Question:
I would like to ask whether overtime wages are exempt from personal income tax.
Answer:
Pursuant to Clause 8, Article 4 of the Law on Personal Income Tax 2025, which specifically stipulates incomes exempt from personal income tax, the provisions are as follows:
Tax-exempt income
1.Income from the transfer, inheritance, or receipt of gifts of real estate between spouses; biological parents and biological children; adoptive parents and adopted children; parents-in-law and children-in-law; grandparents and grandchildren; and siblings.
2.Income from the transfer of residential houses, residential land use rights, and assets attached to residential land of an individual who owns only one residential house or one residential land plot in Viet Nam.
3.Income derived from the value of land use rights allocated by the State to individuals.
4.Income of households and individuals directly engaged in the production of crops, planted forests, livestock, aquaculture, and fishing that have not been processed into other products or have only undergone preliminary processing; salt production; income from dividends of members of agricultural cooperatives and cooperative unions; and income of individuals who are farmers entering into contracts with enterprises to participate in “large-scale field” projects, production forestry, or aquaculture.
5.Income from the conversion of agricultural land allocated by the State to households and individuals for production.
6.Income from interest on government bonds, local government bonds, interest on deposits at credit institutions, and interest from life insurance contracts.
7.Income from remittances.
8.Wages and salaries for night work, overtime work, and wages or remuneration paid for unused leave days in accordance with the law.
…
Accordingly, from 01 January 2026, the entire amount of overtime wages of employees is exempt from personal income tax. There is no longer a provision granting personal income tax exemption only for a portion of overtime wages as prescribed under previous regulations.
Reference consultation: Labor and employment services
