📌 LIST OF 23 ALLOWANCES:
WHICH ITEMS ARE SUBJECT TO PERSONAL INCOME TAX?
WHICH ITEMS ARE SUBJECT TO SOCIAL INSURANCE CONTRIBUTIONS IN 2026?
A practical summary to help enterprises properly review their salary and allowance structures, while minimizing the risk of tax and social insurance arrears.
From 2026 onwards, many enterprises may still be confused about:
- 👉 Which items are subject to Personal Income Tax (PIT)?
- 👉 Which items are subject to Social Insurance contributions?
- 👉 Which items are fully exempt?
Failure to update and apply the regulations correctly may easily lead to:
- ❌ Incorrect payroll record
- ❌ Incorrect Social Insurance records
- ❌ Incorrect PIT finalization
- ❌ Tax and Social Insurance arrears, penalties, and sanctions during inspections
Allowances Exempt from Both PIT and Social Insurance Contributions
- ✔ Business trip allowances
- ✔ Support for weddings, funerals, and other compassionate cases
- ✔ Severance and job-loss allowances
- ✔ Phone allowances
- ✔ Mid-shift meal allowances (draft threshold: approximately VND 1.2 million)
- ✔ Overtime pay
- ✔ Uniform allowances within the prescribed limit
👉 Key requirements:
Enterprises should have proper financial regulations, salary and bonus policies, and complete supporting documents to substantiate these payments.
The most error-prone group for enterprises
- ⚠️ Hazardous and strenuous work allowances
- ⚠️ Regional allowance
- ⚠️ Attraction allowance
👉 Although these allowances may be exempt from Personal Income Tax (PIT), they are still subject to Social Insurance contributions under current regulations.
Common support payments in enterprises
- ✔ Bonuses
- ✔ Attendance allowance
- ✔ Housing support
- ✔ Fuel and transportation support
- ✔ Childcare support
- ✔ Nursery/kindergarten support
- ✔ Innovation and improvement rewards
👉 These payments are generally subject to Personal Income Tax (PIT), but may not be subject to Social Insurance contributions if they are properly stipulated in the company’s internal policies and supported by sufficient documentation.
Items that are almost certainly subject to both PIT and Social Insurance contributions
- ❌ Salary
- ❌ Position allowance
- ❌ Responsibility allowance
- ❌ Seniority allowance
- ❌ Travel allowance
👉 If these payments are made on a fixed monthly basis and stated in the labor contract, it is generally difficult to exclude them from the Social Insurance contribution base.
🔥 Notable Updates from 2026 Onwards
- ✔ Overtime pay, night-shift pay, and salary for unused annual leave are fully exempt from Personal Income Tax (PIT) for resident individuals.
-
✔ New family circumstance deduction levels:
• Taxpayer: 15.5 million VND/month
• Dependent: 6.2 million VND/month/person -
✔ PIT rate applicable to non-resident individuals:
20% on total income from salaries and wages
⚠️ Extremely Important Note
Even for the same “phone allowance”:
- ❌ Some enterprises may have it accepted as a valid expense
- ❌ Some enterprises may have it disallowed upon inspection
The difference does not lie in the name of the payment, but in:
- 📂 Documents
- 📜 Internal policies
- 📑 Contract terms
- 🧾 Evidence proving the nature and purpose of the expense
👉 Enterprises should review their entire salary structure, allowances, and internal documentation from now on to minimize tax and Social Insurance risks.
- 📌 NEW PIT BRACKETS FROM 2026: FEWER BRACKETS – BUT NO REDUCTION IN ACCOUNTING RESPONSIBILITIES
- OFFICIAL: SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) ARE EXEMPT FROM CORPORATE INCOME TAX FOR THE FIRST 3 YEARS
- 🚨 OFFICIAL LETTER 5487/CT-CS (25/11/2025): LATE PAYMENT STILL ELIGIBLE FOR VAT CREDIT – IF PAID BY NON-CASH METHOD!
- 🚨 OFFICIAL UPDATE – Effective from 01/01/2026: Personal Deductions Increase to VND 15.5 Million/Month
- 📢 SUGAR-CONTAINING SOFT DRINKS: SUBJECT TO SPECIAL CONSUMPTION TAX → NOT ELIGIBLE FOR 8% VAT REDUCTION
