Breaking Down the Article 21 Withholding Tax Provision
In its 2023 Annual Report, the Directorate General of Taxes (DGT) recorded Article 21 income tax revenue of IDR 200.98 trillion, or 99.59% of the target (DGT, 2024). Compared to the same period in the previous year, Article 21 revenue grew by 16.4% year-on-year, up from IDR 172.66 trillion in 2022 (DGT, 2023).
In the same year, the government also issued Government Regulation (Peraturan Pemerintah/PP) Number 58 of 2023, which sets out the withholding rates for Article 21 income tax on income earned from work, services, or activities by individual taxpayers. This regulation introduces a simplified system for withholding Article 21 tax by applying an effective tax rate (ETR).
Although there is no empirical evidence linking the revenue increase directly to the use of ETR, the simplified mechanism is expected to improve taxpayer compliance by making withholding more straightforward. This article reviews how Article 21 income tax withholding operates under the ETR system as outlined in PP Number 58 of 2023.
PP Number 58 of 2023 establishes three categories of effective monthly withholding rates. First, category A applies to taxpayers with non-taxable income (penghasilan tidak kena pajak/PTKP) status, which includes those who are unmarried with no dependents (TK/0), unmarried with one dependent (TK/1), and married with no dependents (K/0).
Second, category B applies to taxpayers with PTKP status who are unmarried with two dependents (TK/2), unmarried with three dependents (TK/3), married with one dependent (K/1), and married with two dependents (K/2). Third, category C applies to taxpayers with PTKP status who are married with three dependents (K/3).
The monthly tax payable is calculated by multiplying gross income by the applicable ETR, as shown in the table below:
Category A
| No. | Gross Monthly Income (IDR) | ETR |
| 1 | Up to 5,400,000 | 0% |
| 2 | 5,400,000 – 5,650,000 | 0.25% |
| 3 | 5,650,000 – 5,950,000 | 0.5% |
| 4 | 5,950,000 – 6,300,000 | 0.75% |
| 5 | 6,300,000 – 6,750,000 | 1% |
| 6 | 6,750,000 – 7,500,000 | 1.25% |
| 7 | 7,500,000 – 8,550,000 | 1.5% |
| 8 | 8,550,000 – 9,650,000 | 1.75% |
| 9 | 9,650,000 – 10,050,000 | 2% |
| 10 | 10,050,000 – 10,350,000 | 2.25% |
| 11 | 10,350,000 – 10,700,000 | 2.5% |
| 12 | 10,700,000 – 11,050,000 | 3% |
| 13 | 11,050,000 – 11,600,000 | 3.5% |
| 14 | 11,600,000 – 12,500,000 | 4% |
| 15 | 12,500,000 – 13,750,000 | 5% |
| 16 | 13,750,000 – 15,100,000 | 6% |
| 17 | 15,100,000 – 16,950,000 | 7% |
| 18 | 16,950,000 – 19,750,000 | 8% |
| 19 | 19,750,000 – 24,150,000 | 9% |
| 20 | 24,150,000 – 26,450,000 | 10% |
| 21 | 26,450,000 – 28,000,000 | 11% |
| 22 | 28,000,000 – 30,050,000 | 12% |
| 23 | 30,050,000 – 32,400,000 | 13% |
| 24 | 32,400,000 – 35,400,000 | 14% |
| 25 | 35,400,000 – 39,100,000 | 15% |
| 26 | 39,100,000 – 43,850,000 | 16% |
| 27 | 43,850,000 – 47,800,000 | 17% |
| 28 | 47,800,000 – 51,400,000 | 18% |
| 29 | 51,400,000 – 56,300,000 | 19% |
| 30 | 56,300,000 – 62,200,000 | 20% |
| 31 | 62,200,000 – 68,600,000 | 21% |
| 32 | 68,600,000 – 77,500,000 | 22% |
| 33 | 77,500,000 – 89,000,000 | 23% |
| 34 | 89,000,000 – 103,000,000 | 24% |
| 35 | 103,000,000 – 125,000,000 | 25% |
| 36 | 125,000,000 – 157,000,000 | 26% |
| 37 | 157,000,000 – 206,000,000 | 27% |
| 38 | 206,000,000 – 337,000,000 | 28% |
| 39 | 337,000,000 – 454,000,000 | 29% |
| 40 | 454,000,000 – 550,000,000 | 30% |
| 41 | 550,000,000 – 695,000,000 | 31% |
| 42 | 695,000,000 – 910,000,000 | 32% |
| 43 | 910,000,000 – 1,400,000,000 | 33% |
| 44 | Above 1,400,000,000 | 34% |
Category B
| No. | Gross Monthly Income (IDR) | ETR |
| 1 | Up to 6,200,000 | 0% |
| 2 | 6,200,000 – 6,500,000 | 0.25% |
| 3 | 6,500,000 – 6,850,000 | 0.5% |
| 4 | 6,850,000 – 7,300,000 | 0.75% |
| 5 | 7,300,000 – 9,200,000 | 1% |
| 6 | 9,200,000 – 10,750,000 | 1.5% |
| 7 | 10,750,000 – 11,250,000 | 2% |
| 8 | 11,250,000 – 11,600,000 | 2.5% |
| 9 | 11,600,000 – 12,600,000 | 3% |
| 10 | 12,600,000 – 13,600,000 | 4% |
| 11 | 13,600,000 – 14,950,000 | 5% |
| 12 | 14,950,000 – 16,400,000 | 6% |
| 13 | 16,400,000 – 18,450,000 | 7% |
| 14 | 18,450,000 – 21,850,000 | 8% |
| 15 | 21,850,000 – 26,000,000 | 9% |
| 16 | 26,000,000 – 27,700,000 | 10% |
| 17 | 27,700,000 – 29,350,000 | 11% |
| 18 | 29,350,000 – 31,450,000 | 12% |
| 19 | 31,450,000 – 33,950,000 | 13% |
| 20 | 33,950,000 – 37,100,000 | 14% |
| 21 | 37,100,000 – 41,100,000 | 15% |
| 22 | 41,100,000 – 45,800,000 | 16% |
| 23 | 45,800,000 – 49,500,000 | 17% |
| 24 | 49,500,000 – 53,800,000 | 18% |
| 25 | 53,800,000 – 58,500,000 | 19% |
| 26 | 58,500,000 – 64,000,000 | 20% |
| 27 | 64,000,000 – 71,000,000 | 21% |
| 28 | 71,000,000 – 80,000,000 | 22% |
| 29 | 80,000,000 – 93,000,000 | 23% |
| 30 | 93,000,000 – 109,000,000 | 24% |
| 31 | 109,000,000 – 129,000,000 | 25% |
| 32 | 129,000,000 – 163,000,000 | 26% |
| 33 | 163,000,000 – 211,000,000 | 27% |
| 34 | 211,000,000 – 374,000,000 | 28% |
| 35 | 374,000,000 – 459,000,000 | 29% |
| 36 | 459,000,000 – 555,000,000 | 30% |
| 37 | 555,000,000 – 704,000,000 | 31% |
| 38 | 704,000,000 – 957,000,000 | 32% |
| 39 | 957,000,000 – 1,405,000,000 | 33% |
| 40 | Above 1,405,000,000 | 34% |
Category C
| No. | Gross Monthly Income (IDR) | ETR |
| 1 | Up to 6,600,000 | 0% |
| 2 | 6,600,000 – 6,950,000 | 0.25% |
| 3 | 6,950,000 – 7,350,000 | 0.5% |
| 4 | 7,350,000 – 7,800,000 | 0.75% |
| 5 | 7,800,000 – 8,850,000 | 1% |
| 6 | 8,850,000 – 9,800,000 | 1.25% |
| 7 | 9,800,000 – 10,950,000 | 1.5% |
| 8 | 10,950,000 – 11,200,000 | 1.75% |
| 9 | 11,200,000 – 12,050,000 | 2% |
| 10 | 12,050,000 – 12,950,000 | 3% |
| 11 | 12,950,000 – 14,150,000 | 4% |
| 12 | 14,150,000 – 15,550,000 | 5% |
| 13 | 15,550,000 – 17,050,000 | 6% |
| 14 | 17,050,000 – 19,500,000 | 7% |
| 15 | 19,500,000 – 22,700,000 | 8% |
| 16 | 22,700,000 – 26,600,000 | 9% |
| 17 | 26,600,000 – 28,100,000 | 10% |
| 18 | 28,100,000 – 30,100,000 | 11% |
| 19 | 30,100,000 – 32,600,000 | 12% |
| 20 | 32,600,000 – 35,400,000 | 13% |
| 21 | 35,400,000 – 38,900,000 | 14% |
| 22 | 38,900,000 – 43,000,000 | 15% |
| 23 | 43,000,000 – 47,400,000 | 16% |
| 24 | 47,400,000 – 51,200,000 | 17% |
| 25 | 51,200,000 – 55,800,000 | 18% |
| 26 | 55,800,000 – 60,400,000 | 19% |
| 27 | 60,400,000 – 66,700,000 | 20% |
| 28 | 66,700,000 – 74,500,000 | 21% |
| 29 | 74,500,000 – 83,200,000 | 22% |
| 30 | 83,200,000 – 95,000,000 | 23% |
| 31 | 95,600,000 – 110,000,000 | 24% |
| 32 | 110,000,000 – 134,000,000 | 25% |
| 33 | 134,000,000 – 169,000,000 | 26% |
| 34 | 169,000,000 – 221,000,000 | 27% |
| 35 | 221,000,000 – 390,000,000 | 28% |
| 36 | 390,000,000 – 463,000,000 | 39% |
| 37 | 463,000,000 – 561,000,000 | 30% |
| 38 | 561,000,000 – 709,000,000 | 31% |
| 39 | 709,000,000 – 965,000,000 | 32% |
| 40 | 965,000,000 – 1,419,000,000 | 33% |
| 41 | Above 1,419,000,000 | 34% |
Legal References
- Law of the Republic of Indonesia Number 7 of 1983 concerning Income Tax, as amended by Law of the Republic of Indonesia Number 7 of 2021 concerning Harmonization of Tax Regulations
- Government Regulation Number 58 of 2023 concerning Withholding Rates Under Article 21 for Income From Work, Services, or Activities of Individual Taxpayers
References
- DJP2023Annual Report 2022JakartaDJP
- DJP2024Annual Report 2023JakartaDJP
