Question 1

How is PPh 21 (income tax) calculated in Indonesia?

Accepted Answer

Since 2024, Indonesia uses an effective average tax rate (TER) method for monthly PPh 21 withholding, simplified from the previous cumulative method. The final annual tax calculation uses progressive rates: 5% (up to IDR 60 million), 15% (IDR 60-250 million), 25% (IDR 250-500 million), 30% (IDR 500 million-5 billion), and 35% (above IDR 5 billion). Non-taxable income (PTKP) thresholds depend on marital status and dependents.

Question 2

What are BPJS contributions on an Indonesian payslip?

Accepted Answer

BPJS Kesehatan (health): 5% of salary (4% employer, 1% employee, capped at IDR 12 million base). BPJS Ketenagakerjaan comprises: JHT/old-age savings (5.7% total: 3.7% employer, 2% employee), JKK/work accident (0.24%-1.74% employer, rate varies by risk), JKM/death benefit (0.3% employer), and JP/pension (3% total: 2% employer, 1% employee, with a wage ceiling). Only JHT and JP have employee contributions.

Question 3

What is THR and is it shown on a separate payslip in Indonesia?

Accepted Answer

THR (Tunjangan Hari Raya) is a mandatory religious holiday bonus equal to one month's salary for employees with 12+ months of service (prorated for less). It must be paid at least seven days before the religious holiday. THR is subject to PPh 21 income tax. It typically appears on a separate payslip or as an additional line item on the regular monthly payslip for the relevant period.

Question 4

How do I create payslips for Indonesia employees?

Accepted Answer

Indonesian employers must provide a slip gaji (payslip) detailing salary components, deductions, and net pay. Under the Manpower Law (Law No. 13/2003) and its amendments, wages must be paid in Indonesian Rupiah. Employers must register employees for BPJS Ketenagakerjaan (employment social security) and BPJS Kesehatan (national health insurance). Income tax (PPh 21) is withheld at source by the employer.

Pay Frequency

Monthly

Currency

IDR (Rp)

Question 5

Are payslips a legal requirement in Indonesia?

Accepted Answer

Yes. The Manpower Law (Law No. 13/2003) and its amendments require employers to maintain wage records and provide employees with documentation of their wages and deductions. Employers must also comply with BPJS registration and contribution obligations. The Ministry of Manpower can conduct inspections, and non-compliance with payroll documentation requirements can result in administrative sanctions.

Question 6

What deductions must appear on an Indonesia payslip?

Accepted Answer

An Indonesian payslip must show PPh 21 income tax (calculated using the TER method or annual basis), BPJS Kesehatan employee contribution (1% of salary), and BPJS Ketenagakerjaan employee contributions (JHT 2% and JP 1%). Any other agreed deductions such as meal, transport, or loan repayments must also be shown. The gross salary (gaji bruto), total deductions, and net pay (gaji bersih) must be clearly stated.

Question 7

Can I generate payslips for part-time or contract workers in Indonesia?

Accepted Answer

Yes. Fixed-term contract workers (PKWT) and part-time employees are entitled to payslips showing their wages and applicable deductions. PKWT employees must be registered for BPJS if the contract is at least one month's duration. Casual workers (harian lepas) may be paid daily or weekly but are still entitled to documentation of their earnings. Independent contractors (outsourcing) working under a service agreement are typically not entitled to employer payslips.

Question 8

How often should payslips be issued in Indonesia?

Accepted Answer

Payslips must be issued with every salary payment. Indonesian law requires wages to be paid at the agreed intervals stated in the employment contract, which is typically monthly but can be weekly or fortnightly. The THR (Tunjangan Hari Raya) payment for religious holidays must be accompanied by its own payslip or detailed breakdown. Employers must retain payroll records for audit by the Directorate General of Taxes.

Payslip Generator for
Indonesia

Payroll Regulations in Indonesia

Common Deductions in Indonesia

CleverSlip Features for Indonesia

Frequently Asked Questions

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