Guide · Allowances
Tax-free allowances in Vietnam.
The allowances that can be paid free of income tax in 2026, their caps, and the paperwork that keeps them exempt.
Updated 22 October 2026 · General information, not legal or tax advice
Short answer
Which allowances are tax-free in Vietnam in 2026?
Several allowances paid on top of salary are exempt from personal income tax in Vietnam, within caps and only when each is documented as a genuine allowance. As of October 2026 the main ones are a cash meal allowance of up to ₫1,200,000 a month (meals provided in kind are fully exempt), uniforms up to ₫5,000,000 a year in cash, a telephone or stationery allowance within the amount set in company policy, the premium part of overtime and night-shift pay, and employer-provided housing up to 15% of taxable income. Most of these also sit outside the social-insurance base, so structuring a package correctly lowers both tax and contributions without changing what the employee receives. The condition is documentation: each allowance must be named separately in the labour contract or pay policy, not folded into one salary figure.
The list
Tax-free allowances and their caps.
| Payment | Tax-free limit |
|---|---|
| Meal allowance in cash | Up to ₫1,200,000 a month |
| Meals provided in kind | Fully exempt |
| Uniforms in cash | Up to ₫5,000,000 a year |
| Telephone, stationery | Within the amount in company policy |
| Overtime and night-shift premium | The part above normal pay |
| Employer-provided housing | Taxed only above 15% of taxable income |
Getting it right
Keep the exemption.
- Name each allowance separately in the labour contract or a written pay policy.
- Pay it on the payslip as its own line.
- Keep within the cap; anything above it is taxable salary.
- Do not relabel ordinary salary as an allowance — inspectors look at substance.
When we employ your team, we itemise salary and allowances separately for exactly this reason. Model the effect in the employer cost calculator and read the tax rates in personal income tax 2026.
Sources: Decree 253/2026/ND-CP; Circular 87/2026/TT-BTC; Law on Social Insurance 2024 (41/2024/QH15).
Questions
Tax-free allowances: frequently asked questions
How much meal allowance is tax-free in Vietnam?
Up to ₫1,200,000 a month in cash from 1 July 2026. Meals provided in kind are fully exempt.
Is overtime pay taxable in Vietnam?
Only the normal-pay part. The premium paid above normal pay for overtime and night shifts is exempt.
Are allowances included in social insurance?
Most allowances listed here sit outside the social-insurance base, but allowances tied to the job or position generally count, so each needs checking.
Why must allowances be listed separately?
An allowance folded into one salary figure is treated as salary. The exemption applies only when it is named and paid as a genuine allowance.
Hiring in Vietnam? We handle all of this as your employer.
Nhân Kiệt employs your team, runs payroll, insurance, tax and work permits. Fee: US$99–199 per employee a month, plus VAT.
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