Question 192. Are amounts equivalent to payments for SI, HI, UI, and annual leave, paid as additional amounts in the same salary period of an Older Employee on pension, subject to PIT?

Under Article 168.3 of the Labour Code, for any Employee who is not covered by compulsory SI, HI, and UI, in addition to salary payment, the Employer shall simultaneously pay the said Employee in his or her same salary period an amount equivalent to the level of payments for compulsory SI, HI and UI, and annual leave in accordance with the law. Since the Older Employee on pension is not subject to the compulsory SI[1], HI[2] and UI[3], the Employers, upon hiring him or her, shall pay the Older Employee on pension and working in the enterprise, amounts equivalent to payments of these mandatory insurance types plus annual leave payment in the same salary period in accordance with the law.

In terms of PIT related to the Employee as a resident individual signing a LC with a term of 3 months or more, the additional payment in the said same salary period is regarded as incomes from salary, wage liable to PIT. The Employer shall make tax withholding under the partially progressive tax tariff pursuant to the PIT Law [4].

[1]Article 123.9 of Law on SI

[2]Article 12.2.(a) of HI Law 2008, amended in 2014

[3]Article 43.2 of Law on employment

[4]Article 25.1 (b) of Circular 111/2013/TT-BTC of Ministry of Finance dated 15 August 2013