Tunjangan Hari Raya (THR) is indeed a bonus that is always awaited, especially for those who are going home or simply shopping for Eid needs.
The THR is an obligation that must be given by employers to workers ahead of religious holidays, with the provision of using money not in the form of basic necessities or parcels. Then the question is, is THR also taxed? The answer is yes. The Ministry of Manpower (Kemnaker) explains that THR is the income of workers as well as the object of income tax or PPh 21, especially for individual taxpayers. So, how is the THR tax deduction provision? Check out the full explanation in the following article.
How much is the THR?
Before discussing further about the tax provisions, it is necessary to know that the provision of religious holiday allowance has been regulated in Government Regulation No. 36 of 2021 to PP 51/2023 concerning Wages, and Minister of Manpower Regulation No. 6 of 2016 concerning holiday allowance for workers/laborers in companies. The amount of THR as stipulated in the Circular Letter of the Minister of Manpower No.M/2/HK.04/III/2024 concerning the Implementation of Providing Religious THR in 2024 for Workers/Laborers in Companies, as follows:
| THR Recipient | Tenure/Wage | THR amount |
| Workers/Laborers | 12 months or more | 1 month salary |
| Workers/Laborers | 1 month but less than 12 months | Proportional (length of service: 12×1 month salary) |
| Casual Workers/Laborers | 12 months or more | 1 month’s salary is calculated from the average wage in the last 12 months before the religious holiday |
| Less than 12 months | 1 month’s salary is calculated from the average wage received each month during the period of employment | |
| Workers/Laborers | Wages based on unit results | 1 month’s wage calculated from the average of the last 12 months before the religious holiday |
How Much Percentage of THR Tax?
THR tax is a tax imposed on income in the form of holiday allowances received by employees or workers. This is as stipulated in the Regulation of the Director General of Taxes No. PER-16 / PJ / 2016 concerning Technical Guidelines for Procedures for Withholding, Depositing and Reporting Income Tax Article 21 and / or Income Tax Article 26 in Connection with Work, Services and Activities of Individuals. Article 5 states that the income deducted by ITA 21 and/or ITA 26 includes regular and irregular income. One form of irregular income is in the form of THR. Yes, recently the public has been shocked by the amount of THR tax deduction when using the average rate scheme (TER) of Income Tax 21. Indeed, using the TER scheme, if permanent workers receive THR, they will be subject to Income Tax 21 at a monthly effective rate or TER that is greater than the previous months. This has been regulated by the latest provisions, namely Government Regulation (PP) Number 58 of 2023 along with its derivative provisions, namely Minister of Finance Regulation (PMK) Number 168 of 2023.
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For example, a permanent worker with a married status without children (PTKP K/0) receives a monthly income of IDR 10 million and is subject to the relevant month’s TER rate of 2 percent. So that the amount of Income Tax 21 payable for the month concerned is IDR 200 thousand. However, in April the employee also receives an THR of Rp10 million, so that his gross income becomes Rp20 million and is subject to a TER rate of 9 percent. For this reason, the amount of Income Tax 21 payable that month is Rp1.8 million. Even so, Director of Taxation Regulation I Hestu Yoga Saksama said that although the tax deduction will be greater due to the THR, the amount of PPh 21 deduction in a year will remain the same or not add a new tax burden.
KH Contact
This is the explanation of the THR tax deduction provisions. So, if your KH Friend runs a business or company, it is mandatory to pay THR and make tax payments in accordance with applicable regulations, yes! Also, make sure that the THR provisions and policies are outlined in the employment contract so that it can protect the company and workers from the risk of disputes in the future. For that, you can utilize Digital Business Assistant (DiBA) to fulfill your business needs. Together with DiBA, Sobat KH can make PKWT and PKWTT employment agreements and take care of tax administration. No need to hesitate because the services at Kontrak Hukum are lawyer approved and can be completed in just 48 hours, 100 percent online without face-to-face so that it is guaranteed safe, easy, and certainly affordable.
ALSO READ: What is the THR Provision for New Employees?
Let’s fulfill all business needs by visiting the KH – DiBA Services page. If you still have questions, feel free to consult for free at Ask KH or send a direct message (DM) to Instagram @Kontrakhukum.
