{"id":22278,"date":"2023-03-16T10:07:00","date_gmt":"2023-03-16T03:07:00","guid":{"rendered":"https:\/\/www.humanica.com\/?p=22278"},"modified":"2026-10-26T14:21:20","modified_gmt":"2026-10-26T07:21:20","slug":"outlining-indonesians-income-tax-law-pph-21-the-calculation-methods","status":"publish","type":"post","link":"https:\/\/www.humanica.com\/en\/outlining-indonesians-income-tax-law-pph-21-the-calculation-methods\/","title":{"rendered":"Outlining Indonesian\u2019s Income Tax Law (PPh 21) & the Calculation Methods"},"content":{"rendered":"

In Indonesia, all residents with income are subject to income tax, or known by Indonesians as PPh (Pajak Penghasilan). There are several kinds of PPh, including PPh 21.<\/p>\n

To be able to pay tax, each taxpayer must first require a Tax Identification Number or Nomor Pokok Wajib Pajak (Wajib Pajak) <\/em>from the Indonesian Tax Office (Direktorat Jenderal Pajak).<\/p>\n

<\/figure>\n

To be able to pay tax, each taxpayer must first require a Tax Identification Number or Nomor Pokok Wajib Pajak (Wajib Pajak) <\/em>from the Indonesian Tax Office (Direktorat Jenderal Pajak).<\/p>\n

Rate of PPh 21 Based on Taxpayer\u2019s Salary<\/h2>\n

To be able to pay tax, each taxpayer must first require a Tax Identification Number or Nomor Pokok Wajib Pajak (Wajib Pajak) <\/em>from the Indonesian Tax Office (Direktorat Jenderal Pajak).<\/p>\n

\n\n\n\n\n\n\n\n\n\n
Annual Income<\/strong><\/th>\nTax Rate<\/strong><\/th>\n<\/tr>\n<\/thead>\n
0 to IDR 60,000,000<\/td>\n5%<\/td>\n<\/tr>\n
Over IDR 60,000,000 up to IDR 250,000,000<\/td>\n15%<\/td>\n<\/tr>\n
Over IDR 250,000,000 up to IDR 500,000,000<\/td>\n25%<\/td>\n<\/tr>\n
Over IDR 500,000,000 up to IDR 5,000,000,000<\/td>\n30%<\/td>\n<\/tr>\n
Over IDR 5,000,000,000<\/td>\n35%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n

However, there are three other components that must be taken into account before calculating PPh 21. These components are non-taxable income, employee healthcare, <\/strong>and functional cost deduction.<\/strong><\/p>\n

1. Non-taxable Income<\/h4>\n

Income that is not subject to taxes. The amount differs depending on the taxpayers marital status and the amount of dependents the person has.<\/p>\n

Non-taxable Income for Single Individuals.<\/h5>\n
\n\n\n\n\n\n\n\n\n
Category<\/strong><\/th>\nNon-taxable Income Amount<\/strong><\/th>\n<\/tr>\n<\/thead>\n
TK\/0<\/td>\nIDR 54,000,000<\/td>\n<\/tr>\n
TK\/1<\/td>\nIDR 58,500,000<\/td>\n<\/tr>\n
TK\/2<\/td>\nIDR 63,000,000<\/td>\n<\/tr>\n
TK\/3<\/td>\nIDR 67,500,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n

TK stands for Tidak Kawin <\/em>or not married. TK\/0 is applied to single individuals with zero (0) dependent, TK\/1 is applied to single individuals with one (1) dependent, and so on with the maximum of three (3) dependents.<\/p>\n

Non-taxable Income for Married Individuals<\/h5>\n
\n\n\n\n\n\n\n\n\n
Category<\/strong><\/th>\nNon-taxable Income Amount<\/strong><\/th>\n<\/tr>\n<\/thead>\n
K\/0<\/td>\nIDR 58,500,000<\/td>\n<\/tr>\n
K\/1<\/td>\nIDR 63,000,000<\/td>\n<\/tr>\n
K\/2<\/td>\nIDR 67,500,000<\/td>\n<\/tr>\n
K\/3<\/td>\nIDR 72,000,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n

K stands for Kawin <\/em>or married. K\/0 is applied to married individuals with zero (0) dependent, K\/1 is applied to married individuals with one (1) dependent, and so on with the maximum of three (3) dependents.<\/p>\n

2. Healthcare and Employee Social Security Program<\/h4>\n

Each company has to cover their employee\u2019s healthcare. One of them is the Employee Social Security Program or Badan Penyelenggara Jaminan Sosial Kesehatan <\/em>(BPJS), <\/em>a health insurance program authorized by the Indonesian government. <\/p>\n

These components are subtracted from the gross income.<\/p>\n

\"\"<\/figure>\n

Functional Deduction Cost<\/h4>\n

Functional deduction cost is a cost that employers collect to maintain company income. The maximum amount is 5% of the employee\u2019s annual gross income or a maximum of IDR 500,000 per month.<\/p>\n

How to Calculate PPh 21?<\/h2>\n

There are three methods to calculate income tax that could affect employee\u2019s salary and company expenses. Those methods are nett, gross, and gross up.<\/p>\n

    \n
  1. Nett <\/strong>\u2013 The company bears the taxes of their employee.<\/li>\n
  2. Gross <\/strong>\u2013 The employee bears their own income tax.<\/li>\n
  3. Gross up<\/strong> \u2013 The company provides tax benefits in the same amount of tax borne by the employee.<\/li>\n<\/ol>\n

    Each employee can choose and negotiate how they prefer to pay their income tax because it will affect their payroll and the company expenses.<\/p>\n

    Let\u2019s go on details with the formula and the calculation here:<\/p>\n

    Nett Method<\/h4>\n

    If this method is applied, employees will receive a net salary because the income taxes will be paid by the company.<\/p>\n

    Example:
    Angela is a single woman (TK\/0) with a monthly salary of IDR10,000,000 <\/strong>or an annual salary of IDR120,000,000<\/strong>. Therefore, her taxable income would be:
    Taxable Income = Annual Salary \u2013 Non-taxable Income
    = IDR120,000,000 \u2013 IDR54,000,000
    = IDR66,000,000 <\/p>\n

    and her income tax calculation would be:
    Income Tax (PPh 21) = Taxable Income x PPh 21 Rate
    = IDR66,000,000 x 15% (Tier 2)
    = IDR9,900,000 per year or IDR825,000 per month<\/strong><\/p>\n

    So, the amount of tax that Angela\u2019s employer has to pay each month is IDR825,000,000 <\/strong>and Angela\u2019s monthly salary is still IDR10,000,000 because there is no further deduction.<\/p>\n

    Gross Method<\/h4>\n

    In this method, employees will receive a gross income because the company hasn\u2019t reduced their salary with taxes and other deductions. Therefore, the employees must pay their own taxes.<\/p>\n

    Example
    Alan is a single man (TK\/0) with a monthly salary of IDR10,000,000 <\/strong>or an annual salary of IDR120,000,000<\/strong>. Therefore, his taxable income would be:
    Taxable Income = Annual Salary \u2013 Non-taxable Income
    = IDR120,000,000 \u2013 IDR54,000,000
    = IDR66,000,000 <\/p>\n

    So, his income tax calculation would be:
    Income Tax (PPh 21) = Taxable Income x PPh 21 Rate
    = IDR9,900,000 per year or IDR825,000 per month<\/strong>
    Consequently, Alan\u2019s nett monthly income would be IDR9,175,000<\/strong><\/p>\n

    Gross Up Method<\/h4>\n

    Using this method means the company will give their employee a tax allowance the same amount of their tax income (PPh 21) in addition to their monthly salary.<\/p>\n

    Example:
    Dian is a single woman (TK\/0) with a monthly salary of IDR10,000,000 <\/strong>or an annual salary of IDR120,000,000<\/strong>. Therefore, her taxable income would be:
    Taxable Income = Annual Salary \u2013 Non-taxable Income
    = IDR120,000,000 \u2013 IDR54,000,000
    = IDR66,000,000 <\/p>\n

    and her income tax calculation would be:
    Income Tax (PPh 21) = Taxable Income x PPh 21 Rate
    = IDR66,000,000 x 15% (Tier 2)
    = IDR9,900,000 per year or IDR825,000 per month<\/strong><\/p>\n

    So, in total, Dian\u2019s income would be IDR10,825,000. But, Angela\u2019s net income would be IDR10,000,000 after deduction.<\/p>\n

    Note:
    These calculations are simplified examples.
    There are other components that might contribute to the calculations.<\/p>\n

    Conclusion<\/h5>\n

    Calculating employees\u2019 income tax and salary can be time intense. With software, like SunFish Workplaze\u2019s Payroll, the whole process and reporting becomes a lot easier, with compliance to regulations built-in. <\/p>\n

    Payroll Technology, like the one embedded in SunFish Workplaze is a powerful tool to greatly ease your payroll burden and ensure accuracy, visit https:\/\/dataon.com\/payroll-management\/<\/a><\/strong> to find out more about SunFish Workplaze Payroll!<\/p>\n

    \"\"
    Payroll Dashboard Look on SunFish Workplaze<\/em><\/figcaption><\/figure>\n

    For more details for demo about SunFish Workplaze Payroll System<\/a>, contact us to info@dataon.com<\/a>. Follow us also on Instagram<\/a><\/strong> and Linkedin<\/a><\/strong>. <\/p>\n

    Source: <\/strong>online-pajak.com<\/p>\n","protected":false},"excerpt":{"rendered":"

    The calculation of income tax law or PPh 21 can be a somewhat confusing. Here, we have spread out three methods of tax calculation. Which one do you prefer?<\/p>\n","protected":false},"author":42,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_gspb_post_css":"","content-type":"","footnotes":"","_yoast_wpseo_title":"","_yoast_wpseo_metadesc":"","_yoast_wpseo_focuskw":"","rank_math_title":"","rank_math_description":"The calculation of income tax law or PPh 21 can be a somewhat confusing. Here, we have spread out three methods of tax calculation. Which one do you prefer?","rank_math_focus_keyword":"","_aioseop_title":"","_aioseop_description":""},"categories":[1],"tags":[],"class_list":["post-22278","post","type-post","status-publish","format-standard","hentry","category-1"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":8}},"acf":[],"_links":{"self":[{"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/posts\/22278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/users\/42"}],"replies":[{"embeddable":true,"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/comments?post=22278"}],"version-history":[{"count":2,"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/posts\/22278\/revisions"}],"predecessor-version":[{"id":22761,"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/posts\/22278\/revisions\/22761"}],"wp:attachment":[{"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/media?parent=22278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/categories?post=22278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.humanica.com\/en\/wp-json\/wp\/v2\/tags?post=22278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}