Vietnam: Summary of Key Reforms to Personal Income Tax (PIT) and Social Insurance (Effective 2026)
Effective 1 January 2026, Vietnam enacts key statutory adjustments to regional minimum wages (Region I: VND 5,310,000; Region II: VND 4,730,000; Region III: VND 4,140,000; Region IV: VND 3,700,000 per month), personal income tax (PIT) family circumstance deductions (VND 15,500,000 personal; VND 6,200,000 dependent), and consolidated social insurance administration under Law No. 41/2024/QH15.
Effective 1 January 2026, the Government of Vietnam implemented comprehensive policy reforms governing employment compensation, personal income tax (PIT) relief thresholds, and mandatory social insurance contributions:
1. Adjustment of Regional Minimum Wage & Unemployment Benefits: Regional minimum wages are adjusted across all four statutory regions (Region I: VND 5,310,000/month; Region II: VND 4,730,000/month; Region III: VND 4,140,000/month; Region IV: VND 3,700,000/month), correspondingly adjusting the ceiling for statutory unemployment insurance contributions capped at 20 times the regional minimum wage.
2. Revision of PIT Family Circumstance Deductions: Under statutory revisions to the Law on Personal Income Tax, personal relief thresholds for individual taxpayers increase from VND 11,000,000 to VND 15,500,000 per month, while qualifying dependent relief increases to VND 6,200,000 per month per dependent, meaningfully optimizing net take-home remuneration for domestic and foreign employees.
3. Rationalization of PIT Progressive Tax Brackets: The individual progressive tax tariff is streamlined from 7 marginal tiers into 5 consolidated brackets (5%, 15%, 25%, 30%, and 35%), reducing administrative overhead for calculating cross-border expatriate withholdings.
4. Digital Transition for Social Insurance Documentation: In accordance with the amended Social Insurance Law (Law No. 41/2024/QH15), physical social insurance book documentation is formally transitioned to electronic authentication via the National Social Insurance digital platform (VssID), accelerating regulatory compliance.
Statutory Sources & References: National Assembly of Vietnam Law No. 41/2024/QH15 on Social Insurance; Government Decree on Regional Minimum Wages; Ministry of Finance Policy Guidance on Personal Income Tax Reforms.
Source: Open source ↗
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