PIT Exemption for Overtime Income Earned in December 2025 but Paid in January 2026
RegHub explainer by New MarketerLast updated:
Based on:Luật Thuế thu nhập cá nhân số 109/2025/QH15; Thông tư số 111/2013/TT-BTC - Ministry of Finance
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The Ho Chi Minh City Tax Department responds to a query about whether overtime pay earned in December 2025 but paid in January 2026 qualifies for PIT exemption under the new Personal Income Tax Law. Under Clause 8, Article 4 of PIT Law No. 109/2025/QH15, overtime pay and night-shift pay are exempt from PIT. Since the payment was made in January 2026 (the 2026 tax period), the tax authority determines this income falls under Law No. 109/2025/QH15 and is therefore PIT-exempt.
Applicable Regulations
Based on Clause 8, Article 4 of PIT Law No. 109/2025/QH15 dated 10 December 2025 (applicable from the 2026 tax year):
- Night-shift pay, overtime pay, and pay for untaken leave entitlements are PIT-exempt income.
Based on Article 8 of Circular 111/2013/TT-BTC on the timing of taxable income recognition:
- The income recognition date is when the organization or individual pays the income (not when the income accrues)
Conclusion
Since the December 2025 overtime pay was actually paid in January 2026, the income falls in the 2026 tax period, is governed by Law No. 109/2025/QH15, and is therefore PIT-exempt.
Regarding previously withheld tax: The company may seek a refund or credit against subsequent periods under applicable tax administration law.