Complete Guide to Personal Income Tax 2026: 5-Tier Tax Table and Calculation Method Everyone Should Understand

Personal income tax (PIT) is a tax that affects the wallets of nearly everyone who works, yet it's something few people truly understand how to calculate. The year 2026 marks a major change: the tax table is being simplified from 7 tiers down to 5 tiers, and family deduction levels are substantially increased — resulting in many people paying less tax, or even owing none at all. This article helps you grasp the complete picture.

Two Most Common Misconceptions

Before diving into details, let's clear up two misunderstandings:

1. "Tax is calculated on your entire salary" — Wrong. Tax is only calculated on taxable income, meaning what's left after deducting mandatory insurance and family deductions.
2. "Moving to a higher tax bracket means all your income gets taxed at the higher rate" — Wrong. This is a progressive tax by portion: each portion of income within a bracket is only taxed at that bracket's rate. A salary increase will never cause you to "lose money" due to taxes.

Fundamental Formula

> Taxable Income = Total Income − Tax-Exempt Items − Mandatory Insurance − Family Deductions > > Tax Payable = Taxable Income × Tax Rate (by tier)

Family deduction levels applicable from the 2026 tax period:

• Taxpayer: 15.5 million VND/month (186 million VND/year) — increased from 11 million VND.
• Each dependent: 6.2 million VND/month (74.4 million VND/year) — increased from 4.4 million VND.

Progressive 5-Tier Tax Table (effective from 2026)

Compared to the old 7-tier table, the new one eliminates two intermediate tiers (15% and 25%), widens the spacing between tiers, and pushes the threshold for the highest 35% tax rate from over 80 million VND to over 100 million VND — reducing the burden for the majority of workers.

At What Income Level Do You Start Paying Tax?

Thanks to the new deduction levels, the income threshold (including insurance contributions) at which you start owing tax is approximately:

• No dependents: around 17 million VND/month or more.
• With 1 dependent: around 24 million VND/month or more.
• With 2 dependents: around 31 million VND/month or more.

Below these thresholds, you likely won't owe any personal income tax on salary.

Specific Tax Calculation Example

Mr. A has an income of 40 million VND/month, pays 10.5% mandatory insurance, and has 1 dependent:

• Mandatory insurance: 40 × 10.5% = 4.2 million VND
• Total deductions: 15.5 (self) + 6.2 (1 dependent) + 4.2 (insurance) = 25.9 million VND
• Taxable income: 40 − 25.9 = 14.1 million VND
• Tax: portion up to 10 million VND × 5% = 0.5 million VND; portion 4.1 million VND (from 10–14.1) × 10% = 0.41 million VND
• Total tax ≈ 0.91 million VND/month

Notably: the effective tax rate here is only about 2.3% of total income, not 10% as many mistakenly believe — due to the progressive nature of the tax.

Simplified Formula for Quick Calculation

Instead of adding up each tier, you can use the simplified formula (where TNTT = taxable income):

• Up to 10 million VND: 5% × TNTT
• Over 10–30 million VND: 10% × TNTT − 0.5 million VND
• Over 30–60 million VND: 20% × TNTT − 3.5 million VND
• Over 60–100 million VND: 30% × TNTT − 9.5 million VND
• Over 100 million VND: 35% × TNTT − 14.5 million VND

Note: deduction levels, thresholds, and tax tiers may be adjusted through new guidance documents; please check for updated information before finalization.

Want to calculate your exact personal income tax based on your income and number of dependents? Use [Sirifin's tax calculator](/vi/calculators/tax), or ask the [AI advisor](/vi/ai-advisor) for explanations tailored to your specific situation.

Content is for informational and financial education purposes, not tax advice for specific cases.