Tax-Exempt Allowances & Benefits in Vietnam (2026 Update)

Jul 21, 2026

HR & Payroll

Vietnam Tax-Exempt Income and Benefits from Salaries & Wages (2026 Update)

Pursuant to Decree No. 253/2026/ND-CP detailing and guiding the implementation of the Law on Personal Income Tax, issued on June 30, 2026. This Decree takes effect on July 1, 2026. However, provisions concerning income from business, salaries, and wages of resident individuals apply from the 2026 tax year. The tax-exempt income and non-taxable items for Personal Income Tax (PIT) are regulated as follows:

Table of Contents

1. Tax-Exempt Allowances and Subsidies

Telephone Allowance

This allowance is exempt from PIT if it simultaneously meets the following conditions:

The specific amount and eligibility conditions are clearly stipulated in one of the following corporate documents: Labor Contract; Collective Labor Agreement; Financial Regulations; Bonus Regulations… of the business.
The payment amount does not exceed the flat rate agreed upon or specified in the aforementioned documents.
Handling of excess payments: The portion paid within the specified flat rate is exempt from PIT; any portion exceeding the specified flat rate must be added to the employee’s taxable income.

Lunch and Mid-Shift Meal Allowance

From July 1, 2026, the maximum tax-exempt threshold for lunch and mid-shift meal allowances is VND 1,200,000/person/month. Specifically:

In-kind meals organized by the employer: If the business organizes lunch or mid-shift meals in forms such as direct cooking, purchasing catering services, or issuing meal vouchers, this benefit is fully exempt from tax (not included in the employee’s taxable income).
Cash allowance paid by the employer:
- Payments of VND 1,200,000/month or less: Fully exempt from tax.
- Payments exceeding VND 1,200,000/month: The portion exceeding VND 1,200,000 must be added to the taxable income for PIT calculation.

Uniform Allowance

Paid in cash (employees purchase uniforms themselves): Exempt up to a maximum of VND 5,000,000/person/year. Any portion exceeding VND 5,000,000 is subject to PIT.
Provided in kind (uniforms, shoes, etc., provided directly): Fully exempt from tax (no limit applied).
Combination of both cash and in-kind: The in-kind portion is fully exempt, while the cash portion is exempt up to a maximum of VND 5,000,000/person/year.

Business Travel Expenses (Per Diem)

Reimbursement based on actual receipts (airfares, hotel rooms, taxi fares, meals, guest receptions, etc., with full and valid invoices and receipts): Fully exempt from PIT.
Paid as a flat allowance (stipulating a specific rate per trip or per travel day): Exempt in accordance with the flat rate specified in the Financial Regulations or Internal Regulations of the business. Any portion exceeding the specified flat rate is subject to PIT.

2. Tax-Exempt Housing Benefits and Overtime Pay

Housing, Electricity, Water, and Accompanying Services

Free housing provided at the workplace: If the employer builds housing for employees working at the unit, this benefit (including electricity, water, and accompanying services, if any) is fully exempt from PIT.
Housing rent paid on behalf of the employee: If the employer pays the rent, electricity, water, and accompanying services on behalf of the employee, this amount is included in the individual’s taxable income based on the actual amount paid, but shall not exceed 15% of the employee’s total taxable income generated at the unit (excluding housing rent, electricity, water, and accompanying services).

Overtime and Night-Shift Pay

From 2026, overtime pay is exempt from PIT according to the following principles:

Tax exemption applies to the portion of wages and remuneration paid for night-shift and overtime work that is higher than the standard wages and remuneration paid for normal working hours under labor laws.
Tax exemption applies to wages and remuneration paid for unused annual leave days in accordance with the conditions and wage rates specified under Clause 3, Article 113 of the Labor Code, the Law on Cadres and Civil Servants, and the Law on Public Employees.
Employer’s Obligation: The paying organization or business must prepare a detailed list reflecting the night-shift and overtime hours worked, and the corresponding overtime/night-shift wages paid to employees. This list must be kept at the business and presented upon request by the tax authority. If no separate list is prepared, the business must prove the night-shift and overtime work through payrolls, timesheets, labor contracts, and other legal documents.
Handling of excess payments: Any portion of night-shift, overtime, or unused annual leave pay that exceeds the rates prescribed by law must be included in the individual’s taxable income.

3. Other Tax-Exempt Subsidies and Welfare Benefits

Insurance Subsidies and Social Welfare:

Subsidies for occupational accidents and occupational diseases.
One-time maternity or child adoption subsidies.
Subsidies for working capacity reduction, one-time retirement subsidies, monthly survivorship allowances, and other subsidies under social insurance laws.
Sudden hardship allowances, unemployment benefits, severance pay, and job-loss allowances in accordance with the law. (If the business specifies severance or job-loss allowances in its financial regulations, internal regulations, labor contracts, or collective labor agreements that are higher than the statutory rates, the actual excess paid is also not included in the employee’s taxable income).

Non-Salary and Non-Wage Income Exempt from PIT:

Support for treating critical illnesses: Actual financial support (backed by invoices and receipts) paid by the employer for the treatment of critical illnesses (under the list issued by the Minister of Health) for the employee and their relatives (biological children, adopted children, stepchildren; spouse; biological parents, parents-in-law; stepparents; adoptive parents). The tax-exempt support amount is the actual amount paid by the employer according to invoices, up to a maximum of the actual hospital fees incurred after deducting any payouts from insurance organizations (if any).
Annual home leave airfares: Round-trip airfares paid (or reimbursed) by the employer once a year for expatriate employees or Vietnamese employees working abroad to visit their home country (the country of nationality or where their family resides) and vice versa.
Non-mandatory, non-accumulative insurance premiums: Premiums paid by the employer for non-mandatory insurance products with no accumulation of premiums (no cash-back), including health insurance and term life insurance (excluding return-of-premium term life products) from insurance businesses legally operating in Vietnam.
Professional training costs: Expenses paid by the employer for training to improve the qualifications and skills of employees, in alignment with their professional duties or the employer’s training plan.
Relocation and business travel costs: Payments made by the employer to service providers or directly to employees to facilitate relocation, transfer, or business travel in accordance with mobilization decisions, financial regulations, collective labor agreements, or labor contracts, backed by valid invoices and receipts.
Funeral and wedding allowances: Allowances paid by the employer for funerals or weddings of the employee and their family, in accordance with the financial or internal regulations of the business, and within the deductible limits for Corporate Income Tax (CIT) purposes.
Nutritional and health regimes for female employees: Payments for nutritional and special health/physiological regimes for female employees in accordance with Article 5 and Article 8 of Decree No. 349/2025/ND-CP.