Vietnam’s 2026 five-bracket PIT table and the region-based UI ceiling: two payroll parameters to change on 1 January

On 1 January 2026, two payroll parameters change at once in Vietnam. The personal income tax table drops from seven brackets to five, and the salary ceiling used for unemployment insurance contributions separates from the social and health insurance ceiling, moving to a region-based formula. Both are configuration values. Get them wrong and nothing throws an error — the payroll run simply comes out wrong. This is written for whoever has to open the parameter screen, not for whoever reads the statute.

The regional minimum wage and the personal deduction also change from the start of the year. Those are covered separately in our payroll and HR changes for 2026; here they only appear as inputs.

The five-bracket progressive table: the correct figures

Personal Income Tax Law No. 109/2025/QH15 was passed by the National Assembly on 10 December 2025. Article 9 sets out the new progressive table for employment income of resident individuals. Per month of taxable income:

• Up to VND 10 million: 5%
• Over VND 10 million to 30 million: 10%
• Over VND 30 million to 60 million: 20%
• Over VND 60 million to 100 million: 30%
• Over VND 100 million: 35%

Annually, the thresholds are VND 120 million, 360 million, 720 million and 1,200 million. The old seven-bracket table, with its 5 / 10 / 18 / 32 / 52 / 80 million steps, no longer applies from tax year 2026 onward.

One detail deserves care. A number of summaries circulating online render the new table as 5 / 15 / 25 / 30 / 35% — keeping the second and third rates from the old table and merely merging brackets. That is wrong. The second rate falls from 15% to 10%, and the third from 25% to 20%. If whoever configures the system takes the numbers from a summary rather than from Article 9, the error lands squarely on the largest income group in most companies. Check against the full text of Law No. 109/2025/QH15 before entering anything.

The biggest trap: "effective 1 July 2026" does not apply to salaries

Law 109/2025/QH15 takes effect on 1 July 2026. Many news reports stop at that sentence and conclude that employees only get the new table from mid-year. For employment income, that is incorrect.

Article 29, clause 2 states it plainly: provisions on business income and on employment income of resident individuals apply from tax year 2026. Tax year 2026 begins on 1 January 2026. In practice, the January 2026 payroll must already withhold under the five-bracket table, together with the personal deduction of VND 15.5 million per month and VND 6.2 million per dependant per month set by Resolution 110/2025/UBTVQH15 of 17 October 2025.

This is the most dangerous configuration error of the year, precisely because it is quiet and long-running. A system left on the seven-bracket table until 1 July 2026 over-withholds for six months, raises no alert, and only surfaces at finalisation — by which point you are refunding hundreds of employees and explaining why.

Through 2026, your system must run two tax tables in parallel

This is what gets missed when the technical team simply overwrites the old parameter table.

Around the first quarter of 2026, companies finalise tax for tax year 2025. That year still falls under the old law: seven brackets, personal deduction of VND 11 million, dependant deduction of VND 4.4 million. At the same time, from the January 2026 payroll onward, monthly withholding runs on five brackets with deductions of VND 15.5 million and VND 6.2 million.

So the answer to "does the 2026 finalisation use five or seven brackets" depends on which year is being finalised, not on today's date. The 2025 finalisation uses seven. The 2026 finalisation — done in early 2027 — uses five.

The software implication: tax parameter sets need effective-date validity, each tied to a range of tax years, and the calculation must select its parameter set from the record's tax year rather than the run date. If your system holds a single rate table that gets edited in place, the 2025 finalisation breaks the moment someone types in the new figures. Fix that structure first, then enter the numbers.

The unemployment-insurance ceiling splits off and follows the region

Employment Law No. 74/2025/QH15 was passed on 16 June 2025 and takes effect on 1 January 2026, replacing the 2013 Employment Law. Article 34 sets the maximum salary used as the basis for unemployment insurance contributions at 20 times the monthly regional minimum wage announced by the Government at the time of contribution — not the base salary, as before.

With the regional minimum wages effective 1 January 2026 under Decree 293/2025/ND-CP, issued 10 November 2025, the 2026 unemployment insurance ceilings are:

• Region I: minimum wage VND 5,310,000, ceiling VND 106.2 million per month
• Region II: VND 4,730,000, ceiling VND 94.6 million per month
• Region III: VND 4,140,000, ceiling VND 82.8 million per month
• Region IV: VND 3,700,000, ceiling VND 74 million per month

The social and health insurance ceiling, meanwhile, still follows the reference level under Article 31 of the Social Insurance Law 2024: a floor equal to the reference level and a cap of 20 times that level. Until the base salary is abolished, the reference level equals the base salary, which as at 1 January 2026 is VND 2,340,000 — a ceiling of VND 46.8 million per month.

The two ceilings now differ in both formula and value, and the unemployment ceiling differs between branches of the same company. Many payroll systems currently share a single "insurance ceiling" variable across all three schemes. That is the first thing to separate: one company-wide field for the social and health insurance ceiling, and a separate unemployment ceiling bound to the region of each work location. With the country now consolidated into 34 provinces and cities, the regional classification in the appendix to Decree 293/2025/ND-CP is also worth re-checking — a branch may have shifted region without anyone noticing.

Contribution rates for 2026 are unchanged from 2025 for Vietnamese employees: retirement and survivorship 8% employee and 14% employer; sickness and maternity 3% employer; occupational accident and disease 0.5% employer; health insurance 1.5% employee and 3% employer; unemployment insurance 1% each. Totals: 10.5% employee, 21.5% employer.

Parts of the Employment Law 2025 worth keeping configurable

Article 33, clause 1 uses the phrase "up to": employees contribute up to 1% of monthly salary, employers up to 1% of the monthly payroll of participating employees. The old law fixed both at exactly 1%. The wording leaves room for future reductions, so make the unemployment contribution rate an editable parameter rather than a constant in the formula. See the full text of Employment Law No. 74/2025/QH15.

Two further clauses touch payroll. Clause 6 allows a reduction in the employer's share when newly hiring and employing persons with disabilities, for no more than 12 months — the system needs to flag those employees and stop the relief automatically when it expires. Clause 7 provides that an employer who fails to contribute in full must pay the employee an amount equal to the unemployment benefits they would otherwise have received, which makes under-contribution reconciliation reports something more than a formality.

Configuration acceptance checklist

After changing the parameters, do not stop at the save confirmation. Re-run and reconcile:

• Run the January 2026 payroll on a copy of production data for at least four employees: one with taxable income under VND 10 million, one around VND 25 million, one around VND 50 million, one above VND 100 million. Calculate all four by hand under the five-bracket table and compare to the dong.
• Check the VND 10–30 million band specifically. If tax for this group comes out higher than the manual figure, the second bracket is most likely still set to 15% instead of 10%.
• Compare January 2026 against December 2025 for the same person at unchanged income. If tax does not fall, the system is still on the old table or the old deductions.
• Re-run one 2025 finalisation record after entering the new table. The result must be identical to before. If it changed, your tax parameters lack effective-date validity and the 2026 table is overwriting 2025 figures.
• Take an employee on VND 60 million working in a Region III location. The unemployment contribution base must be VND 60 million, with the ceiling at VND 82.8 million. If the system caps it at VND 46.8 million, it is applying the social insurance ceiling to unemployment insurance — wrong. Conversely, the same person's social and health insurance base must still be capped at VND 46.8 million; if it shows VND 60 million, that ceiling has been deleted by mistake.
• Cross-check two branches in different regions at the same high salary. Identical unemployment ceilings mean the region parameter is not bound to the work location.
• Re-verify the region of every work location against the appendix to Decree 293/2025/ND-CP, especially units in recently merged administrative areas.
• Keep an audit trail of who changed which parameter, when, and what the previous value was. When the tax or social insurance authority asks, this is the only thing that answers quickly.

Conclusion

Neither change is hard to understand, but both sit where the system cannot detect its own mistake. The five-bracket table must run from the January 2026 payroll, not from 1 July 2026, and the unemployment ceiling must be separated from the social insurance ceiling and bound to each location's region. Getting both right in January costs far less than retroactive corrections in December.

The HR module of Tetra eOffice manages tax and insurance parameters with effective-date validity, supports separate contribution ceilings per region and work location, and runs entirely on your own infrastructure. If you are reviewing your 2026 payroll configuration, book a consultation with our team.

This article is for reference. Companies should verify against the current legal texts and their tax advisers before finalising configuration.