Decree 253/2026/ND-CP bring Several new regulations directly relate to salary policies, benefits, and tax deduction procedures at businesses. Below are some notable new points that businesses need to be aware of when calculating and deducting personal income tax from 2026 onwards.
1. Mid-shift meal allowance/lunch allowance: tax-exempt up to VND 1,2 million/person/month (Point g, Clause 2, Article 8)
From July 1st, 2026, meal allowances for mid-shifts and lunch will be paid by the employer. Income not subject to personal income tax is not calculated if it does not exceed 1,2 million VND/person/month..
Conversely, if the expenditure exceeds this amount, The amount exceeding 1,2 million VND/person/month This is included in the taxable income of the employee.
If a business directly organizes meals for its employees, such as cooking, purchasing meals, or providing meal vouchers, then this benefit is not included in taxable personal income.
Businesses should note:
- The meal allowance policy is currently in effect;
- How to show meal allowances on payroll;
- Payment vouchers and internal records;
- How to determine the tax-exempt portion and the taxable portion if the expenditure exceeds the limit.
2. Additional deductions for medical and educational expenses up to a maximum of 47 million VND/year (Clauses 2 and 3, Article 49)
Decree 253/2026/ND-CP This includes supplementing regulations regarding deductions for medical and educational expenses when determining taxable income from salaries and wages of resident individuals. new deductionThis has a direct impact on determining the taxable income of employees for personal income tax purposes.
Accordingly, taxpayers are entitled to deductions from their taxable income for expenses incurred for themselves and their dependents, including:
- Medical examination and treatment costs: Maximum 23 million VND/year;
- Education and training costs: Maximum 24 million VND per year.
Therefore, the total deduction for these two groups of expenses could amount to... 47 million VND/year.
To be eligible for the deduction, taxpayers must have invoices and supporting documents must be legal and meet the prescribed conditions (Clause 3, Article 49).. For medical expenses, the deductible costs must be incurred at domestic medical facilities within the scope of health insurance coverage. For educational expenses, the deductible costs include tuition fees for preschool, primary, secondary, vocational, and university education, as well as other professional skills training at domestic educational institutions as regulated.
Businesses should note: Tax deductions must be supported by documentation that meets the eligibility criteria. Businesses should not automatically make deductions without sufficient evidence to prove that the expense meets the eligibility requirements. Therefore, businesses should proactively guide employees to prepare and retain relevant invoices and documents for personal income tax settlement purposes.
3. Expanding the types of income exempt from personal income tax (Article 26 and Point h, Clause 3, Article 8)
Decree 253/2026/ND-CP The regulations clarify and specify several income items that are not subject to personal income tax, including many items directly related to salaries and benefits for employees. Notable items include:
- Overtime pay and wages;
- Wages and salaries paid for night work;
- Salaries and wages paid for days not taken as leave;
- Some types of severance pay and unemployment benefits. according to the specified conditions.
For severance pay, unemployment benefitsIn cases where a business has provisions regarding the level of allowances in its financial regulations, internal regulations, labor contracts, or collective labor agreements, the actual allowance paid according to these regulations, including any amount exceeding the level stipulated by labor law, shall be determined according to the provisions on tax-exempt income.
Businesses should note:
- It is necessary to review payments to employees, especially overtime pay, night work pay, unused vacation pay, and severance pay upon termination of employment contracts.
- At the same time, it is necessary to keep complete records of employment contracts, time sheets, payrolls, internal regulations, collective labor agreements, and payment documents to prove the basis for determining tax-exempt income when the tax authorities conduct an audit.
4. The 10% personal income tax deduction has been increased from 2 million to 5 million VND per transaction (Clause 2, Article 50).
A notable change at Decree 253/2026/ND-CP This involves raising the personal income tax deduction threshold to 10% for individuals who do not have an employment contract or whose contract is for less than 03 months.
According to the Clause 2, Article 50 According to Decree 253/2026/ND-CP, when businesses pay salaries, wages, fees, and other expenses to resident individuals, tax deductions are carried out as follows:
- From 5 million VND/time or more: Businesses must deduct 10% personal income tax before paying income;
- Under 5 million VND per visit: The 10% deduction is made upon individual request.
- This applies to individuals whose only income is subject to the 10% withholding tax. However, if the estimated total taxable income after personal deductions is below the tax threshold, a commitment can be made to allow the organization to pay the income temporarily without withholding tax.
Thus, the 10% deduction threshold has increased from VND 02 million per transaction to VND 05 million per transaction. Businesses need to update their payment procedures and verify the eligibility and commitment documents of individuals before withholding deductions.
Businesses should note: The procedures for paying and deducting personal income tax for collaborators, seasonal workers, and individuals without labor contracts need to be updated. Furthermore, the eligibility and documentation of individuals should be checked before any tax exemptions are granted.
5. Adding taxable income from digital assets and certain new assets (Article 16)
In addition to changes related to salaries and benefits, Decree 253/2026/ND-CP It also expanded the scope of taxable income to include several new types of assets and transactions.
According to regulations, taxable income includes income from:
- Income from the transfer of Vietnamese national domain names “.vn”;
- Income from the transfer of greenhouse gas emission reduction results, carbon credits;
- Income from the transfer of license plates won at auction;
- Income from the transfer of digital assets, including virtual assets, crypto assets, and other digital assets as stipulated by the law on the digital technology industry.
The inclusion of these income sources demonstrates that personal income tax policy has been expanded to encompass new transactions and asset types arising in the digital economy.
Businesses should note:
- For businesses that have transactions involving digital assets, “.vn” domain names, carbon credits, or other assets falling under the aforementioned categories, it is necessary to correctly identify the nature of the transaction and the recipient of the income in order to fulfill tax obligations accordingly.
- Although these are personal income, businesses may be involved as the payer or participant in the transaction, and therefore should be aware of their responsibility to deduct, declare, and pay taxes on behalf of individuals in cases where required by law.”
6. Notes on the time of application (Articles 69 and 70)
Decree 253/2026/ND-CP effective from date 01 / 07 / 2026. However, not all new regulations will be applied immediately on this date; the implementation time may vary depending on income group.
Under the transitional provisions, the regulations relating to Income from business activities, salaries, and wages of resident individuals will be subject to the tax regulations effective from the 2026 tax year.. Specifically, the regulations regarding meal allowances during shifts and lunch breaks, as stipulated in point g, clause 2, Article 8, will be applied from July 1, 2026.
For businesses that have declared and paid personal income tax on salaries and wages for the tax period of 2026 between January 1, 2026 and before the effective date of the Decree, the business There is no need to resubmit monthly or quarterly tax returns. which adjustments will be made to the personal income tax return for the year 2026.
7. What should businesses keep in mind when applying Decree 253/2026/ND-CP?
Changes at Decree 253/2026/ND-CP This can directly impact a company's wage and benefits policies and personal income tax deduction procedures. Therefore, businesses should proactively review these aspects.
- Review of salary and benefits policies: Check meal allowances, overtime pay, night shift pay, unused vacation pay, and other employee benefits.
- Reviewing records and documents: Review employment contracts, time sheets, payroll records, internal regulations, collective bargaining agreements, and payment documents.
- Updated personal income tax deduction procedures: This applies especially to collaborators, seasonal workers, and individuals who do not have employment contracts.
- Review the tax deduction records: Instruct employees to prepare all necessary invoices and supporting documents for eligible medical and educational expenses that qualify for tax deductions.
- Review the data declared during the year: Identify the amounts that were declared and deducted before the Decree came into effect, in order to process them according to the transitional provisions.