Labour Leaders Furious, Maintain Demand for Tax-Free Annual Holiday Allowance – Threaten Mass Protests

Jakarta – The issue of Hari Raya allowance (THR) has once again come under scrutiny from workers ahead of Eid 2026. Many companies have yet to fulfil this obligation despite the approaching deadline. As of 17 days before Eid, THR payments at numerous companies remain unrealised.

“Our proposal is that it should be paid 21 days before Eid. But until now, many have not paid,” said Said Iqbal, President of the Confederation of Indonesian Workers’ Unions (KSPI), during a press conference on Tuesday, 3 March 2026.

However, he continued, several companies have problems with THR and severance payments, yet have never faced sanctions from the government.

“Name just one company that has been penalised for not paying THR – there is none,” he stated.

Beyond pressing for law enforcement, workers are also demanding that THR not be subject to income tax, given its nature as seasonal supplementary income.

“We are asking the Finance Minister not to impose tax on THR. THR is used for travelling home and Eid expenses,” said Iqbal.

According to him, combining THR with monthly salary often places workers into higher progressive tax brackets.

“When THR is accumulated with wages, the total becomes large and falls into progressive taxation. This burdens workers,” he insisted.

Beyond the THR issue, workers are also highlighting the slow progress on the Labour Law Bill (RUU Ketenagakerjaan), which is described as a mandate from a Constitutional Court ruling.

“For two years the parliament has made promises. Until today it has never been discussed with the government,” said Iqbal.

As a result, workers will stage a protest tomorrow, Wednesday, 4 March 2026, in front of the Ministry of Labour. The action was originally planned to also take place in front of the parliament building or the House of Representatives. However, as parliament is currently in recess with no members or leadership present in the building, the protest will be held at the Labour Ministry.

“We will hold the action at the Labour Ministry office. The number of participants is expected to be between 500 and 1,000 people, as we are still in the Ramadan period,” said Iqbal.