Is THR 2026 Taxed? Here is the Minister of Manpower's clarification.
Ahead of the disbursement of the 2026 Tunjangan Hari Raya (THR), discussions have begun about the taxes levied. Many people are asking whether THR 2026 will be taxed, as in previous years.
The question received a response from the Minister of Manpower, Yassierli. He explained the regulations that underpin the implementation of THR for employees of private companies.
The explanation can serve as an overview of the THR provisions for this year. So, is THR 2026 taxed? Let us read the Minister’s explanation below.
Is THR 2026 taxed?
The answer is yes. THR 2026 for private sector workers or employees is still subject to income tax (PPh) Article 21 in accordance with applicable regulations.
According to detikFinance, the Minister of Manpower Yassierli emphasised that the tax withholding rules for THR remain in effect in 2026.
“Yes (it cannot be tax-free for this year yet), in accordance with the regulations,” Yassierli said at the Coordinating Ministry for Economic Affairs in Central Jakarta, on Tuesday (3/3/2026).
That means the 2026 THR still refers to the Director General of Tax Regulation PER-16/PJ/2016 on the Technical Guidelines for Deductions, Payment and Reporting of Income Tax Article 21 and/or Income Tax Article 26 in relation to Work, Services, and Activities of Individuals.
Thus, THR received by private sector workers remains part of the non-fixed income component subject to PPh Article 21.
So, how large is the THR 2026 tax?
Amount of THR Tax Withholding
Referring to the website of the Directorate General of Taxes, the tax withholding on THR is carried out by applying the Average Effective Rate (TER). The legal basis is Financial Minister Regulation No. 168 of 2023 on Guidelines for Withholding Tax on Income Related to Work, Services or Activities of Individuals and Government Regulation No. 58 of 2023 on the Tax Withholding Rate for Income Tax Article 21 on Income Related to Work, Services, or Activities of Individual Taxpayers.
Under these rules, the THR tax amount refers to the witholding rate for Income Tax Article 21. The withholding rates are divided into five brackets:
Bracket I: income from Rp 0 to Rp 60 million taxed at 5%.
Bracket II: over Rp 60 million up to Rp 250 million taxed at 15%.
Bracket III: over Rp 250 million up to Rp 500 million taxed at 25%.
Bracket IV: over Rp 500 million up to Rp 5 billion taxed at 30%.
Bracket V: over Rp 5 billion taxed at 35%.
How to Calculate THR Tax
The method of calculating THR tax for 2026 remains the same as last year. The calculation combines monthly income with the THR amount received in the month, then applies TER according to the Non-Taxable Income (PTKP) category as follows:
TER A = PTKP: TK/O (54 million); TK/1 & K/0 (58.5 million)
TER B = PTKP: TK/2 & K/1 (63 million); TK/3 & K/2 (67.5 million)
TER C = PTKP: K/3 (72 million)
To illustrate, the following steps show how to calculate THR tax using the example of employee A who has a monthly salary of Rp 5 million and receives a THR equal to one month’s salary in March 2026. The employee is married with no dependents.
- Determine the Monthly TER category
Since employee A is married with no dependents (K/0), he falls into the Monthly TER category A.
- Calculating Total Income in the THR Receipt Month
Next, the monthly salary is combined with the THR received in that month. With a salary of Rp 5 million and THR of Rp 5 million, the employee’s total income in March 2026 becomes Rp 10 million.
- Applying TER according to the income range
Based on the monthly TER category A, income in the range Rp 9,650,001 to Rp 10,050,000 is taxed at 2%.
This tax deduction is used to calculate the THR tax amount.
- Calculating the THR Tax Withheld
At a 2% tax rate, the tax on the employee A’s income in that month would be 2% x Rp 10 million = Rp 200,000. This tax amount will be withheld from the total pay and THR received in March. Thus, the employee A would take home around Rp 9.8 million in that month. Note that the Rp 200,000 tax is not deducted only from the THR but from the ongoing monthly salary as well.
This concludes the explanation on whether THR 2026 is taxed. Hopefully that answers your question!
This article was written by Desi Rahmawati, a participant in the MagangHub Certified Internship Programme from the Ministry of Manpower for detikcom.