The Formula For Calculating Employee Taxes 2024: Here's How

Formula Of Employee Tax Calculation 2024 (Camanggastar-Freepik Image)

The Directorate General of Taxes (DJP) of the Ministry of Finance emphasized that the procedures for calculating income tax rates for article 21 or PPh 21 employees will change starting January 2024. The calculation scheme will use an average efficient tariff (TER).

The Director General of Taxes at the Ministry of Finance, Suryo Utomo, said that the legal basis is a kind of government regulation and the regulation of the minister of finance is only signed.

"God willing, it will be signed and issued in the future," said Suryo as quoted from his statement, Monday (27/11/2023).

This efficient tariff does not only apply to the Taxpayers of individual employees, but also for employees of general criteria and PNS/TNI-POLRI. Then, what is the technique of calculating PPh using TER?

The new formula for calculating the upcoming PPh tariff is TER x Gross Income for the tax period is not only the last tax period. On the other hand, the last tax period uses a tariff of Article 17 paragraph 1 letter a of the PPh Law, for the amount of gross income minus the position budget or retirement, pension contributions, and PTKP.

This efficient rate has taken into account Non-Taxable Income (PTKP) for each type of PTKP status such as unregistered marriages, marriages, and marriages and partners working with the number of dependents that have not yet been owned.

Thus, in the TER calculation format, it will be accompanied by the issuance of a table book of PTKP which refers to Chapter III of Article 7 of Law No. 7 of 2021 concerning Harmonization of Tax Regulations.

The table will be compiled down the PTKP status category such as No Marriage, Marriage, Marriage and Partner Work. After that, it is arranged to the side of the total number of dependents using the symbols TK/0-TK/3, K/0- K/3, and K/I/0-K/I/3. On the other hand, the nominal for TK/0 is Rp 54 million, K/0 is Rp 58.5 million, and K/I/0 is Rp 108 million.

Sourced from the HPP Law, the PPh rate for private people itself has been inaugurated as much as 5 tariffs from the previous one in the 4th PPh Law. The accumulation of one tariff arrangement in the HPP Law for the highest income is Rp 5 billion and above subject to 35% dance.

Thus, the current income tax tariff is for a year to Rp. 60 million at 5%, above Rp. 60 million to Rp. 250 million 15%, Rp. 250 million to Rp. 500 million 25%, Rp. 500 million to Rp. 5 billion 30%, and above Rp. 5 billion 35%.

The following is an illustration of the comparison of the latest PPh calculation of Article 21 and which is currently valid:

Retto is a taxpayer for a private person with the status of marriage and without responsibilities. He works as a permanent employee at PT Jaya Abadi. Retto received an income of IDR 10,000,000.00 per month.

With the current PPh cutting mechanism, the calculation is as follows:

With an income of IDR 10,000,000 minus a position fee of 5% x IDR 10,000,000, which is IDR 500,000, then Retto's net income for a month is IDR 9.500.000.00. There is also a net income a year calculated as follows:

12 x Rp9,500,000.00 = Rp114,000,000.

By taking into account Retto's status, PTKP for a year Retto is categorized as dependent marriage or with a table symbol K/0. Akhrinya, the total reduction in net income a year was reduced by IDR 58,500,000 so that the nominal taxable income a year became IDR 55,500.000.

Thus, the total PPh Article 21 is owed a calculation of 5% x Rp55,500,000 with a result of Rp2,775,000 and Article 21 PPh per month is Rp2,775,000:12 with a final total of Rp231,250.

Sourced on the status of PTKP and the amount of gross income, the employer calculates Article 21 of Retto's PPh using the Effective Tariff of Category A at a rate of 2.25%. Thus, the number of PPh cuts in Article 21 for Retto's income is:

January-November: IDR 10,000,000.00 x 2.25%= IDR 225,000.00/bln

December: IDR 2,775,000- (IDR 225,000.00 x 11)= IDR 300,000.00

There is also a difference in cuts of IDR 75,000.00.

So after knowing the formula for calculating employee taxes in 2024, see other interesting news on VOI.ID, it's time to revolutionize news!