📌 New personal income tax brackets from 2026: Fewer brackets – but no reduction in accounting responsibilities

Wrong Excel formula = Wrong tax = Tax finalization risk.

Tax bracket Taxable income per year
(VND million)		 Taxable income per month
( VND million)		 Tax rate (%)
1 Up to 120 Up to 10 5
2 Over 120 up to 360 Over 10 up to 30 10
3 Over 360 up to 720 Over 30 up to 60 20
4 Over 720 up to 1.200 Over 60 up to 100 30
5 Over 1,200 Over 100 35

1️⃣ Formula for calculating personal income tax by MONTH (LOGICALLY CORRECT)

With A1 = Taxable income per month, the formula below completely matches
with the new personal income tax brackets from 2026. 

=IF(A1<=10000000,A1*5%,
IF(A1<=30000000,10000000*5%+(A1-10000000)*10%,
IF(A1<=60000000,10000000*5%+20000000*10%+(A1-30000000)*20%,
IF(A1<=100000000,10000000*5%+20000000*10%+30000000*20%+(A1-60000000)*30%,
10000000*5%+20000000*10%+30000000*20%+40000000*30%+(A1-100000000)*35%))))

Applies to:

  • Income from salaries and wages
  • After deducting dependent deductions
  • Mandatory insurance contributions and tax-exempt amounts

2️⃣ COMPACT and EASY-TO-CONTROL version (recommended)

The version using the MIN() and MAX() functions helps avoid incorrect tax brackets,
particularly suitable for payroll files with multiple employees. 

=A1*5%
+MAX(0,MIN(A1-10000000,20000000))*10%
+MAX(0,MIN(A1-30000000,30000000))*20%
+MAX(0,MIN(A1-60000000,40000000))*30%
+MAX(0,A1-100000000)*35%

Key advantages:

  • No need for nested IF statements
  • Easy to review when the government changes tax brackets
  • Reduces errors when copying formulas in bulk

3️⃣ Formula for calculating personal income tax ANNUALLY (for tax finalization purposes)

Where A1 = Taxable income per year:

=A1*5%
+MAX(0,MIN(A1-120000000,240000000))*10%
+MAX(0,MIN(A1-360000000,360000000))*20%
+MAX(0,MIN(A1-720000000,480000000))*30%
+MAX(0,A1-1200000000)*35%

4️⃣ IMPORTANT NOTE – ACCOUNTANTS SHOULD PAY CLOSE ATTENTION

⚠️ The above formula ONLY applies to the TAXABLE INCOME portion.

Before applying the formula, it is necessary to correctly determine:

Taxable income = Income subject to tax
– Personal deduction
– Dependent deduction
– Mandatory Social Insurance, Health Insurance, and Unemployment Insurance
– Other tax-exempt amounts (if any)

Conclusion:

The new personal income tax schedule simplifies the tax brackets, but this does not mean accountants can be
complacent. A single incorrect Excel entry can lead to significant risks during tax finalization and tax
inspection.