The progressive personal income tax rate applies to income from salaries and wages with 7 tax brackets from 5% to 35%. Understanding how to calculate progressive personal income tax, knowing the taxable income levels, deductions, and methods of monthly or annual declaration will help employees proactively declare their taxes and avoid incorrect or underpayment.
What is the progressive personal income tax rate? Who does it apply to?
The progressive personal income tax rate is a tax calculation method based on the principle that the higher the income, the higher the tax rate, aiming to ensure fairness in budget contributions. This is the most common form of tax calculation, applied to income from salaries and wages – the type of income that accounts for the majority of workers.
According to Personal Income Tax Law Currently, there are two types of tax schedules applied: the full progressive tax schedule and the partial progressive tax schedule. The partial progressive tax schedule is the standard method applied to regular income such as monthly salaries or annual tax settlements. This schedule divides total income into several parts, and each part is taxed at a different rate, ranging from 5% to 35%.
The progressive personal income tax rate applies to resident individuals with income from salaries, wages, employment contracts of 3 months or more, or those with irregular income but who are subject to self-declaration of tax. Non-resident individuals, however, will be subject to a fixed tax rate instead of the progressive rate.
How to calculate progressive personal income tax according to the 7-tier tax schedule.
The progressive personal income tax schedule currently applied in Vietnam is divided into 7 brackets with tax rates increasing from 51% to 35% (1% tax rate). The calculation method is divided monthly or annually depending on the specific case.
The latest monthly progressive tariff schedule for 2025.
According to Article 22 of the amended Personal Income Tax Law, the progressive tax rate schedule applied monthly applies to individuals with regular income from salaries. The taxable income is the remaining amount after deducting personal and dependent deductions. Specifically, the monthly tax schedule for 2025 is as follows:
| Level | Taxable income/month (million VND) | Applicable tax rate |
|---|---|---|
| 1 | Up to 5 | 5% |
| 2 | Between 5 and 10 | 10% |
| 3 | Ages 10 to 18 | 15% |
| 4 | Ages 18 to 32 | 20% |
| 5 | Between 32 and 52 | 25% |
| 6 | Between 52 and 80 | 30% |
| 7 | Over 80 | 35% |
Annual progressive tax rates – When should you choose this calculation method?
The progressive tax rate schedule, applied annually, is for cases where tax settlements are made at the end of the year, or for individuals with irregular income (freelancers, those working multiple jobs, those receiving one-time bonuses, etc.). Total taxable income for the year will be divided according to the annual income threshold and the same tax rate as the monthly schedule will be applied, but multiplied by a factor of 12.
For example, if an individual has a total annual income of 300 million VND, and after deductions, the remaining amount is 220 million VND, this amount will be divided into tax brackets according to the progressive tax rate schedule for the year to calculate personal income tax. This tax schedule is particularly important in the year-end tax settlement, which usually takes place in March of the following year.
Instructions on how to calculate personal income tax using the progressive tax rate system.
Standard progressive personal income tax calculation formula according to the General Department of Taxation.
The standard formula applied to calculate personal income tax according to the progressive tax rate schedule is:
| Personal income tax payable = Total tax amount for each tax bracket calculated according to the progressive tax rate schedule. |
Before applying the tariff schedule, you need to determine:
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Total taxable income: total salary, bonuses, and allowances (if taxable).
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Deductions include personal deductions (11 million VND/month), dependent deductions (4.4 million VND/person/month), and mandatory insurance contributions, charitable donations, etc.
For example: An individual earns 25 million VND/month, has no dependents, and after deductions of 11 million VND, their remaining taxable income is 14 million VND. This amount will be divided into:
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The first 5 million is subject to 5% = 250,000.
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The next 5 million is subject to 10% = 500,000
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The remaining 4 million is subject to 15% = 600,000
Total personal income tax = 250,000 + 500,000 + 600,000 = 1,350,000 VND/month
Latest Tax Rates and Deductions Table 2025
There will be no changes to the personal allowance deduction in 2025. Specifically:
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Personal deduction: 11 million VND/month (132 million VND/year)
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Dependent deduction: VND 4.4 million/person/month (VND 52.8 million/year)
In addition, taxpayers are entitled to deductions for contributions to mandatory social insurance, health insurance, unemployment insurance, and certain charitable donations if they can provide valid proof.
Calculate progressive tax online: A quick and accurate solution for individuals.
With the development of technology, workers can now quickly calculate progressive tax online through tools such as:
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The official website of the General Department of Taxation provides a tool for entering income and automatically calculating tax according to the 7-tier tax bracket system.
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Accounting software like MISA and Fast are designed for businesses, but they also have versions for individuals.
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Excel's automated tool for progressive tax rates: many accountants use it to review payrolls.
Regardless of which tool you use, you still need to carefully check that deductions have been applied correctly. This is especially important for those with young children or elderly dependents, as accurate declarations can significantly reduce the amount of tax payable.
Important notes when applying the progressive personal income tax rate.
Some common mistakes employees make when calculating personal income tax:
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Income from multiple sources: you still need to consolidate all income for tax settlement, not calculate each source separately according to the tax schedule.
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Tet bonuses or other irregular income: even if not fixed monthly, they must still be added to total income and calculated according to a progressive scale.
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Failure to declare dependents in a timely manner: you may not receive deductions for previous months if you do not register them on time.
Although the personal income tax schedule is divided into tiers and progressively based on different levels, if you understand how it works, you can completely control your tax obligations and even minimize the amount of tax payable while still complying with the law.
Conclusion and recommendations
The progressive personal income tax rate is an important tool to ensure fair tax distribution according to income. Understanding how to apply the progressive tax rate in installments on a monthly or annual basis not only helps employees manage their finances proactively but also avoids errors during the tax settlement process.
If you are an employee, have multiple sources of income, or are unsure about your year-end personal income tax settlement, don't hesitate to contact us. MAN – Master Accountant Network For expert advice and support.
Contact MAN – Master Accountant Network today!
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