You wonder how to calculate personal income tax (PIT)? Don’t worry, this article will guide you on how to calculate personal income tax in an easy-to-understand and concise manner, even if you are not familiar with accounting.
What is Personal Income Tax?
Personal income tax is the amount of money you pay to the government based on your income from salary, business, or investments.However, not everyone has to pay.To calculate personal income tax, you need to know the remaining income after deducting tax-exempt amounts.
3 Simple Steps to Calculate Personal Income Tax
Step 1: Find the taxable income
Formula: Taxable income = Salary – (Insurance + Family deductions).
Mandatory insurance: Usually around 10.5% of salary (social insurance 8%, health insurance 1.5%, unemployment insurance 1%).
Family deductions:
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By myself: 11 million VND/month.
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Dependents (young children, unemployed parents): 4.4 million VND/person/month.
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Example:
Salary 15 million/month, no dependents:
Insurance: 15 million × 10.5% = 1.575 million.
Family deduction: 11 million.
Taxable income = 15 million – 1.575 million – 11 million = 2.425 million/month.
Step 2: Apply the tax rate
If the taxable income is greater than 0, you pay tax according to the following table:
|
Taxable income (million/month) |
Tax rate |
|---|---|
|
Until 5 |
5% |
|
From 5 to 10 |
10% |
|
Over 10 |
Higher |
Example: Taxable income 2.425 million → Tax = 2.425 million × 5% = 121,250 VND/month.
Step 3: Check with the company or tax authority
If you work for a company, they will calculate and pay your personal income tax on your behalf.
If you run your own business, you file taxes monthly or quarterly.
Note: Keep the pay slip for verification.
Note When Calculating Personal Income Tax
Not everyone pays taxes: If your salary is below 11 million VND/month (without dependents) after deducting insurance, you may not have to pay personal income tax.
Some non-taxable items: Lunch allowance, gifts under 10 million VND.
Ask the expert if it’s difficult: Contact H&P Group for accurate and easy-to-understand personal income tax calculation guidance.
Calculating personal income tax is very simple: deduct insurance and family deductions, then apply the tax rate if there is taxable income left. Understanding the calculation helps you grasp your obligations and avoid mistakes. Need assistance with personal income tax calculation?Contact H&P Group for quick advice on taxes and accounting according to the latest regulations!
