Official letter 10311/NBI-QLDN1 about PIT:
1. Regarding overtime pay and wages
Based on the aforementioned regulations and the Company's statement, if the Company operates in the electronics sector, the total overtime hours for employees must not exceed 300 hours per year. Wages paid for overtime work are exempt from personal income tax (PIT) only if the overtime complies with all conditions and time limits prescribed by labor laws; any portion not meeting these regulations must be included in taxable income. Specifically:
1.1. If an employee works more than 40 hours of overtime in a month, the wages corresponding to the overtime hours exceeding the 40-hour monthly limit are not eligible for PIT exemption and must be included in taxable income for the month in which they are incurred.
1.2. If an employee has not exceeded 40 hours of overtime in a month but the accumulated overtime hours for the year have reached the 300-hour annual limit (applicable under Clause 3, Article 107 of the Labor Code), the wages corresponding to overtime hours exceeding that limit are not eligible for PIT exemption.
1.3. If an employee works more than 40 hours of overtime in a month but the total overtime hours for the year have not yet exceeded 300 hours, the wages corresponding to the hours exceeding the 40-hour monthly limit are still not eligible for PIT exemption.
1.4. If an employee simultaneously exceeds both the 40-hour monthly limit and the 300-hour annual limit, taxable income shall be determined based on actual overtime hours starting from the point at which the employee ceases to meet either of the limits prescribed by labor laws.
2. Regarding wages for night work
Based on the aforementioned regulations, the Ninh Binh Provincial Tax Department provides guidance according to the following principle: Night-shift wages and salaries paid in accordance with labor laws are exempt from Personal Income Tax (PIT), whereas any payment exceeding the statutory limit must be included in taxable income. Accordingly, if a company pays night-shift wages to employees at a rate of 35% of the base wage, the portion corresponding to the 30% rate—determined in accordance with Article 56 of the Government’s Decree No. 145/2020/ND-CP dated December 14, 2020—is exempt from PIT, while the portion exceeding the statutory limit must be included in the employee's taxable income.
3.Regarding deductions for medical and education/training expenses
Based on the aforementioned regulations, where an employee incurs medical or education/training expenses that fully meet the conditions set forth in Article 49 and requests the application of the corresponding deduction, the Company shall—based on the documentation, invoices, and vouchers provided by the employee—determine the deduction amount when calculating taxable income for Personal Income Tax (PIT) withholding purposes, in accordance with Clause 1, Article 50 of Decree 253/2026/NĐ-CP (the deduction limit is determined on an annual basis and is not allocated evenly across months). Employees requesting the application of deductions under Article 49 must personally finalize their PIT in accordance with Clause 3, Article 51, and are not eligible to authorize the Company to perform the tax finalization on their behalf for the year in which the deduction is claimed.
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