Find out how to calculate taxable amount in Vietnam with this article.
What is indicated by taxable amount?
Taxable amount refers to the total amount from an employee’s gross income subject to taxation. This amount is calculated by subtracting any tax-deductible expenses or allowances from the total gross income. Whereas net pay, which is needed to calculate CTC, refers to the amount of pay an employee is entitled to after all deductions, such as taxes, insurance, and contributions, are made. The calculations are performed as the following:
- Net pay: Gross Income – Employee’s SHUI Contribution – Personal Income Tax
- Cost to Company: Taxable Amount + Employee’s SHUI contribution + Employer’s SHUI contribution + Personal Income Tax + Reimbursement (if any)
However, AYP’s total billing to the client will be formulated as such:
- Total billing: CTC + AYP’s Service Fee + Bank Fee + VAT (8%) + Additional Fee