THR Tax 2026: Latest Rules, TER Rates, and How to Calculate It
As the Eid period approaches in 2026, the Tunjangan Hari Raya (THR) has become the most anticipated benefit for workers in Indonesia. However, many employees are surprised to receive a net amount lower than expected due to Income Tax Article 21 (PPh 21) deductions on THR. Under the latest regulations in 2026, THR tax calculations follow the Effective Average Tax Rate (TER) scheme. Here is a complete guide to the rules, rates, and how to calculate to help you plan your festive finances more accurately.
Taxation of THR is based on several key rules:
In the TER method, THR is not calculated separately; instead it is combined with the monthly salary. Consequently, the total gross income for the month increases, which often pushes the tax rate into a higher bracket than in the usual months.
The amount of tax you pay depends on the status of your Non-Taxable Income (PTKP). The breakdown:
Andi is a single employee (TK/0 - Category A) with a salary of Rp8,000,000 per month. In March 2026, he receives THR of Rp8,000,000.
If your total annual income (Salary + THR + Bonus) is still below Rp54,000,000 per year, you are not subject to PPh 21.
Some companies use the Gross Up method, whereby the company provides an additional tax allowance so that the THR received by employees remains in line with the base salary.
Yes. Even though tax has been deducted by the company, you must still report all income in your annual tax return using the 1721-A1 withholding slip provided by the company.
Tip: Always request a transparent payslip from the HR department to ensure the tax calculation aligns with your latest PTKP category. (Z-10)
If in 2025 the administrative process took 3 days, digitalisation of service systems has managed to reduce this to just 1 day.
Who is THR tax-exempt in 2026? See details of private sector sectors eligible for PPh 21 DTP incentives and the full THR ASN rules payable without deductions.
Who is taxed on THR 2026? Check the latest TER scheme rules for the private sector and the list of tax-exempt sectors under PMK 105/2025 here.
The Government confirms THR 2026 remains subject to PPh 21. See a TER rate simulation and the schedule for THR disbursement to civil servants and the private sector here.