Raising family deduction level from 2026: How to calculate for the most benefit?

The increased family deduction allows those earning over 27.9 million VND/month to pay tax if they have two dependents. When the revised Personal Income Tax Law is passed, salaried workers will benefit more because of the new progressive tax schedule.

People do tax settlement procedures at Ho Chi Minh City Tax - Photo: TTD

Near the end of the year, salaried workers received good news: The National Assembly Standing Committee agreed to increase the family deduction for taxpayers to 15.5 million VND/month and the deduction for each dependent to 6.2 million VND/month, applicable from the 2026 tax period.

Changes from January 2026

This is good news for wage earners after many years of being affected by economic difficulties, with wages shrinking while prices continue to rise.

This is also the response from the management agency after countless petitions from salaried workers since 2020 until now and also petitions from voters in a series of provinces and cities such as Ho Chi Minh City, Hanoi, Vinh Long, Ha Tinh, Son La, Quang Binh ... and the ministries of National Defense, Information and Communications, Health ... all proposed to increase the family deduction level because it is too outdated.

The highest recommended level is 18-20 million VND/month, the lowest is 13.3 million VND/month, and the final level is 15.5 million VND/month. This is considered a relatively reasonable level in the current context. Importantly, it will be applied from 2026, instead of having to wait until 2027 like one of the previous options.

With the new family deduction, if a salaried person has two dependents, their income must be over 27.9 million VND/month to be subject to tax. Assuming an income of 32.9 million VND/month (equivalent to 394.8 million VND/year), they must pay personal income tax of 250,000 VND/month.

When the revised Personal Income Tax Law is passed, salaried workers will benefit even more because of the new progressive tax schedule. Then, a salaried worker with two dependents with a salary of 37.9 million VND/month will only have to pay about 500,000 VND/month in tax. Many others will no longer have to pay personal income tax.

Although there are still opinions that this joy would have been more complete if the new deduction had been applied in 2025, when many salaried workers whose income is not yet taxable will have their personal income tax temporarily paid this year refunded, thereby having a little more money to cover their living expenses.

Of course, the National Assembly Standing Committee's decision to apply from the 2026 tax period also has a reason, because if applied from 2025, it will increase the number of people eligible for personal income tax refund in 2025 very high, especially those whose taxable income falls into levels 1 and 2 in the progressive tax schedule. At that time, refunding taxes to a large number of people will entail a huge amount of work to be resolved.

The National Assembly Standing Committee has agreed to increase the family deduction level and apply it from January 2026. Now is the time for businesses and taxpayers to sit down and calculate how to make the best use of this incentive, first of all with this year's Tet bonus.

Businesses should calculate the most beneficial for workers.

Usually, businesses often have bonuses for employees at the end of the year, sometimes divided into several installments and paid from the end of December of the previous year until Lunar New Year.

According to experts, with the change in tax policy, businesses and employees should calculate to pay this amount to January 2026 because personal income tax is calculated based on the time of payment. Therefore, the 2025 bonus paid in January 2026 will be counted as income of 2026 and applied according to the new deduction level, which is much more beneficial for taxpayers.

In the long term, taxpayers expect that when the new Personal Income Tax Law is passed, the family deduction level will be carefully studied and calculated, ensuring that it is consistent with price fluctuations as well as the increase in people's living standards in the recent period as well as forecasts for the coming time.

To ensure the principle that individuals need to have a certain level of income to meet the basic needs of life such as food, housing, travel, study, medical treatment... Income above this level must pay tax.

In which, the plan to assign the Government to regulate the family deduction level to ensure flexibility and proactive adjustment to suit the reality and requirements of the country's socio-economic development in each period is reasonable, avoiding the precedent of the family deduction level being outdated before being applied as happened before.

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Source: https://tuoitre.vn/nang-muc-giam-tru-gia-canh-tu-nam-2026-tinh-toan-sao-cho-co-loi-nhat-20251020083957501.htm