Payroll in Indonesia 2026: PPh 21 TER, BPJS and payslips

In Indonesia the employer withholds income tax (PPh 21) every month at an average effective rate (TER) and deducts the employee's BPJS contributions, 4% of pay. On top of salary the employer pays 10.24% to 11.74% for BPJS Kesehatan and BPJS Ketenagakerjaan, depending on the work-accident risk class, with caps on the health and pension bases.

Payroll in Indonesia at a glance

BPJS contributions

Two social security bodies collect contributions through payroll: BPJS Kesehatan for health care and BPJS Ketenagakerjaan for employment protection. The employer deducts the employee's shares and pays them with its own.

The base for the BPJS Ketenagakerjaan programmes is basic salary plus fixed allowances. The JP wage cap is updated every year by BPJS Ketenagakerjaan, so the maximum employee pension contribution from March 2026 is IDR 110,863 a month. The JKP benefit pays 60% of wages, on wages of up to IDR 5,000,000, for up to six months after a job loss.

PPh 21: the TER method

Since 1 January 2024 (Government Regulation 58 of 2023 and Minister of Finance Regulation 168 of 2023), PPh 21 for permanent employees works in two steps.

January to November: monthly TER. The employer multiplies the month's gross pay by an average effective rate from one of three tables, chosen by the employee's PTKP status:

• Category A: single with no dependants (TK/0), single with one dependant (TK/1) and married with no dependants (K/0)
• Category B: single with two or three dependants (TK/2, TK/3) and married with one or two dependants (K/1, K/2)
• Category C: married with three dependants (K/3)

Gross pay here means salary, allowances, overtime, bonuses and THR, plus the JKK, JKM and BPJS Kesehatan contributions paid by the employer. The employer's JHT and JP contributions are not included.

Category A starts like this (monthly gross pay in rupiah):

The table continues in Government Regulation 58 of 2023 for higher pay and for categories B and C.

December (or the last month of employment): annual recalculation. The employer takes the gross pay for the year and deducts:

• job expenses (biaya jabatan) of 5% of gross pay, at most IDR 6,000,000 a year (IDR 500,000 a month)
• the employee's own JHT and JP contributions, and zakat paid through the employer
• the PTKP (non-taxable income): IDR 54,000,000 for the employee, IDR 4,500,000 more if married and IDR 4,500,000 for each dependant, up to three

The result is taxed with the Article 17 rates, and the December withholding is the year's tax minus what was withheld from January to November.

Minimum wage and holiday allowance

Indonesia has no single national minimum wage. Each province sets a provincial minimum wage (UMP) for the year, and districts and cities can set a higher one (UMK). Pay at least the minimum wage that applies where the employee works and check the governor's decree for the year.

The religious holiday allowance (tunjangan hari raya, THR) is paid under the Ministry of Manpower's rules for each employee's religious holiday. For PPh 21 it is irregular income: it is added to the gross pay of the month it is paid, which pushes that month into a higher TER band, and the December recalculation evens it out.

Monthly payroll calendar and filings

1. 1Every pay day: deduct the employee's BPJS contributions and PPh 21 at the TER on that month's gross pay.
2. 2By the 15th of the following month: pay the PPh 21 withheld (Minister of Finance Regulation 81 of 2024, which introduced the Coretax system).
3. 3Within 20 days after the month ends: report the PPh 21 withheld in the monthly return in Coretax.
4. 4Every month: pay the BPJS Kesehatan and BPJS Ketenagakerjaan contributions, employer and employee shares together.
5. 5Every March: apply the new JP wage cap published by BPJS Ketenagakerjaan.
6. 6December: recalculate each employee's PPh 21 for the year.
7. 7By the end of January: give each employee the withholding slip for the previous year, which they use for their annual return.

Worked example: IDR 10,000,000 a month

A single employee with no dependants (TK/0, category A) earns IDR 10,000,000 a month, all of it basic salary and fixed allowances, in a business in the lowest JKK risk class (0.24%).

December. Gross pay for the year is IDR 125,448,000. Job expenses are capped at IDR 6,000,000 and the employee's JHT and JP contributions come to IDR 3,600,000, leaving IDR 115,848,000. After the PTKP of IDR 54,000,000, taxable income is IDR 61,848,000 and the tax for the year is 5% × 60,000,000 + 15% × 1,848,000 = IDR 3,277,200. With IDR 2,874,850 withheld from January to November, December's PPh 21 is IDR 402,350 and December's net pay IDR 9,197,650.

Common mistakes

1. 1Applying the TER to salary only. The employer's JKK, JKM and BPJS Kesehatan contributions are part of gross pay for PPh 21.
2. 2Using the wrong TER category after an employee marries or has a child; the category follows the PTKP status.
3. 3Skipping the December recalculation, which is where job expenses, the employee's pension contributions and the Article 17 rates are applied.
4. 4Ignoring the caps, such as the IDR 12 million base for BPJS Kesehatan and the JP cap that changes every March.
5. 5Missing the 15th for payment, or the 20-day limit for the monthly return.
6. 6Paying THR without adjusting PPh 21 in the month it is paid.

How Clientlly helps

Clientlly does not ship a built-in payroll profile for Indonesia. An administrator enters the rates once in the payroll tax settings: the income-tax bands, the personal allowance, the employee and employer contribution rates (BPJS Kesehatan, JHT, JP, JKK and JKM) and the minimum wage. Clientlly then calculates gross to net and the employer contributions and produces payslips. Because Indonesia withholds PPh 21 with the TER tables during the year and recalculates in December, compare the tax on each payslip with the TER table and the year-end calculation above.

Around payroll, Clientlly handles leave requests and approvals with a shared leave calendar, attendance and overtime tracking with attendance and time tracking, and HR documents for each employee. See all human resources features, or compare plans on the pricing page.