KH friends must be familiar with freelance work, especially in this era of technology. Freelancers are workers who are not tied to one particular company. That way, a freelancer can work on projects from several companies at one time. Then related to taxes, is a freelancer also required to pay income tax? Yes, quoting the official Indonesia.go.id page, although not tied to a particular company, freelancers are still considered to have a job because they make money from the work they do. For this reason, the government still imposes income tax on freelancers and is required to report it annually like other workers. Well, there are several types of freelancers who are subject to income tax, namely:
- Researcher, author, and translator
- Supervisor
- Insurance agent
- Sportsman
- Advertising agency
- Intermediary
- Experts such as notaries, actuaries, lawyers, consultants, accountants, doctors, architects, and appraisers
- Teachers, counselors, lecturers, and advisors
- Dancers, dramatists, advertisement stars, movie stars, musicians, comedians, soap opera stars, directors, film crew, singers, performers, and presenters
- Multi level marketing, direct selling, and the like
- Merchandise picker
Legal Basis
As explained, freelancers are also required to report income tax annually like other workers. Well, the main legal source is the Net Income Calculation Norm or NPPN. This legal basis and norm is then used as a source of income tax calculation that will be charged to freelancers. However, there are several requirements that must be met before using NPPN for freelancers, namely:
- Individual taxpayers with gross circulation income or gross turnover of less than IDR4.8 billion in one year. This has been regulated in Article 14 of Law No. 36 Year 2008 on Income Tax and Government Regulation No. 46 Year 2013 which states:
- Individual taxpayers who wish to use NPPN in calculating net income must notify the Director General of Taxes or the nearest Tax Office within the first 3 months of the relevant tax year.
- Individual taxpayers who are required to keep records and receive income are not subject to final income tax, but calculate net income using the NPPN norm.
How to Calculate Freelancer Income Tax
Unlike full-time workers who are bound by contracts and whose taxes will be paid directly by the company, freelancers must calculate their tax reporting independently or self-assessment. Self assessment is an authority for freelancers to calculate income tax for a year and then report it themselves. Here’s how the self-assessment system works:
- The tax payable will be calculated by the taxpayer.
- After calculating taxes from their income, freelancers are required to pay taxes and report them independently.
- The government does not need to issue tax assessment letters all the time. The government only issues them when freelancers forget to pay income tax or are late in filing their annual tax returns.
Freelancers can calculate income tax by using the calculation norms that have been determined by the government. This income tax calculation norm is determined based on the type of work or business. The percentage of income tax calculation norms is divided into three groups, namely:
- 10 Provincial Capitals (Jakarta, Bandung, Medan, Palembang, Semarang, Surabaya, Denpasar, Manado, Makassar, and Pontianak).
- Other Provincial Capitals.
- Other regions.
The amount of the progressive rate of individual income tax as stipulated in Article 17 of Law No. 36 of 2008 is:
- 5% for taxable income up to IDR 50 million per year.
- 15% for taxable income of IDR 50 million – IDR 250 million per year.
- 25% for taxable income of IDR 250 million – IDR 500 million per year.
- 30% for taxable income above IDR 500 million per year.
Example of Calculating Freelancer Income Tax
For example, an unmarried freelancer works as a notary in Jakarta. His freelance work income is Rp 8 million in a month. This means that his total gross income in a year, Rp 12 million multiplied by 12 months, is Rp 144 million. Then, how to calculate freelance income tax using NPPN is as follows:
Net Income Formula
To calculate it, you can use the following formula: Net Income = Gross Income in a Year x 50% Net Income = Rp 144 million x 50% = Rp 72 million.
Taxable Income Formula (PKP)
To calculate taxable income, you can use the following formula: PKP = Net Income – PTKP Well, this PTKP can change in accordance with regulations issued by the Minister of Finance. The detailed amount of PTKP can be seen in PMK Npo. 101 Year 2016. The current PTKP amount is still the same as in previous years, which is IDR 54 million per year for unmarried taxpayers. Therefore, PKP = IDR 72 million – IDR 54 million = IDR 18 million.
Formula for Calculating Income Tax (PPh)
To calculate income tax, you can use the following formula: Income Tax = Progressive Rate of Personal Income Tax x PKP Income Tax = 5% x IDR 18 million = IDR 900 thousand. Well, this amount of Rp900 thousand is what a freelancer must pay to the government.
KH Contact
This is an explanation of the rules and how to calculate income tax for freelance workers. Don’t miss or miscalculate the income tax amount! Calculating income tax is indeed a bit complicated, especially if KH Friend lacks knowledge about taxation. Therefore, the use of consulting services such as Kontrak Hukum will certainly greatly facilitate and benefit freelancers or other personal taxpayers who must calculate taxes independently. How not, with the Digital Business Assistant (DiBA) service from Kontrak Hukum, KH pals feel like they have a complete team that can help you take care of taxation and of course it is much more efficient and efficient than using the services of a firm, googling yourself, or using software. Not only that, for KH Pals whose freelance work requires legal, accounting, and taxation services can also take care of it at once at Kontrak Hukum, you know! Interested in trying out Kontrak Hukum’s services? Immediately visit the page https://kontrakhukum.com/semua-layanan/ If you have further questions about taxation or other legal needs, KH Pals can also contact Kontrak Hukum via the following link Ask KH.
