Income Tax
Indonesian/Resident Employees
- Stay more than 183 days in a calendar year
- Progressive tax rate (0 – 35%)
An individual is regarded as a tax resident if one fulfils any of the following conditions:
- Resides in Indonesia.
- Present in Indonesia for more than 183 days in any 12-month period.
- Present in Indonesia during a fiscal year and intends to reside in Indonesia.
Non resident employees
- Stay less than 183 days in calendar year
- Fixed Tax Rate (20%)
Treatment of Income Tax:
Taxable income – scope of taxation
The object of tax is any additional economic capabilities received or obtained by the Taxpayer, whether originating from Indonesia and from outside Indonesia, which can be used for consumption or for increase the wealth of the taxpayer who concerned, by name and in any form.
Employment income is includes salaries, overtime, bonuses, and any type of allowance (e.g. housing, leave allowance).
Benefits in kinds (BIKs) are generally taxable in the hands of the employee. An exception applies to BIKs that are required for the execution of a job, the cost of providing BIKs in certain areas, food and drink provided to all employees, BIKs financed from the government’s budget, and certain types of BIKs with a certain threshold.
Non Taxable income – Deduction
The non taxable income is the amount that will deduct from the total income. Total of taxable income is from total income minus the non taxable income. The non taxable income are:
- Occupational expenses (5% of gross income, maximum IDR 500,000 per month);
- Employee contribution to BPJS Manpower for Old Age Saving and Pension Fund;
- Personal Relief
- Tax Payer = IDR 54,000,000 per annum
- Wife = IDR 4,500,000 per annum
Dependant (Max 3 person), each = IDR 4,500,000 per annum
- January – November using Effective Rate
- December / last month of employment using tax art 17 (same as previous year)
An Overview of Monthly Tax (Effective Rate):
| Categorized | Marital Status | 0% Rate |
|---|---|---|
| TER A | S/0, S/1 and M/0 | Up to 5,400,000 |
| TER B | S/2, M/1 and M/2 | Up to 6,200,000 |
| TER C | M/3 | Up to 6,200,000 |
An Overview of Income Tax (Annual):
Income Tax Table 2022 (UU HPP)
| Income | Rate | Taxable Income 250 mil / year | Taxable Income 250 mil / year |
|---|---|---|---|
| 0 – 60 million | 5% | 60 mil x 5% = 3 mil | 60 mil x 5% = 3 mil |
| > 60 – 250 million | 15% | 190 mil x 15% = 28,5 mil | 190 mil x 15% = 28,5 mil |
| > 250 – 500 million | 25% | 250 mil x 25% = 62,5 mil | |
| > 500 million – 5 billion | 30% | 250 mil x 30% = 75 mil | |
| > 5 billion | 35% | ||
| Total Tax 31,500,000 | Total Tax 169,000,000 |
An Overview of Income Tax for Severance:
| Taxable Income | Rate | Severance Pay IDR 20 Million | Severance Pay IDR 200 Million |
|---|---|---|---|
| 0 – 50 million | 0% | 20 mil x 0% = 0 | 50 mil x 0% = 0 |
| > 50 – 100 million | 5% | – | 50 mil x 5% = 2,500,000 |
| > 100 – 500 million | 15% | – | 100 mil x 15% = 15,000,000 |
| > 500 million | 25% | – | |
| Total Tax 17,500,000 |
Schedule of Income Tax:
Tax Period in Indonesia
- The fiscal year period is from January – December.
Tax Payment for tax art 21 & 26
- 15th of the following month, if the 15th falls on the weekend and public holiday then the payment can do on the next working day.
Tax Reporting for tax art 21 & 26
- 20th of the following month, if the 20th falls on the weekend and public holiday then the reporting can do on the next working day.
Year End Tax Filing
- Employer will issue the 1721A1 form as the annual income tax report for the employee.
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Understanding the income tax rules and regulations in Indonesia is crucial for ensuring compliance and effective financial planning. By adhering to tax regulations and implementing best practices, individuals and businesses can optimise their tax liabilities and avoid penalties.
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Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of Indonesia employment laws and regulations, please visit the official governmental websites.
Updated on: August 2025
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