Withdrawing BPJS Employment JHT Funds Subject to Tax, Here's the Explanation

Jakarta, CNBC Indonesia - Individuals wishing to withdraw their Jaminan Hari Tua (JHT) funds from BPJS Ketenagakerjaan will be subject to income tax, or PPh 21, in accordance with prevailing Government Regulations and Minister of Finance Regulations. Citing the Instagram account @ditjenpajakri, the imposition of income tax on withdrawn JHT benefits is governed by Government Regulation Number 68 of 2009 and Minister of Finance Regulation Number 16 of 2010. “This rule has been in place for a long time, regulated under Government Regulation Number 68 of 2009 and Minister of Finance Regulation Number 16 of 2010. This income is subject to Article 21 income tax,” the post stated. The post emphasised that JHT tax is not paid monthly when salaries or allowances are disbursed by the employer, but only upon withdrawal. “It must be stressed that this old-age benefit is not included as a component of taxable income deducted monthly, so this old-age benefit has not yet been taxed,” it said. There are two categories of income tax rates for JHT: 1. Withdrawals with a maximum period of two years are subject to a final PPh Article 21 rate of: a. 0% for withdrawal amounts of up to Rp50 million. b. 5% for withdrawal amounts above Rp50 million. 2. If the period exceeds two years, the application of PPh Article 21 is not final, but instead uses the progressive rates of Article 17 of the Income Tax Law. Based on the Income Tax Law Number 36 of 2008 concerning Income Tax, Article 17 paragraph (1), the tax rates applied to Taxable Income for domestic individual taxpayers are as follows: a. 5% for the taxable income bracket up to Rp50 million. b. 15% for the taxable income bracket above Rp50 million to Rp250 million. c. 25% for the taxable income bracket above Rp250 million to Rp500 million. d. 30% for the taxable income bracket above Rp500 million.