Is THRcut By Taxes? This Is An Explanation From The Kemeaker And The Rules

Illustration of THR (Indonesian Bank)

YOGYAKARTA - The Ministry of Manpower (Kemenaker) asks companies to pay THR to workers no later than 7 days before Eid al-Fitr which falls on April 23, 2023. THR is the holiday allowance salary that workers look forward to every year. Many workers ask whether THR Eid is deducted by taxes?

The amount of THR given to workers can vary depending on the length of the period of service. For employees or employees who have worked for more than 12 months continuously, they will get THR for a number of salaries of one month. Meanwhile, for employees whose work period has not reached one year, the calculation is: how many months the work period is divided into 12 months, then multiplied by the amount of 1 month's salary.

This THR salary is very helpful for workers' finances because the amount is quite large. Especially during Eid al-Fitr, there will usually be a lot of expenditure needs. To ensure the amount of money received, you need to know whether the Eid THR is deducted by taxes?

Reporting from the official Instagram @kemnaker, it is explained that THR is still subject to taxes because it includes workers/labor income as well as income tax objects or PPh21, especially private taxpayers. This rule is contained in the Regulation of the Director General of Taxes No. PER-16/PJ/2016.

Despite being taxed, the VAT 21 cut over THR salaries and bonuses for each worker is not the same. The amount of the cut depends on the number of tax objects imposed and is influenced by the ownership of the Taxpayer Identification Number (NPWP).

"In addition to depending on the amount of the tax object imposed, the PPh 21 cut is also influenced by the ownership of the Taxpayer Identification Number. If the THR passes the Non-Taxable Income, the PPh article 21 will be deducted," wrote @kemnaker.

THR payments in 2023 must be made no later than 7 days before Eid al-Fitr. These provisions are contained in Circular in accordance with Article 5 of the Minister of Manpower number 6 of 2016: Religious HR as referred to in paragraph 1 and paragraph 2, must be paid by employers no later than 7 days before Religious Holidays.

Companies that are late in paying the THR will be subject to sanctions. This rule is contained in the Regulation of the Minister of Manpower of the Republic of Indonesia Number 6 of 2016 concerning Religious Holiday Allowances for Workers/Labourers in Companies. Companies that are late in paying THR will be subject to a fine of 5 percent of the total THR to be paid.

The sanction for imposing the fine also does not eliminate the company's obligation to continue paying THR to its employees or workers. Meanwhile, companies that do not pay THR will be subject to administrative sanctions, namely: written warnings, restrictions on business activities, temporary suspension or part of production equipment, and freezing business activities.

THR can only be given in the form of money and cannot be in the form of goods. THR money must also use the State Rupiah currency of the Republic of Indonesia. This provision is contained in the Regulation of the Minister of Manpower Number 6 of 2016 concerning Religious Holiday Allowances for workers/laborers in companies.

"THR Given In The Form Of Basic Necessities/Parsels, Can't It? Minaker emphasized that it is not permissible for Partners. THR is only given in the form of money provided using rupiah currency," wrote the statement @kemnaker, Thursday (6/4/2023).

That is the explanation of whether the Eid holiday allowance is deducted by taxes. THR salaries include income taxed or as an object of income tax. Because the Eid holiday allowance is included in the category of irregular wages, the THR tax payment is the responsibility of each recipient.

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