Do probationary jobs in Vietnam have to deduct 10% of salary paid for PIT

Does the probationary period have to deduct 10% of the salary for paying personal income tax? This must be a question asked by many employees, according to the previous regulations, the probationary must deduct 10% of his salary to pay personal income tax. So, according to the latest regulations, do you have to deduct 10% of your salary for paying personal income tax? Here is the answer of Lawyer X.

Legal grounds

Labor Code 2019;

Circular 111/2013/TT-BTC.

The latest regulations on probation in Vietnam

The employer and the employee can agree on the content of the probationary period stated in the labor contract; or agree on probation by entering into a probationary contract.

Although a probationary period can be agreed upon, this period shall not exceed the following provisions:

– No more than 180 days for the job of an enterprise manager as prescribed by the Law on Enterprises; Law on management and use of state capital invested in production and business in enterprises;

– No more than 60 days for jobs with professional titles requiring professional qualifications; technical college or higher;

• No more than 30 days for jobs with professional titles requiring professional qualifications; intermediate technicians, technical workers, professional staff;
• No more than 06 working days for other jobs.

This time depends on the level and complexity of the work.

And the employee’s salary during the probationary period shall be agreed upon by both parties but must be at least 85% of the salary of that job. So, does the probationary period have to deduct 10% of the salary for paying PIT?

In addition, during the probationary period, each party has the right to cancel the probationary contract; or labor contracts entered into without prior notice and without compensation.

At the end of the probationary period, the employer must notify the employee of the probation result.

If the probationary period is satisfactory, the employer shall continue to perform the signed labor contract, if the probation is agreed upon in the labor contract; or must enter into a labor contract in the case of entering into a probationary contract.
In case of unsatisfactory probation, the signed labor contract or probationary contract shall be terminated.

Does the probationary period have to deduct 10% of the salary for paying personal income tax?

According to the Personal Income Tax Law 2007 stipulates: Salary; wages and amounts of a salary nature; Remuneration in the form of cash or non-cash is taxable collection.

Therefore, the income of the probationary is subject to tax.

On the other hand, according to Clause 1, Article 25 of Circular 111/2013/TT-BTC, the tax deduction is as follows:

Tax deduction is the organization; income payers shall deduct the payable tax amount from the taxpayer’s income before paying the income; As follows:

– Income of non-resident individuals

Organization; individuals paying taxable income to non-resident individuals are responsible for withholding personal income tax before paying the income. The tax to be withheld is determined according to the guidance in Chapter III (from Articles 17 to 23) of this Circular.

• Income from salary, wages
• For resident individuals signing labor contracts of three (03) months or more, income-paying organizations and individuals shall deduct tax according to the partially progressive Tariff; including cases where individuals sign contracts for three (03) months or more at many places.
• For a resident who signs a labor contract for three (03) months or more but leaves work before the end of the labor contract, the organization; income payers still deduct tax according to the progressive tax schedule.

…..

• Tax deduction for some other cases

Organizations and individuals that pay wages, remunerations and other expenses to resident individuals do not sign labor contracts (under the guidance at Points c, d, Clause 2, Article 2 of this Circular) or sign contracts. If the employee has less than three (03) months of labor with a total income of two million (2,000,000) VND/time or more, tax must be deducted at the rate of 10% of the income before paying to individuals.

Considering that, probation means an employee and an employer sign a probationary contract or a type of labor contract with a maximum term of 60 days (2 months). In addition, the specific regulations on regional minimum wages in Decree 90/2019/ND-CP are as follows:

– The level of 4,420,000 VND/month, applicable to enterprises operating in the area of ​​region I.

– The rate of 3,920,000 VND/month, applicable to enterprises operating in the area of ​​Region II.

– The level of 3,430,000 VND/month, applicable to enterprises operating in the area of ​​Region III.

– The level of 3,070,000 VND/month, applicable to enterprises operating in the area of ​​Region IV.

In which the salary paid to employees working in normal working conditions; ensuring enough normal working hours in a month and fulfilling labor norms; or the agreed work must ensure:

Not lower than the regional minimum wage for employees doing the simplest jobs;
At least 7% higher than the regional minimum wage for employees who do jobs requiring workers who have undergone vocational training; vocational training as prescribed in Clause 2 of this Article.
Therefore, the total income of employees is over 2 million VND. So, with the question “Does the probationary period have to deduct 10% of the salary to pay PIT?” then the employer must deduct 10% of the salary before paying the employee’s salary.

This withholding will be refunded if 1 year the employee’s income is not enough to pay personal income tax (132 million VND/year excluding exemptions).

On the other hand, in the case of an individual with only income subject to tax withholding at the rate mentioned above; but the estimate of the individual’s total taxable income after deduction of family circumstances is not enough to pay tax, the individual has income to make a commitment (according to the form issued together with the guiding document on tax administration – Form No. 02) send the income-paying organization to the income-paying organization as a temporary basis for not deducting personal income tax.

Based on the commitment of the income recipient, the income-paying organization does not deduct tax. At the end of the tax year, the income-paying organization still has to summarize the list and income of individuals who have not yet reached the tax deduction level (in the form issued together with the guiding document on tax administration) and submit it to the tax authority. tax office. Individuals making commitments must be responsible for their commitments. In case of fraud detection, they will be handled in accordance with the Law on Tax Administration.

Individuals making commitments under the guidance at this point must register for personal tax and have a tax identification number at the time of commitment.

Personal income tax payment deadline

Pursuant to Point dd, Clause 3, Article 16 of Circular 156/2013/TT-BTC; the time limit for paying personal income tax when transferring real estate is the time limit written on the tax notice of the tax authority.

Penalties for late payment, non-payment of personal income tax

Upon receipt of the tax payment notice; taxpayers who do not pay will not have a specific penalty; which is calculated according to the regulations on late payment interest; This content is clearly specified in Clause 1, Article 42 of Decree 125/2020/ND-CP as follows:

“1. Calculation of late payment fines a) Organizations and individuals that are late in paying fines for administrative violations of taxes and invoices will be charged a fine for late payment of fines at the rate of 0.05%/day calculated on the late payment fines.b ) The number of days of late payment of fines, including holidays and days off according to the prescribed regime, is counted from the day following the expiration of the fine payment time limit to the day immediately preceding the date the organization or individual pays the fine to the bank. state books.”
Thus, the amount of late payment of 01 day = 0.05% x Amount of late payment.

Example: Mr. A is obliged to pay personal income tax of VND 50 million; if Mr. A fails to pay by the deadline in the notice, the daily late payment amount that Mr. A has to pay is VND 25,000.

Note:

– No late payment fines shall be charged in the following cases:

• During the period of postponement of the execution of the fine decision;
• During the consideration and decision on fines exemption;
• The fine amount has not yet been paid in case the fine is paid many times.
• In case an organization or individual fails to voluntarily pay fines or late payment interest to the state budget, the tax agency directly managing such organization or individual shall notify and urge the organization or individual to individuals pay fines and late payment fines according to regulations.

Above is the content of advice on the issue of “Does the probationary period have to deduct 10% of the salary for PIT payment?”. If you have any questions about the tax deduction, please contact hotline 0833102102 for advice.

Related articles:

• In Vietnam, are employers allowed to enter into labor contracts with 15-year-olds?
• Change the type of labor contract in Vietnam
• Rights of employees when unilaterally terminating the labor contract

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