Income Tax 21 on Regular Income

Regular income for permanent employees is income for permanent employees in the form of salaries and wages, all kinds of benefits, and rewards under any name that are given periodically based on conditions set by the employer, including overtime pay.

1) Gross income and monthly net income

  1. a) To calculate Income Tax 21 on the income of permanent employees, first look for all gross income received or earned during a month, which includes all salaries, all types of benefits, and other regular payments, including overtime pay and similar payments.
  2. b) For companies enrolled in the Social Security program, the work accident insurance premium, the death insurance premium, and the accident maintenance insurance premium paid by the employer constitute income for employees. The same provisions apply to health insurance premiums, work accident insurance, life insurance, endowment insurance, and scholarship insurance paid by employers for employees to other insurance companies. In calculating PPh 21, the premium is combined with the gross income paid by the employer to the employee.
  3. c) Next, the total monthly net income is calculated by subtracting the monthly gross income from office fees, pension contributions, Old Age Security contributions, and Old Age Allowance contributions paid by the employee himself through the employer to the Pension Fund, which has been approved by the Minister of Finance, or to the Social Security Program Agency.

The amount of office fees that can be deducted from gross income for calculating income tax deductions for permanent employees is set at 5% (five percent of gross income, a maximum of Rp. 6,000,000 (six million rupiah) a year or Rp. 500,000 (five hundred thousand rupiah) a month .

Pension contributions or old age benefits, namely contributions related to salaries paid by employees to pension funds whose establishment has been approved by the Minister of Finance, or the organizing body for old age benefits, which is equivalent to a pension fund whose establishment has been approved by the Minister of Finance,

The amount of deductible pension costs and gross income for the calculation of the income tax deduction for pensioners is set at 5% (five percent) and gross income, a maximum of Rp. 2,400,000 (two million, four hundred thousand rupiah) a year or Rp. 200,000 (two hundred thousand rupiah) a month.

Non-taxable income

calculated based on the conditions at the beginning of the year

WP = 54,000,000
Marital Status = 4,500,000
Working wife = 54,000,000
Max. 3 people = 4,500,000

The rates of Article 17 of the Income Tax Law are as follows:

Tariff Taxable Income Layer

Up to IDR 50,000,000 = 5%
Above IDR 50,000,000 - IDR 250,000,000 = 15%
Above IDR 250,000,000 - IDR 500,000,000 = 25%
Above IDR 500,000,000 = 30%

Income Tax 21 for Non-Permanent Employees

For income received or earned by non-permanent employees or freelance workers in the form of daily wages, weekly wages, unit wages, piece wages, and daily allowances, as long as the income is not paid monthly, the first layer rate as referred to in Article 17 paragraph (1) letter a UU PPh PMK No. 102/PMK 10/2016 10 applies to:

  1. total daily gross income that exceeds IDR 450,000 (four hundred and five thousand rupiah).
  2. The total gross income minus the actual PTKP in terms of the total cumulative income in 1 (one) calendar month exceeds IDR 4,500,000 (four million five hundred rupiah).

In the event that the total cumulative income in one calendar month exceeds IDR 10,200,000.00 (ten million two hundred thousand rupiah). PPh Article 21 is calculated by applying the rate of Article 17 paragraph (1) letter a of the Income Tax Law to the annual PhKP amount. For non-permanent employees or freelance workers, apprentices, and prospective employees who receive wages paid monthly, income tax 21 is calculated by setting the rate of Article 17 paragraph (1) letter a of the Income Tax Law on the amount of annualized gross wages after deducting PTKP, and the amount of income tax 21 that must be deducted is the amount of PPh article 21 as a result of the calculation.

Income Tax 21 for Non-Employee

The applicable rate for calculating PPh Article 21 for non-employees based on Article 17 paragraph (1) in the PPh Law is applied to 50% (fifty percent) of the total gross income for each non-continuous payment of compensation to non-employees. Continuing benefits to non-employees are compensation to non-employees that is paid or payable more than once in a calendar year in connection with work, services, or activities.

Furthermore, the rates based on Article 17 paragraph (1) letter a UU PPh are applied to the cumulative amount of

  1. PhKP of 50% (fifty percent) of total gross income minus monthly PTKP received or obtained by non-employees as long as the person concerned already has an NPWP and only earns income from a working relationship with one Article 21 Income Tax Withholder and does not receive other income.

To be able to get a reduction in the form of PTKP, non-employee income recipients must submit a photocopy of their NPWP card, and married women must submit a photocopy of their husband's NPWP card as well as a photocopy of a marriage certificate and family card.

  1. 50% (fifty percent of total gross income for each payment of compensation to non-employees on an ongoing basis who do not meet the conditions above)