Personal income tax after Law 109/2025: five brackets and higher deductions
Step 1 / 4·What changed from the 2026 tax period
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Learning objectives — after this module you will:
- Know what Personal Income Tax Law 109/2025/QH15 changed
- Apply the new personal and dependant deductions
- Calculate tax under the progressive scale
What changed from the 2026 tax period
Understand the scale of this tax reform.
Personal Income Tax Law No. 109/2025/QH15 brings two major changes, applying from the 2026 tax period: the progressive scale is CUT from seven brackets to FIVE, and the personal deductions are raised substantially under Resolution 110 of the National Assembly Standing Committee.
On deductions: the deduction for the taxpayer is VND 15.5 million per month (VND 186 million a year), and VND 6.2 million per month for each dependant (VND 74.4 million a year). Against the previous VND 11 million and VND 4.4 million, that is a very large increase.
On the scale: as well as cutting the number of brackets, some rates fall — bracket 2 from 15% to 10%, bracket 3 from 25% to 20%. Taken together, most employees pay significantly less than before.
What HR should do now
Update the parameters in your payroll software and in the Excel tax model. A great many companies are still running the old formula because nobody was given the job of updating it. Run a few cases and check them by hand to be sure the parameters are right before the next pay run.
Key takeaway: From the 2026 tax period: five brackets, personal deduction VND 15.5m and dependant deduction VND 6.2m per month.