Monitoring The Amount Of The New Employee Tax Rate And How To Calculate It

Lustration of calculating income tax (Freepik)

YOGYAKARTA The government officially regulates the new tariff on employee taxes or income taxes (PPh) for individuals through Law (UU) Number 7 of 2021 concerning Tax Harmonization.

Furthermore, the rules regarding individual income tax rates are regulated in more detail in Government Regulation Number 55 of 2022 concerning Adjustment of Tax Regulations signed by President Joko Widodo on December 20, 2022.

"In line with the tax reform, adjustments have been made to the tax policy arrangements, which are comprehensive, consolidative, and harmonious through Law Number 7 of 2021, concerning Harmonization of Tax Regulations (HPP)," reads the explanation of PP Number 55 of 2022, quoted by VOI Tuesday, December 27, 2022.

It is known that the income tax of individuals or employees in Indonesia has changed since the HPP Law on January 1, 2022.

Now, there is a new policy in calculating HPP.

Based on Law Number 7/2021, income tax is imposed for employees who have an income of more than 4.5 million a month or IDR 54 million a year

This means that income below that value is free from taxes and is only required to report SPT.

In addition, the government also imposes employee tax rates progesively.

Thus, the greater employee income, the greater the tax that must be paid.

Well, the new tax rate in the HPP Law which was enacted in January 2022 has changed from four to five layers. The changes are as follows:

New Calculation of Employee Taxes

Quoted from CNBC Indonesia, the following is a new calculation of employee taxes according to the provisions contained in Law Number 7 of 2021 concerning HPP:

PKP = Income - PTKP

IDR 60 million - IDR 54 million = IDR 6 million

This means that the tax rate paid is sufficient for the layer 1 tax rate, which is 5 percent.

The amount of tax that must be paid by employees earning IDR 5 million per month is:

The tax amount = 5 percent x IDR 6 million = IDR 300,000 per year.

PKP = Income - PTKP

IDR 108 million-IDR 54 million = IDR 54 million

Thus, the tax tariff paid is also sufficient for the layer 1 tax rate, which is 5 percent

The amount of tax = 5 percent x IDR 54 million = IDR 2.7 million per year

PKP = Income - PTKP

IDR 120 million-IDR 54 million = IDR 66 million

Employees who earn IDR 120 million per year will be subject to a layer 1 or 5 percent tax rate of IDR 3 million and a layer of 2 or 15 percent of the remaining IDR 6 million of IDR 900,000.

Total amount of tax: IDR 3,000,000 + IDR 900,000 = IDR 3.9 million.

PKP = Income - PTKP

IDR 180 million-IDR 54 million = IDR 126 million

Just like the income of IDR 10 million/month, employees who are included in this category are also subject to a layer 1 or 5 percent tax rate of IDR 60 million of IDR 3 million and a layer of 2 or 15 percent of the remaining IDR 66 million of IDR 9.9 million.

The total tax amount= IDR 3 million + IDR 9.9 million = IDR 12.9 million per year.

This is information about the amount of new employee tax rates and how to calculate them.