Tax on THR for the worker
THR saya dipotong pajak. Kok besar?
The situation
THR is added to that month's pay for PPh 21. With TER, the higher monthly total falls into a higher band.
The law
- Art 21, Law 7/1983 on Income Tax (PPh Law), as last amended by Law 6/2023: Employers withhold tax on wages and other pay to resident individuals; the rate is 20 percent higher for payees without an NPWP
- 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
What it means for you
The December recalculation evens out the year, so total tax for the year follows the annual rates. Example: monthly salary IDR 10 million plus THR IDR 10 million gives IDR 20 million that month.
What to do
- Check the month's payslip.
- Remember December recalculation.
- Ask HR for the annual computation.
- Use the BPA1 slip for your return.
Do not treat THR as tax free.
We can do this for youReligious holiday allowance (THR): who qualifies, the amount, timing and tax: IDR 1.000.000