TaxSavvyID

Payroll tax on THR

THR dipotong PPh 21 berapa?

The situation

THR is taxable income added to the month it is paid. Under TER, that month's gross rises and so does the rate band.

The law

  • PP 58/2023 on Article 21 withholding rates: Monthly PPh 21 for January to November uses average effective rates (TER) by PTKP category; December uses the Art 17 rates on the year's income
  • PMK 168/2023 on Article 21 and 26 withholding: Procedures for PPh 21 and 26 on employment and other pay, including TER categories A, B and C and the year end recalculation
  • Minister of Manpower Regulation 6/2016 on religious holiday allowance (THR): Workers with 1 month or more of service get THR; 12 months or more get 1 month's wage, less get a pro rata share; pay at least 7 days before the holiday

What it means for you

Example: salary IDR 8 million plus THR IDR 8 million makes IDR 16 million gross that month; the TER band for IDR 16 million is higher than for IDR 8 million. December recomputation then evens out the year.

What to do

  1. Add THR to that month's gross.
  2. Apply the TER band for the total.
  3. Explain to staff why tax rose.
  4. True up in December.

Do not tax THR separately at a flat rate.

We can do this for youMonthly payroll tax (PPh 21 and 26) with TER rates, December true up and annual slips: IDR 2.750.000

Related