Calculating PPh 21 on salary along with allowances for permanent employees

Income tax Article 21 is income tax related to work, services and other activities carried out by individual taxpayers, in the form of salaries or wages, honoraria, allowances, and other payments related to work or services performed by domestic tax subjects. The calculation of PPh 21 refers to government regulations related to income tax, namely Law Number 36 of 2008, Regulation of the DJP PER-16 / PJ / 2016 concerning Procedures for Depositing & Reporting PPh 21, Regulation of the Minister of Finance of the Republic of Indonesia Number 250 / PMK.03 / 2008 concerning Position Fee & Pension Fee and Number 101 / PMK.010 / 2016 concerning Adjustments of Latest Non-Taxable Income (PTKP). Find out the explanation of the following PPh 21 calculations for salaries and allowances for permanent employees.

Basic Income Tax Calculation 21

Based on the four government regulations related to income tax as mentioned above, the most important points that need to be considered in calculating the PPh 21 tax are as follows:

1. Gross income in the form of basic salary, routine allowances (including job allowances, transportation and food allowances), non-routine allowances (including THR, overtime, bonuses, production services), and allowances paid by the company for insurance premiums & BPJS contributions (in the form of Work Accident Security and Death Insurance programs).

2. A deduction of gross income, in the form of an office fee in accordance with the Minister of Finance Regulation Number 250 / PMK.03 / 2008, which is set at 5% of gross income, or a maximum of IDR 6 million in a year. The pension contribution is in accordance with the Minister of Finance's regulation Number 250 / PMK.03 / 2008, which is set at 5% of gross income, or a maximum of IDR 2.4 million per year. BPJS Pension Security (JHT) premiums paid by workers, and BPJS Pension Security premiums paid by workers.

3. Non-taxable income (PTKP) . The amount of the PTKP rate in accordance with the Regulation of the Minister of Finance of the Republic of Indonesia Number 101 / PMK.010 / 2016 is as follows: Individual Taxpayers of IDR 54 million. Additional IDR 4.5 million for married taxpayers. And an additional Rp. 4.5 million for taxpayers who have dependents of a blood family member, a family of equal descent, and adopted children, a maximum of 3 people. As well as an additional Rp. 54 million for taxpayers whose income of husband and wife is combined.

Income tax rates 21 & non-taxable income 21

Based on the four government regulations related to income tax as mentioned above, the most important points that need to be considered in calculating the PPh 21 tax are as follows:

1. Gross income in the form of basic salary, routine allowances (including job allowances, transportation and food allowances), non-routine allowances (including THR, overtime, bonuses, production services), and allowances paid by the company for insurance premiums & BPJS contributions (in the form of Work Accident Security and Death Insurance programs).

2. A deduction of gross income, in the form of an office fee in accordance with the Minister of Finance Regulation Number 250 / PMK.03 / 2008, which is set at 5% of gross income, or a maximum of IDR 6 million in a year. The pension contribution is in accordance with the Minister of Finance's regulation Number 250 / PMK.03 / 2008, which is set at 5% of gross income, or a maximum of IDR 2.4 million per year. BPJS Pension Security (JHT) premiums paid by workers, and BPJS Pension Security premiums paid by workers.

3. Non-taxable income (PTKP) . The amount of the PTKP rate in accordance with the Regulation of the Minister of Finance of the Republic of Indonesia Number 101 / PMK.010 / 2016 is as follows: Individual Taxpayers of IDR 54 million. Additional IDR 4.5 million for married taxpayers. And an additional Rp. 4.5 million for taxpayers who have dependents of a blood family member, a family of equal descent, and adopted children, a maximum of 3 people. As well as an additional Rp. 54 million for taxpayers whose income of husband and wife is combined.

Income tax rates 21 & non-taxable income 21

Calculating PPh 21 on salary along with allowances for permanent employeesFor income up to IDR 50 million, you will be subject to a 5% income tax rate. For income between IDR 50 million and IDR 250 million, you are subject to a 15% income tax rate. Meanwhile, for income between IDR 250 million to IDR 500 million, you are subject to a 25% income tax rate. And income of more than IDR 500 million will be subject to a 30% income tax rate. If a taxpayer does not have an NPWP , the amount of the PPh rate will be subject to an additional fee of 20% of the prevailing normal rate.

Income that is not subject to PPh 21, namely receipt of claims from insurance companies, income in kind, directly subject to Final Income Tax, receipt of pension contributions from employers to pension fund institutions where its establishment has been approved by the Minister of Finance, receipt of zakat from the amil zakat institution where its establishment has been approved by the government, as well as acceptance of Scholarships.

Calculation of PPh 21 Permanent Employees

Tax is an obligation that must be paid by all citizens who already have income, regardless of their profession. According to the DGT regulations, all Indonesian citizens who are employees, employees, or workers who earn a salary are required to pay income tax or PPh to the state.