Payroll taxes 2024 from salaries and wages
Are you an employee and need to learn about how to calculate personal income tax from salary and wages? Below are the most detailed instructions. Let’s follow along with S4B Vietnam.
Personal income tax from salaries and wages is divided into 2 different subjects, including:
– Resident individuals.
– Non-resident individuals.
In particular, resident individuals are divided into 02 cases, which are individuals who sign labor contracts of 3 months or more and individuals who do not sign labor contracts or sign labor contracts of less than 03 months. For each subject and each of the above cases, there is a different way to calculate personal income tax, and in particular, only resident individuals can calculate family deductions.
1. For resident individuals
1.1. What is a resident individual?
Resident individuals are individuals in the following cases:
– Have a permanent residence in Vietnam in 01 of 02 cases:
- Case 1: Having a rented house to live in Vietnam according to the provisions of housing law, with the term of the lease contract being 183 days or more in the tax year.
- Case 2: Have a permanent residence according to the law on residence.
– Being present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day of presence in Vietnam, in which the arrival date and departure date are counted as 01 day.
Payroll Tax Rates (2024 Guide)
1.2. Calculate personal income tax for resident individuals
Taxable income = Taxable income – Deductions [1]
Based on the tax calculation formula above, to calculate taxable income, you need to follow these steps:
- Step 1: Calculate total income
- Step 2: Calculate tax-exempt income (if any)
Tax-free income 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 [2]
- Step 4: Calculate deductions
– Family deduction for the taxpayer 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 [1]
After calculating the taxable income, to determine the tax amount payable, the taxpayer applies the partial progressive method or the shortened tax calculation method (presented in the following section).
1.3. How much salary must be taxed?
Individuals without dependents must pay income tax when their total income from salaries and wages is over 11 million VND/month (this income is minus mandatory insurance payments according to regulations and other payments). other contributions such as charity, humanitarian,…).
What is the minimum income needed to file taxes in 2024?
>>>Reputable payroll service company in Vietnam
2. Non-resident individuals
2.1. What is a non-resident individual?
Foreigners who do not meet the conditions of a resident individual are determined to be a non-resident individual.
2.2. How much salary must be taxed?
Non-resident individuals are not eligible for family deductions, so as long as they have taxable income, they must pay income tax (taxable income > 0 must pay tax).
In other words, as long as there is income from salary, wages will be subject to tax at the tax rate of 20%/taxable income; In case of charitable contributions, study promotion, humanitarian contributions, insurance contributions, and voluntary pension funds according to regulations, this amount can be deducted.
2.3. How to calculate income tax for non-resident individuals
Clause 1, Article 18 of Circular 111/2013/TT-BTC stipulates that the income tax amount for non-resident individuals is calculated according to the following formula:
Personal income tax payable = 20% x Taxable income
3.3. Do I have to pay personal income tax on probation?
I signed a probationary contract at an information technology company with a salary of 15 million VND/month, so do I have to pay personal income tax? I’m single and have no dependents – Minh Hung (Hanoi)
According to Circular 111/2013/TT-BTC, if an employee signs a probationary contract with a total income of 02 million VND/time or more, the enterprise will deduct tax at the rate of 10% of the pre-employment income paid to workers.
Above is the summary of how to calculate personal income tax introduced by S4B Vietnam. If readers have any questions about related regulations, please contact + 84 24 3974 4181 for the fastest support.
S4B Vietnam
- Address: Unit 602A, Tower A, Handi Resco Office Building. 521 Kim Ma Street, Ba Dinh District, Hanoi
- Tel: + 84 24 3974 4181
- Email: service@s4b.com.vn
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