Working 10 Years Then Resigning: Here's the JHT Amount Disbursed After Tax Deduction

The imposition of tax on old-age security benefits (JHT) remains in the spotlight, particularly among workers, as the tariff policy is considered unfair. The government will not change the JHT tax policy in the near term as it is still under discussion by the Ministry of Finance. Finance Minister Purbaya Yudhi Sadewa stated that the government has yet to make a decision regarding the proposed abolition of tax on JHT benefits. According to him, the Ministry of Finance is still waiting for data from BPJS Ketenagakerjaan before making a decision. “We are still, we still want to seek data from BPJS, BPJS Ketenagakerjaan. It has not been concluded yet,” said Purbaya. When asked whether a conclusion had been reached on the proposal, Purbaya confirmed that discussions are ongoing and responded briefly: “Not yet.” Separately, Director General of Taxes Bimo Wijayanto admitted he is still awaiting direction on this policy. He noted that input from workers is being reviewed by his office. However, he pointed out that 95 percent of JHT recipients already pay no tax because their benefit value is below the threshold of Rp 50 million. “As the Minister has also conveyed the data, 95 percent of JHT recipients have zero percent tax, because it is below Rp 50 million,” he explained. Bimo further explained that if the policy is implemented, the likely measure would be to raise the taxable threshold to Rp 100 million. He believes this would be understood by workers, BPJS, and the government. “If, for instance, the tax-free JHT threshold is raised from Rp 50 million to Rp 100 million, as instructed, the important thing is that the impact of its implementation is understood by everyone. The people understand, labour unions understand, the relevant ministries understand, and BPJS understands,” Bimo clarified. For information, JHT is a social protection programme from BPJS Ketenagakerjaan providing cash benefits to participants upon reaching retirement age, experiencing total permanent disability, death, or termination of employment. JHT can also be claimed if a worker resigns or leaves Indonesia permanently. The tax deduction policy on JHT is regulated in Government Regulation Number 68 of 2009, where income from JHT paid in a lump sum is subject to Income Tax Article 21. JHT is considered paid in a lump sum if part or all of the payment is made within a maximum period of two calendar years. The tax rate is based on the balance: if the JHT balance is below Rp 50 million, the rate is zero percent, whereas if the balance exceeds Rp 50 million, the rate is five percent. For example, Arif is an employee at PT Semesta Agung with a monthly salary of Rp 10 million. He has worked for 10 years and decides to resign. Based on BPJS Ketenagakerjaan calculations, assuming a fixed salary over 10 years, a company contribution of 3.7 percent, a worker contribution of 2 percent, and a development rate of 5 percent per annum, the estimated JHT benefit to be disbursed is Rp 88,362,839. As the balance exceeds Rp 50 million, Arif’s JHT will be subject to a final Income Tax Article 21 of five percent. The calculation is as follows: zero percent on the first Rp 50 million, and five percent on the remaining Rp 38,362,839. The tax payable on Arif’s JHT amounts to Rp 1,918,141.95, leaving a net JHT disbursement of Rp 86,444,697.