Links Labour Law Insider – Latest Tax, Payroll & Labour Law Updates
Welcome to Links’ Labour Law Insider, our quarterly publication. Our Q3 edition provides a detailed overview of key updates in taxation, labour law, payroll, and visa regulations, offering a clear and comprehensive summary of recent legislative changes to be aware of in Asia Pacific and the Middle East.
For further insights into market developments, we invite you to subscribe to our blog to stay informed on the latest HR news, or contact our team to learn more about how these changes may affect your business.
- Australia
- Australia Increases Minimum Wage and Modern Award Rates From July 2026
- Australia Introduces Payday Super Rules
- Hong Kong
- Hong Kong Enhances Labour Importation Scheme
- Hong Kong Reduces eMPF Platform Fee
- Hong Kong Approves Civil Service Pay Adjusment
- India
- India Revises Central Sphere Minimum Wage VDA Rates
- Indonesia
- Indonesia Introduces New Outsourcing Rules
- Mainland China
- Hubei Updates to Work-Related Injury Insurance Benefits
- China Sets Basic Protections for Overage Workers
- Gansu Updates to Work-Related Injury Insurance Benefits
- Malaysia
- Malaysia EPF Introduces Retirement Savings and Planning Enhancements
- Malaysia Introduces LINDUNG 24 Jam Scheme
- PERKESO’s LINDUNG 24 Jam Scheme Pays Out Over RM1.2 Million in First Month
- New Zealand
- New Zealand Expands English Requirements for Work Visa Applicants
- Saudi Arabia
- Saudi Arabia Raises Qiwa Contract Notarisation Targets
- Singapore
- Singapore CPF Interest Rates Remain Unchanged for Q3 2026
- South Korea
- South Korea Proposes Expanding Workload-Sharing Subsidy
- South Korea’s National Pension Premium Cap Rises to 6.59 Million Won in July
- Taiwan
- Taiwan Clarifies Workplace Sexual Harassment Liability Rules
- Taiwan Launches New OSH Regulatory Framework on 1 July
- Thailand
- Thailand Approves Special Bangkok Public Holiday for World Bank-IMF Meetings
- United Arab Emirates
- UAE Updates Wage Protection System Rules
- Abu Dhabi Expands Paternity and Other Leave Entitlements
- Dubai Introduces Flexible Summer Working Arrangements for Government Employees
- Vietnam
- Vietnam Expands VAT Exemptions
- Vietnam Common Minimum Wage Increase
- Vietnam Raises Tax-Exempt Thresholds to VND 1 Billion
- Vietnam Sets Electronic Labour Contract ID Requirements
- Decree 253/2026/ND-CP Provides Guidance on the Personal Income Tax Law 2025
- Law on Population Effective From 1 July 2026
If you have any questions regarding the content please contact Bella Khan at bella.khan@linksinternational.com or Lynette Liew at lynette.liew@linksinternational.com.
AUSTRALIA
Australia Increases Minimum Wage and Modern Award Rates From July 2026
Effective 1 July 2026, Australia’s National Minimum Wage will increase by approximately 5.97% to AUD26.44 per hour, or AUD1,004.90 per week, following the Fair Work Commission’s 2026 Annual Wage Review decision. Modern award wages will also increase by 4.75%.
The new rates will apply from the first full pay period on or after 1 July 2026 and are expected to affect around 2.8 million low-paid workers. Employers should review employment contracts, audit payroll systems and update applicable pay rates to ensure employees are paid correctly from the relevant pay period.
Australia to Introduce Mandatory Payday Super From July 2026
Effective 1 July 2026, employers in Australia will be required to pay superannuation contributions at the same time as employees’ wages, replacing the current quarterly payment schedule. Under the new requirement, contributions must be received by employees’ superannuation funds within seven business days of each payday.
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HONG KONG
Hong Kong Enhances Labour Importation Scheme
On 15 June 2026, the Hong Kong Government announced the review results and enhanced measures for the Enhanced Supplementary Labour Scheme. Except for measures that remain unchanged or apply to specific contract arrangements, most enhanced measures apply from 16 June 2026 to applications with a Labour Department notice of preliminary screening issued on or after that date.
The enhanced measures include a new tiered vetting mechanism, with Tier 2 applications subject to stricter manning ratio, local recruitment or sector-specific requirements. For selected food and beverage services posts, employers must meet a 3:1 ratio of full-time local employees to imported workers, extend the local recruitment period to 6 weeks, and attend a Labour Department-assigned job fair once every 2 weeks during the recruitment period.
The measures also allow local employees with disabilities to be counted at a 1:1 ratio when calculating the manning ratio for imported workers, raise the accommodation cost deduction ceiling from 10% to 20% of imported workers’ wages, and relax workplace restrictions to allow imported workers to work at business locations in no more than 5 administrative districts. The Labour Department will also strengthen administrative sanctions for serious breaches, including cumulative barring periods of up to 5 years and publication of sanctioned employers’ identities.
Hong Kong Reduces eMPF Platform Fee
Effective 1 April 2026, the eMPF Platform fee will be reduced from 37 basis points, or 0.37%, of the assets under management of an MPF scheme to 29 basis points, or 0.29%. The reduction was approved by the Financial Secretary for the 2026–27 financial year.
Under the straight pass-on requirement in MPF legislation, scheme administration fees charged by trustees must not exceed the eMPF fee paid to the eMPF Company. The reduction therefore applies to MPF scheme administration fees passed on to scheme members.
Hong Kong Approves Civil Service Pay Adjusment
On 16 June 2026, the Chief Executive-in-Council approved a 2% across-the-board pay increase for civil servants in the upper, middle and lower salary bands, as well as the directorate, for 2026–27. The adjustment will have retrospective effect from 1 April 2026.
The Government will submit the 2026–27 civil service pay adjustment proposal to the Legislative Council Finance Committee for consideration.
Seeking to simplify your HR administration and payroll processes in Hong Kong? Contact our professional payroll team now!
INDIA
India Revises Central Sphere Minimum Wage VDA Rates
Effective 1 April 2026, India’s Chief Labour Commissioner (Central) revised the Variable Dearness Allowance rates for employees in scheduled employments under the central sphere. The revised rates are based on the average Consumer Price Index for Industrial Workers increasing from 413.52 to 424.80 as of 31 December 2025.
The updated minimum wage rates vary by scheduled employment, worker category and geographical area. For example, in construction and maintenance of roads, runways, building operations and related works, the Area A daily wage including VDA ranges from ₹821 for unskilled workers to ₹1,094 for highly skilled workers.
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INDONESIA
Indonesia Introduces New Outsourcing Rules
Effective 30 April 2026, Indonesia’s Minister of Manpower Regulation No. 7 of 2026 on Outsourced Employment came into force, setting out the permitted types and sectors of work that may be outsourced.
The regulation covers outsourcing arrangements for cleaning services, food and beverage provision, security, driver and worker transportation services, operational support services, and supporting work in the mining, oil, gas and electricity sectors. It also regulates outsourcing agreements, outsourcing company obligations and supervision requirements.
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MAINLAND CHINA
Hubei Updates to Work-Related Injury Insurance Benefits
Hubei Province has issued the Implementation Measures for Work-Related Injury Insurance in Hubei Province, which will take effect on 1 June 2026. These Measures further set out provisions on work-related injury insurance enrolment and payment, work-related injury determination, disability assessment, benefit payment, and supervision and management, and provide clearer requirements for employers’ responsibilities in work-related injury insurance management.
HR teams should pay attention to the following key points:
- If an employee suffers multiple work-related injuries while continuously working for the same employer, the lump-sum work-related injury medical subsidy and lump-sum disability employment subsidy will be calculated based on the highest disability grade identified for the employee during their employment with that employer.
- When an injured employee receives the lump-sum work-related injury medical subsidy and lump-sum disability employment subsidy, the employee must sign a written agreement with the employer and the handling agency to terminate the work-related injury insurance relationship. After signing the agreement, the employee will no longer be entitled to other work-related injury insurance benefits related to the same injury.
- If an injured employee who cannot care for themselves requires nursing care during the paid work-related injury leave period, the employer must be responsible for the care arrangement. If the employer does not arrange nursing care personnel, it must pay nursing care fees based on the local remuneration standard for nursing personnel of the same level.
China Sets Basic Protections for Overage Workers
Effective 1 July 2026, China’s Interim Provisions on the Protection of the Basic Rights and Interests of Over-Age Workers will introduce protections for individuals who have reached the statutory retirement age, or have retired early under applicable rules, and continue to perform paid work under the management of an employing entity.
The provisions require employing entities to enter into written agreements with over-age workers and extend key protections covering remuneration, minimum wage, rest days, public holidays, overtime, occupational safety and work-related injury insurance. Where overtime is arranged, the same overtime payment standards applicable to full-time employees will apply, subject to the statutory overtime limits.
The provisions do not apply to employees who have formally extended their statutory retirement age by mutual agreement with their employer under relevant rules. Disputes involving remuneration, rest and holidays, occupational safety and work-related injury insurance coverage will follow the standard labour dispute resolution process.
Gansu Updates to Work-Related Injury Insurance Benefits
Gansu Province has issued the Measures for the Confirmation of Paid Work-Related Injury Leave for Injured Employees in Gansu Province, effective from 13 April 2026 and valid for five years. The Measures mainly regulate the confirmation of paid work-related injury leave, extension applications, benefit payment, and nursing care arrangements.
HR teams should pay attention to the following key points:
- If the work-related injury involves multiple injured body parts or organs, the longest applicable paid work-related injury leave period listed in the Classification Catalogue will apply. The leave periods for different injured body parts must not be added together.
- If the injured body part or organ is not listed in the Classification Catalogue, the employer may confirm the paid work-related injury leave period based on the diagnosis certificate issued by a medical institution under the work-related injury insurance scheme. In general, this period must not exceed six months.
- If the injured employee develops an infection or complication due to the original injury, the employer may extend the original paid work-related injury leave period by no more than two months, based on the diagnosis certificate issued by the designated medical institution.
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MALAYSIA
Malaysia EPF Introduces Retirement Savings and Planning Enhancements
On 11 May 2026, Malaysia’s Employees Provident Fund announced three retirement-related enhancements: the introduction of i-Legasi, the rebranding of the monthly payment method under the Age 55/60 Withdrawal as i-Emas, and the rollout of the Retirement Goal Calculator through the KWSP i-Akaun application.
Under i-Legasi, eligible EPF members aged 55 or 60 and above may transfer savings above the Adequate Savings level to immediate family members. Transfers may be made from Akaun 55, or Akaun Emas for members aged 60 and above, into the recipient’s retirement savings account. Eligible recipients are limited to spouses and children who are below the national minimum retirement age and are EPF members who are Malaysian citizens or permanent residents.
The monthly payment method under the Age 55/60 Withdrawal has been rebranded as i-Emas, allowing members to receive automated monthly payments instead of making a full withdrawal. The Retirement Goal Calculator is also available through KWSP i-Akaun to help members estimate their retirement savings needs.
Malaysia Introduces LINDUNG 24 Jam Scheme
Effective from the June 2026 contribution month, Malaysia’s Social Security Organisation has introduced the Non-Employment Injury Scheme, known as LINDUNG 24 Jam, to provide eligible employees with 24-hour protection for accidents occurring outside working hours and not directly related to their employment.
The scheme provides protection for non-employment injuries, including medical treatment costs financed by PERKESO. Contributions are mandatory and fully borne by employees, with phased contribution rates of 0.75% for Phase 1, 1.0% for Phase 2 and 1.25% from Phase 3 onwards, subject to the applicable wage ceiling.
Employers pay the contributions to PERKESO on behalf of employees while the employee remains employed. Contributions for June 2026 must be paid by 15 July 2026, with subsequent monthly contributions due by the 15th day of the following month.
PERKESO’s LINDUNG 24 Jam Scheme Pays Out Over RM1.2 Million in First Month
PERKESO’s new Non-Employment Injury Scheme, LINDUNG 24 Jam, paid out more than RM1.2 million across 592 applications in its first month since launching in June 2026, the bulk going towards medical implant costs (RM1.16 million), followed by temporary disablement benefits (RM99,269). The scheme covers employees round the clock for non-work-related accidents, is mandatory for foreign workers, and voluntary for local staff, with contribution rates phased in from 0.75% to 1.25% over six years.
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NEW ZEALAND
New Zealand Expands English Requirements for Work Visa Applicants
Effective 1 June 2026, New Zealand’s Accredited Employer Work Visa minimum English language requirements will be extended to applicants in ANZSCO and National Occupation List skill level 3 roles. The requirement currently applies to skill level 4 and 5 roles.
The requirement does not apply to Global Workforce Seasonal Visa and Peak Seasonal Visa AEWV applications, or to Job Change applications. Transitional arrangements also apply for existing AEWV holders, including those whose visas expire on or before 1 December 2026 when applying for a further AEWV at skill level 3, and those who have already provided English language evidence in a previous AEWV application.
Migrants applying for an AEWV at skill level 3 from 1 June 2026 must meet the new English language requirements, even where the employer received a job check token before 1 June 2026.
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SAUDI ARABIA
Saudi Arabia Raises Qiwa Contract Notarisation Targets
Effective 30 April 2026, Saudi Arabia’s Ministry of Human Resources and Social Development increased the employment contract notarisation compliance target through the Qiwa platform to 85%. A second phase will raise the required compliance rate to 90% by the end of 30 June 2026.
The compliance rate is calculated by comparing the number of notarised employment contracts with the total number of employees’ contracts within the establishment. The updated requirements apply to private-sector establishments and may affect access to services linked to compliance indicators.
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SINGAPORE
Singapore CPF Interest Rates Remain Unchanged for Q3 2026
From 1 July to 30 September 2026, Singapore’s Central Provident Fund interest rates will remain unchanged. The Ordinary Account interest rate will stay at 2.5% per annum, while the Special, MediSave and Retirement Accounts will continue to earn 4% per annum.
CPF members below 55 years old will continue to receive an additional 1% interest on the first SGD60,000 of combined CPF balances, capped at SGD20,000 from the Ordinary Account. Members aged 55 and above will continue to receive up to 2% extra interest on the first SGD30,000 and an additional 1% on the next SGD30,000.
The CPF Board and Housing & Development Board concessionary housing loan interest rate will also remain unchanged at 2.6% per annum.
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SOUTH KOREA
South Korea Proposes Expanding Workload-Sharing Subsidy
South Korea has announced proposed revisions to the Employment Insurance Act to expand the workload-sharing subsidy programme. From 1 July 2026, the subsidy is expected to apply to employees who cover the duties of colleagues taking 20 days of spousal childbirth leave.
Under the current system, the subsidy applies to employees covering colleagues on parental leave or reduced working hours for childcare. The proposed revision would extend the scope to spousal childbirth leave coverage for small and medium-sized businesses, although the specific subsidy amount for this category has not yet been finalised.
The proposed revisions also include changes to regional and hiring incentives. The reporting deadline for the regional employment promotion subsidy would be shortened from 18 months to 6 months, while the application window for the employment promotion incentive would be extended to 18 months after hiring.
South Korea’s National Pension Premium Cap Rises to 6.59 Million Won in July
South Korea will raise the National Pension income ceiling to 6.59 million won and the floor to 410,000 won starting July 2026, reflecting a 3.4% income growth.
High earners will pay slightly higher premiums (about +20,900 won monthly), though employees share the cost with employers. Middle-income earners (about 86% of subscribers) will see no change unless their income changes.
The adjustment also increases future pension benefits, with the income replacement rate rising to 43%. Overall, the system reinforces a “pay more, receive more” structure to strengthen retirement security.
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TAIWAN
Taiwan Clarifies Workplace Sexual Harassment Liability Rules
On 8 April 2026, Taiwan’s Ministry of Labour amended Article 4-2 of the Enforcement Rules of the Gender Equality in Employment Act to clarify the scope of persons considered equivalent to the highest-ranking official of an organisation for workplace sexual harassment liability purposes.
The amendment identifies six categories of persons who may be treated as having equivalent responsibility, including current or former directors, supervisors, persons holding at least 20% of shares, certain relatives of the representative, persons substantially controlling personnel, finance or business operations, and persons occupying specially important positions. Where such individuals sexually harass an employee, the victim may file a complaint directly with the local competent authority without waiting for the employer’s internal investigation process.
If workplace sexual harassment is confirmed, the individual may be subject to an administrative fine ranging from NT$10,000 to NT$1,000,000.
Taiwan Launches New OSH Regulatory Framework on 1 July
To support the President’s vision of “dignified work” and create a safer and healthier workplace, amendments to the Occupational Safety and Health Act (OSH Act) and 11 supporting regulations took effect on 1 July. The reforms introduce Taiwan’s first legal framework for preventing workplace bullying and strengthen safety-by-design, contractor management, and employer-led safety management, marking a shift from post-incident response to prevention at the source.
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THAILAND
Thailand Approves Special Bangkok Public Holiday for World Bank-IMF Meetings
Thailand has approved 16 October 2026 as a special public holiday in Bangkok for the World Bank-IMF Annual Meetings. The holiday will apply to Bangkok and is intended to support arrangements for the international meetings, which are expected to bring more than 15,000 delegates from 190 countries.
Government agencies in Bangkok will implement work-from-home arrangements from 14 to 16 October 2026. Private-sector employers are encouraged to consider flexible work arrangements during this period, although this remains voluntary for private companies.
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UNITED ARAB EMIRATES
UAE Updates Wage Protection System Rules
Effective 1 June 2026, the UAE will implement Ministerial Resolution No. 340 of 2026 on the Wage Protection System, introducing a revised wage payment compliance framework for private-sector companies licensed with the Ministry of Human Resources and Emiratisation. The resolution repeals Ministerial Resolution No. 598 of 2022.
Key changes include:
- A unified wage due date, with wages for the preceding Gregorian month due on the first day of each Gregorian month;
- An increased WPS compliance threshold, requiring at least 85% of total wages due to workers to be transferred by the due date;
- Workers to be treated as paid where they receive at least 85% of their wages, provided any shortfall results from lawful deductions or withholdings;
- Electronic monitoring from the wage due date, with escalating enforcement measures from the second, fifth, 11th, 16th and 21st day after the due date;
- Expanded WPS exemptions for certain foreign employees paid outside the UAE, Employees subject to liberty restriction orders, and employees holding mission work permits of up to 3 months; and
- Removal of the previous exemption for new employees during the first 30 days from the wage payment due date.
The resolution also permits employers to delegate payroll processing to third parties where the Ministry is provided with the delegate’s details and scope of delegation. Employers remain responsible for timely wage payment and compliance with the resolution.
Abu Dhabi Expands Paternity and Other Leave Entitlements
Effective 1 January 2026, Abu Dhabi’s Human Resources Law No. 8 of 2025 introduced expanded leave entitlements for employees across Abu Dhabi government entities. Paternity leave has increased from 3 days to 6 days, rising to 16 days for fathers of twins or multiple births.
Other leave entitlements under the law include 22 to 30 days of annual leave depending on job grade, 10 days of marriage leave, 3 months of childbirth or adoption leave, 10 days of bereavement leave, up to 15 days of Hajj leave and 12 days of work injury leave. People of Determination receive an additional 5 working days of annual leave.
The law also expands flexible and remote working arrangements for Abu Dhabi government employees.
Dubai Introduces Flexible Summer Working Arrangements for Government Employees
From 29 June to 10 September 2026, Dubai government entities will implement the Our Flexible Summer initiative, introducing two working models for government employees.
Under the first model, employees will work 7 hours per day from Monday to Thursday and 4.5 hours on Friday. Under the second model, employees will work 8 hours per day from Monday to Thursday, with Friday as a day off.
Government entities may also apply approved flexible working hours and remote working arrangements according to their operational requirements and the nature of the work.
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VIETNAM
Vietnam Expands VAT Exemptions
Effective 20 June 2026, Vietnam will implement amendments to its value-added tax rules under Decree No. 144/2026/ND-CP. The amendments expand the scope of VAT-exempt services, including certain life, health, student and other person-focused insurance services, agricultural insurance, insurance for fishing-related vessels and equipment, reinsurance, and specified oil and gas insurance activities.
The sale of debts, including payables and receivables, and the sale of deposit certificates will also be exempt from VAT. The decree further clarifies that VAT will not apply to income earned by agencies acting on behalf of another entity in the sale of VAT-exempt goods or services, and that commission fees earned by insurance brokers will be exempt.
Businesses providing insurance, financial or agency services in Vietnam should review their VAT treatment and invoicing processes ahead of the effective date.
Vietnam Common Minimum Wage Increase
The Government has issued Decree No. 161/2026/NĐ-CP dated 15 May 2026, introducing a revised statutory base salary applicable to employees in the public sector and related entities.
The statutory base salary will increase from 2,340,000 to VND 2,530,000 per month, effective 01 July 2026. As a result of this change, the cap for salary subject to statutory contributions will be adjusted from 46,800,000 VND to 50,600,000.
Vietnam Raises Tax-Exempt Thresholds to VND 1 Billion
Retroactively effective from 1 January 2026, Vietnam has issued Decree No. 141/2026/ND-CP raising several key tax-exempt thresholds to VND 1 billion. The decree doubles the value-added tax exemption threshold and personal income tax exemption threshold for business households to VND 1 billion.
The decree also introduces a corporate income tax exemption for businesses and organisations established under Vietnamese law with annual turnover of VND 1 billion or less. Taxpayers eligible for the corporate income tax exemption may cease making provisional corporate income tax payments, and the decree sets out rules for the refund of overpaid tax amounts.
Vietnam Sets Electronic Labour Contract ID Requirements
Effective 1 July 2026, Vietnam’s Circular No. 08/2026/TT-BNV will introduce detailed requirements for electronic labour contracts under Decree No. 337/2025/ND-CP. The circular establishes a centralised Electronic Labour Contract Platform managed by the Ministry of Home Affairs and requires qualifying electronic labour contracts to be assigned a unique contract ID.
The ID will apply to newly executed electronic labour contracts, converted paper contracts and electronic contracts concluded before 1 July 2026. The ID will remain unchanged throughout the employment relationship, including where the contract is amended, suspended or terminated, and will not affect the contract’s original signing date, content or legal validity.
The circular also sets out requirements for contract submission, identity authentication, timestamped digital signatures, certified electronic data authentication, VNeID integration and labour fluctuation reporting through the Electronic Labour Contract Platform. Electronic contract service providers that have submitted connection applications but have not completed technical integration by 1 July 2026 must complete integration by 20 July 2026.
Decree 253/2026/ND-CP Provides Guidance on the Personal Income Tax Law 2025
The Vietnamese Government has issued Decree No. 253/2026/ND-CP dated 30 June 2026, providing detailed guidance on the implementation of the revised Personal Income Tax (PIT) Law.
The Decree took effect on 1 July 2026 and replaces Decree No. 65/2013/ND-CP, establishing a comprehensive framework for the taxation of individuals, including salary and wage earners.
Key Changes Affecting Employers and Employees:
- Clarification of Tax Residency Rules: The Decree provides additional guidance on determining an individual’s tax residency status, which remains a fundamental factor in establishing the applicable scope and method of PIT assessment. An individual is generally considered a Vietnam tax resident if he or she:
- Is physically present in Vietnam for 183 days or more during a calendar year, or within a consecutive 12-month period commencing from the first date of arrival in Vietnam; or
- Maintains a permanent residence or qualifying accommodation arrangement in Vietnam in accordance with applicable regulations.
Vietnam tax residents are generally subject to PIT on their worldwide income, whereas non-residents are generally taxed only on Vietnam-sourced income under a separate tax regime.
For employers with expatriate employees or globally mobile workforces, it is advisable to closely monitor employees’ presence days and accommodation arrangements to ensure accurate tax residency assessments and payroll withholding obligations.
- Employment Income Subject to PIT: The Decree reaffirms that taxable employment income generally includes all monetary and non-monetary benefits arising from the employment relationship, unless specifically exempt under the law. Examples of taxable employment income include:
- Salaries and wages;
- Bonuses and incentive payments;
- Cash allowances;
- Benefits-in-kind;
- Employer-provided housing and accommodation benefits;
- Employer-paid personal expenses; and
- Other forms of remuneration or economic benefits received by employees.
- Key Tax-Exempt Employment Benefits: The Decree also provides detailed guidance on various categories of employment income and benefits that may qualify for PIT exemption, subject to prescribed conditions and supporting documentation requirements.
- Meal Allowances: Decree 253/2026/NĐ-CP introduces specific guidance on the Personal Income Tax (PIT) treatment of meal allowances and mid-shift meal benefits. Under the new regulations, employer-paid meal allowances will only be subject to PIT to the extent that they exceed VND 1.2 million per employee per month. Additionally, where employers provide meals directly to employees (e.g., via company canteens, meal vouchers, or catering services), such benefits remain non-taxable for PIT purposes. These provisions are effective from 1 July 2026. Employers are advised to review their current meal allowance policies, payroll configurations, and tax withholding practices to ensure compliance with the updated requirements and to fully utilize the available tax exemptions.
- Overtime and Night-Shift Premiums: The portion of compensation paid for overtime work, night-shift work, or work performed on public holidays that exceeds normal working-hour remuneration continues to be exempt from PIT.
- Leave encashment: Personal Income Tax (PIT) is exempt on salary and wage payments made to employees for unused annual leave days, provided that such payments comply with the conditions and payment levels prescribed under Article 113.3 of the Labor Code and the relevant provisions applicable to public officials and public employees.
- Business Travel Reimbursements: Reasonable business travel and related expense reimbursements, when made in accordance with company policies and supported by appropriate documentation, may be excluded from taxable employment income.
- Training Expenses: Employer-sponsored training costs incurred to enhance employees’ professional knowledge, technical expertise, or job-related skills generally remain non-taxable to employees.
- Other Work-Related Benefits: The Decree continues to provide guidance on the tax treatment of certain work-related allowances and benefits, including transportation, relocation, and other operational support benefits, provided the relevant statutory conditions are satisfied.
- Effective Date: The Decree became effective on 1 July 2026, with provisions relating to employment income and business income generally applicable from the 2026 tax year.
Law on Population Effective From 1 July 2026
Population Law 2025, effective 1 July 2026, introduces several enhanced benefits and support measures for women and families with children, including:
- Extended maternity leave for female employees having a second child: Effective 1 July 2026, female employees giving birth to their second child are entitled to 7 months of maternity leave.
- Free prenatal and newborn screening services: Pregnant women and newborns are eligible for free screening for certain congenital and hereditary conditions during pregnancy and after birth.
- Financial support for women giving birth: Under Article 3 of Decree No. 168/2026/NĐ-CP, women from very small ethnic minority groups who give birth on or after 1 July 2026 are entitled to a minimum financial support of VND 2,000,000 per birth.
- Extended paternity leave for male employees: Effective 1 July 2026, male employees whose wives give birth to their second child are entitled to 10 working days of paternity leave.
These measures are intended to strengthen maternal and child health, support family well-being, and encourage sustainable population development.
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If you have any questions with regards to the content in our Labour Law Insider or Links International’s HR Outsourcing services, please contact Bella Khan at bella.khan@linksinternational.com or Lynette Liew at lynette.liew@linksinternational.com.
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