Internship Programme Participants' Allowances Tax-Free Until December 2026

Jakarta — Participants in the government internship programme are subject to income tax on earnings received, specifically article 21 income tax (PPh 21). However, this tax is covered by the government, ensuring that interns receive their full allowances without deductions. This means they are effectively exempted from tax obligations.

According to official sources, the regulations concerning taxable income for government internship programme participants are set out in Finance Ministry Regulation (PMK) Number 6 of 2026, which governs article 21 income tax on earnings of university graduate interns funded by the government.

“This means tax is still calculated and withheld, but paid by the government,” it was explained on Friday (13 March 2026).

The groups eligible for the government-funded PPh 21 facility include recent university graduates participating in approved government internship programmes, those with a tax identification number (NPWP) or national identity number integrated with the tax authority, and those not receiving other PPh 21 government-funded incentives.

The income subject to PPh 21 covered by the government includes: internship allowances or compensation, contributions to occupational accident insurance (JKK) and occupational health insurance (JKM), and other income paid by the government. All of this is calculated as gross income.

Regarding calculation methodology, article 21 income tax is withheld by multiplying gross income by the PPh tax rate according to article 17, paragraph (1), letter (a) of the Income Tax Law.

For example, if an intern receives gross income of IDR 4,413,561, this is multiplied by the 5 per cent PPh 21 rate, yielding IDR 270,678. This tax amount is then covered by the government.

“Consequently, internship programme participants receive their full income.”

This tax incentive applies from October 2025 through December 2026, meaning that during this period, article 21 income tax for government internship programme participants is borne by the state.

Interns are not required to file annual tax returns if their annual income falls below the taxable income threshold (IDR 54 million per year) and they have no business or self-employment income. However, should they file and overpayment results from the government-funded tax benefit, no refund will be issued.