You Need to Know Personal Income Tax Provisions in Indonesia

You Need to Know Personal Income Tax Provisions in Indonesia

PPN - 27 Jan, 2024 10:01 WIB

Jakarta, Ideatax -- Personal Income Tax or Personal Income Tax is a type of tax imposed on individuals based on a certain amount of income. In accordance with the latest regulations, the applicable Taxable Income or PKP is IDR 5 million per month or IDR 60 million per year.

 

Through the HPP Law (Tax Harmonization Law), the Government has made changes to the tax rates that apply to individuals, including employees, with a salary range of IDR 5 million to IDR 15 million. This change aims to achieve harmony in the tax system. For more details, see the complete discussion below.

 

Personal Income Tax Provisions Applicable in Indonesia

For information, in the latest PTKP or Non-Taxable Income regulations that apply, it is still the same, namely IDR 54 million per year. Meanwhile, the Personal Income Tax rate is divided into 5 layers as in the following provisions:

 

Provisions in accordance with the HPP Law

As previously mentioned, the current tax rate has been changed to determine the PKP of IDR 5,000,000 per month. The applicable Personal Income Tax rates in accordance with the provisions of the HPP Law are:

 

Amount of PKP (Taxable Income) Applicable Tax Rates
IDR 0 – IDR 60 million

5%

IDR 60 million – IDR 250 million

15%

IDR 250 million – IDR 500 million

25%

IDR 500 million – IDR 5 billion

30%

IDR 5 billion and above

35%

 

Provisions According to Old Income Tax

Meanwhile, at the old PPh rates, the provisions that applied to the tax rates were as follows:

 

Amount of PKP (Taxable Income) Applicable Tax Rates
IDR 0 – IDR 50 million

5%

IDR 50 million – IDR 250 million

15%

IDR 250 million – IDR 500 million

25%

Above IDR 500 million 

30%

 

Example of personal income tax calculation

With these provisions, of course you want to know how it is calculated. For example, this time the tax amount will be calculated for income of IDR 5 million/month or IDR 60 million/year.
The calculation formula is:

 

PKP = Annual income - PTKP


Next, just calculate;

IDR 60,000,000 – IDR 54,000,000 = IDR 6,000,000

Because it is included in layer I, it is only subject to a tax rate of 5%, so the calculation is:

5% x IDR 6,000,000 = IDR 300,000 per year.

So, the tax that must be paid is IDR 300,000 per year.

 

That is the discussion regarding the provisions on tax obligations for individuals in Indonesia. Changes in tax rates and new Taxable Income limits, as regulated in the HPP Law, are significant steps in supporting a more effective and fair tax policy.

For those of you who want to know other tax amounts related to business, contact us to get a complete consultation session. With the support of trusted tax consultation services from Ideatax, your tax affairs will become easier and better managed.

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