Purbaya Frees JHT Tax for 1.64 Million Retirees

Jakarta - The Ministry of Finance has announced a tax policy to support the financial protection of retirees. Finance Minister Purbaya Yudha Sadewa stated that the government is providing a special facility in the form of a significantly reduced Final Tax Rate for workers cashing out their Old Age Security (JHT) benefits. This incentive is not a new policy but a long-standing provision.

Through Minister of Finance Regulation (PMK) Number 16 of 2010, the government provides a 0% Final Income Tax (PPh) rate for JHT disbursements up to a nominal value of Rp50 million at retirement. “Based on BPJS Ketenagakerjaan data, out of the JHT claims paid out from January to May 2026, 1,645,469 claims, or 95.45%, had a balance below Rp50 million and were granted the 0% tax incentive,” said Deni Surjanto, Head of the Communication and Information Services Bureau at the Ministry of Finance, on Tuesday.

For participants with JHT balances exceeding Rp50 million, a very light Final PPh rate of 5% is applied to the excess amount, provided the entire disbursement process is completed within two calendar years from the first withdrawal at retirement. The government clarified that JHT contributions are not subject to income tax during the accumulation phase. This measure is intended to encourage workers not to withdraw their funds prematurely, ensuring they receive maximum benefits from the JHT programme upon retirement.