How is the tax calculated for December 2025 salaries paid in January 2026? This is a question of great concern to many accountants and employees as personal income tax (PIT) policies undergo changes under the new law. Determining the correct tax bracket not only helps businesses comply with legal regulations but also directly impacts the amount of tax payable by employees during the annual tax settlement period. Below is a detailed analysis based on legal principles and transitional regulations related to the timing of tax calculation.
Regulations on the effective date of the new Personal Income Tax Law
Law on Personal Income Tax No. 109/2025/QH15 This law, enacted by the National Assembly, includes several important adjustments to the tax structure. According to regulations, this law officially takes effect from July 1, 2026. However, for income from salaries and wages of resident individuals, lawmakers have allowed the application of the 2026 tax year to ensure consistency with the calendar year tax settlement cycle.
This means that all income generated in 2026 will be adjusted according to the new legal system. Therefore, to answer the question of how to tax a December 2025 salary paid in January 2026, taxpayers need to refer to this transitional provision to determine the correct tax period.
Principles for determining the tax assessment time for wages.
One of the key factors in answering the question of how to calculate taxes on December 2025 salaries paid in January 2026 is the principle of determining the time when taxable income arises.
Vietnamese personal income tax law applies the principle of actual receipt, meaning income is determined at the time the employee actually receives the money. According to the new tax law, the tax calculation time for salaries is determined based on the following points:
- The time when a business makes income payments to its employees.
- The time when employees actually receive their wages, whether in cash or via bank transfer.
Therefore, although the salary is calculated based on work performed in December 2025, if the company pays it in January 2026, this income will be considered as arising in the 2026 tax year. So, to clarify how to tax a December 2025 salary paid in January 2026, the answer is to apply the new tax schedule for 2026. Businesses can refer to this. tax accounting services Professionalism is essential to ensure that the initial tax filings at the beginning of the year proceed smoothly.
Personal income tax rates effective from 2026.
When determining whether the December 2025 salary, payable in January 2026, will be subject to the new tax schedule, accountants should note that the progressive tax system has been adjusted from 7 brackets down to 5 brackets.
This change aims to simplify tax calculation and reduce the burden on middle-income taxpayers. Some notable points of the new tax schedule include:
- Maintain the lowest tax rate to protect low-income groups.
- Combining several intermediate tax brackets aims to simplify calculations.
- Eliminate intermediate high tax brackets to reduce the number of tax calculation steps.
Thanks to this adjustment, many workers may pay less tax than under the old system, especially at common income levels.
Impact on businesses and workers
Determining the correct tax rate when December 2025 salaries are paid in January 2026 is not only about legal compliance but also directly impacts payroll management within the enterprise.
For businesses, several important preparatory steps need to be taken, such as:
- Update the payroll software and tax deduction system to reflect the new tax schedule.
- Clearly inform employees about the change in tax calculation methods during the first paycheck of the year.
- Separate payment documents between payments made in 2025 and payments made in 2026 for easier tax audits.
For workers, the implementation of the new tax schedule could help increase their net income, especially when deductions and tax bracket structures are adjusted in a more favorable direction.
Some common situations when paying salaries at the beginning of the year.
In practice, when determining how to tax salaries paid in January 2026 for December 2025, businesses may encounter some special cases:
Tet bonus will be paid together with the January 2026 salary.
If the bonus is paid at the same time as the January 2026 salary, this income will also be calculated according to the new 5-tier tax system.
Applying personal deductions
Deductions for yourself and your dependents will be applied according to the new regulations for the 2026 tax year.
Calculation error based on the old tax schedule.
If a business mistakenly deducts tax according to the old 7-tier tax schedule, it needs to make adjustments to refund the excess tax deducted to its employees.
Conclude
In summary, how should taxes be calculated for December 2025 salaries paid in January 2026? The deciding factor is not the month of work but the actual time of income payment. Since the payment is made in 2026, the new personal income tax rate under current law must be applied. Understanding this principle will help businesses avoid errors in tax deductions and ensure the legitimate rights of employees during the transition period of tax policy. Please contact MAN – Master Accountant Network for timely advice and support!
Contact information MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content is moderated by: Mr. Le Hoang Tuyen – Founder & CEO of Man, CPA Vietnam Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Source of information
This article is compiled based on official legal grounds:
- The Personal Income Tax Law No. 109/2025/QH15 was promulgated on December 10, 2025.
- Law on Personal Income Tax No. 04/2007/QH12 and related amendments and supplements.
