The Hari Raya Allowance (THR) must be given to employees of every company in Indonesia ahead of the Christmas or Idul Fitri religious holidays.
The provision of THR is regulated as mandatory in Minister of Manpower and Transmigration Regulation No. 6 of 2016 concerning Religious Holiday Allowances for Workers or Laborers in Companies.
Employers that do not provide THR may be subject to administrative and criminal sanctions. The amount is usually around one month's salary or the equivalent of the employee's basic salary, depending on the company's policies and financial conditions.
The following is the THR calculation for 2024!
An employee’s THR can vary depending on their length of service. The following is an explanation of how to calculate an employee’s THR based on their length of service:
1. Employees with less than one year of service: The THR is calculated pro rata based on the number of months worked. For example, if an employee has worked for six months since the previous THR, the THR given is half the THR for an employee with a full year of service.
Formula:
Working period: 6 months
Monthly income: IDR 5,500,000
THR allowance: (6 x IDR 5,500,000 / 12 = IDR 2,750,000
2. Employees with one full year of service or more: Usually, employees who have worked one year or more are entitled to a full THR, the amount of which is in accordance with company regulations or applicable regulations.
Formula:
Work period: 1 year
Monthly income: IDR 7,500,000
THR allowance: (12 x IDR 7,500,000) / 12 = IDR 7,500,000
The updated Government Regulation (PP) Number 14 of 2024 concerning Holiday Allowances and Thirteenth Month Salaries to State Employees, Pensioners, Pension Recipients, and Benefit Recipients in 2024, can be downloaded here.
Is THR subject to Tax?
The Ministry of Manpower (Kemenaker) says that THR is included as income and is subject to income tax, or PPh 21, especially for individual taxpayers. The legal basis is the Director General of Taxes Regulation No. PER-16/PJ/2016.
PPh 21 deductions for THR salaries and bonuses are not the same for each employee. Apart from depending on the amount of tax imposed, PPh 21 deductions are also influenced by the ownership of a taxpayer identification number (NPWP).
Holiday allowance is calculated more easily with the help of Moores Rowland Payroll Services.
For HR departments that still manage their administration manually, calculating holiday allowances (THR) for each employee takes a lot of time, especially if the number of employees is in the hundreds or thousands.
If a company is late in paying THR, it will be subject to sanctions. In accordance with Minister of Manpower and Transmigration Regulation Number 6 of 2016 Article 10, employers who are late in paying THR to employees or laborers will be subject to a fine of 5% (five percent) of the total THR to be paid.
Moores Rowland Indonesia offers payroll services that make it easier for a company’s Human Resources department to calculate monthly salaries, overtime, and holiday allowances in detail and precisely.
Consult your company's payroll needs now and send us an email for consultation: contact-jakarta@moores-rowland.com or contact-bali@moores-rowland.com.
**By: Stefani W. Anggraeni — Marketing Communications Manager & Social Media Specialist
---------------
