay salaries and bonuses before the deadline for submitting corporate income tax settlements, which is still accepted as accounting for operating expenses of the previous year.

Mr. Nguyen Ngoc Tinh also suggested that some businesses have implemented quarterly bonuses for employees, this is a way to average income, helping to minimize tax payments from jumping too high as when all bonuses are concentrated at the end of the year.

Source: https://vtv.vn/tien-thuong-tet-luong-thang-thu-13-se-tinh-thue-thu-nhap-ca-nhan-the-nao-100251124103347238.htm