Update: New Personal Income Tax Rates in Laos (Effective July 2026)
The Lao Ministry of Finance has announced an update to the personal income tax brackets, taking effect on July 1, 2026. Here are the new rates.
On July 3, 2026, the Lao Ministry of Finance (Tax Department) issued Notice No. 5083/เบเบชเบญ regarding the implementation of the updated Income Tax Law (No. 88/NA, dated March 25, 2025).
According to the notice, the new regulations and tax brackets will officially go into effect starting July 1, 2026. Employers must ensure that their payroll systems are updated to reflect these new calculation rates for all salary payouts moving forward.
New Personal Income Tax Brackets
The updated progressive tax rates applied to monthly income (in LAK) are as follows:
| Level | Monthly Income Base (LAK) | Tax Rate | Cumulative Tax at Level |
|---|---|---|---|
| 1 | Up to 2,500,000 | 0% | 0 |
| 2 | 2,500,001 to 5,000,000 | 5% | 125,000 |
| 3 | 5,000,001 to 15,000,000 | 10% | 1,125,000 |
| 4 | 15,000,001 to 25,000,000 | 15% | 2,625,000 |
| 5 | 25,000,001 to 65,000,000 | 20% | 10,625,000 |
| 6 | Over 65,000,000 | 25% | ... |
Key Takeaways for Employers:
- Exemption Threshold: The basic income tax exemption remains at 2,500,000 LAK.
- Payroll Update Required: Please ensure that your accounting and HR teams adjust the salary calculation systems to comply with the new rates starting from the July 2026 payroll cycle.
For any assistance in updating your payroll compliance or understanding how these changes affect your organization, please contact our experts.