Religious holiday allowance (THR): who qualifies, the amount, timing and tax

We list who qualifies, compute full or pro rata THR on the right wage base, add it to that month's PPh 21, and remind you of the 7 day deadline so you avoid the 5 percent fine.

IDR 1.000.000Yearly

For: All employers with permanent or contract workers, including PT PMA and small businesses.

What we need from you

Employee list with start dates and contract type
Service length
Monthly wage: basic and fixed allowances
THR base
Religion and holiday of each worker
Timing
Payroll tax data
PPh 21 on THR
Company rules or collective agreement
May give more than the minimum

What we discuss

Do you pay THR on one holiday for all, or by each worker's holiday?
Law ties it to the worker's religious holiday
Any staff with less than 12 months?
Pro rata
Any daily or piece rate workers?
Different wage base rules
Does your contract promise more than the minimum?
The higher amount applies

What we file

Compute THR
Worker with 7 months service on IDR 6,000,000: 7/12 x 6,000,000 = IDR 3,500,000
Add to PPh 21 for the month
Pay THR

What you get

THR schedule per worker
Tax impact note

The law

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 Source
PP 36/2021 on wages, as amended by PP 51/2023: An employer that pays THR late pays a fine of 5 percent of the THR due, on top of the THR itself Source
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 Source
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 Source

Questions people ask

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