Do students who teach extra classes have to pay personal income tax?

In big cities, to save costs and make traveling more convenient, many parents choose to hire students to tutor their children at home.

According to regulations, students who work as tutors outside of school are considered individuals who work as tutors outside of school for a fee. Therefore, students must register their business or sign a contract with tutoring centers/facilities. So in this case, do students have to pay personal income tax?

Students set up business households

If students register to establish a business household, they must pay personal income tax. Article 4, Circular 40/2021 stipulates personal income tax for business households. Specifically, business households and business individuals with revenue from production and business activities in the calendar year of 100 million VND or less are not required to pay personal income tax according to the law on personal income tax.

From January 1, 2026, the threshold for personal income tax payment for individuals and business households will increase to VND 200 million according to the provisions of Article 5, Article 17, Clause 2, Article 18, Law on Value Added Tax 2024.

Students work as tutors. (Illustration photo)

Students sign tutoring contracts with the center

In case students sign a tutoring contract, personal income tax will be deducted from their monthly salary according to Article 25, Circular 111/2013.

Accordingly, labor contracts with a term of less than 3 months and a monthly salary of 2 million or more for part-time students will have their income paid by the income payer deducted tax at a rate of 10% of the income before payment.

Labor contracts with a term of 3 months or more and a monthly income level that is taxable are also subject to tax payment.

Thus, if a student signs a contract for less than 3 months and has an income payment of 2 million VND/time or more, or the total payments in a month is greater than 2 million VND, he/she does not have to pay personal income tax. However, the party paying the income will deduct tax at a rate of 10% on the income before paying it to this person.

Regulations on extracurricular teaching

Article 6, Circular 29/2024 on extra teaching and learning issued by the Ministry of Education and Training stipulates that organizations or individuals organizing extra teaching outside of school for money must register their business in accordance with the provisions of law and publicly disclose information on the subjects they teach.

At the same time, organizations or individuals providing extra teaching are required to publicly disclose the number of extra teachers for each subject according to each grade level; location, form, and time of organizing extra teaching and learning; list of extra teachers and tuition fees before enrolling students for extra teaching and learning classes.

Extracurricular tutors need to ensure good moral qualities and professional competence appropriate to the subjects they teach.

At the same time, teachers who are teaching at schools and participate in extracurricular teaching must report to the Principal, Director or head of the school about the subjects, location, form and time of extracurricular teaching.

Anh Anh

Source: https://vtcnews.vn/sinh-vien-day-them-co-phai-dong-thue-thu-nhap-ca-nhan-ar926377.html