Top.Mail.Ru

Changes in the Personal Income Tax rate (PIT – PPh21) in 2024: Effective rate and calculation example

accountant-calculating-profit-with-financial-analysis-graphs (1)

In 2024, the Indonesian government introduced significant changes to the rates of withheld personal income tax (PPh 21). The new effective rate came into effect on January 1, 2024, and applies to income from employment, services, or other types of activities.

Changes to the rules on withholding personal income tax are aimed at simplifying the calculation process and administrative procedures for taxpayers, including government officials, civil servants (PNS), members of the military/police, and retirees.

When calculating the new personal income tax rate established in Regulation 58/2023, various deductions are taken into account, including professional activity expenses, contributions to the pension fund, and the personal income tax exemption threshold (PTKP) when determining taxable income.

Types of effective personal income tax (PPh 21) rates

According to Article 2 of Government Regulation № 58/2023, the effective personal income tax rate is divided into two types: monthly effective rate (TER bulanan) and daily effective rate (TER harian). The monthly rate applies to the gross income received by the taxpayer monthly for one tax period with the status of a permanent employee.

The daily rate applies to the gross income received by the taxpayer on a daily, weekly, hourly, or contractual basis, with the status of a temporary employee, according to Article 2 of Government Regulation № 58/2023.

The determination of the rates is specified in Article 17, Part 1, point “a”.

Effective personal income tax rates are divided into three categories: A, B, and C. This division is based on the tax base not subject to tax (PTKP), taking into account the taxpayer’s marital status and the number of dependents at the beginning of the tax year.

Monthly effective rate in category A

The monthly effective rate in Category A applies to the monthly gross income of individuals, considering the PTKP status:

  • Single without dependents (TK/0)
  • Single with one dependent (TK/1)
  • Married without dependents (K/0)

The personal income tax rate for category A per month starts at 0% for monthly income up to Rp 5.4 million and increases to 34% for monthly income above Rp 1.4 billion.
Detailed information about all applicable monthly rates in Category A, based on each level of monthly gross income, can be found in the following table № 1.

Table 1

Current monthly tariff category A
Monthly Gross Income (Indonesian Rupiah IDR Tax rate
1 0–5.4 million IDR 0%
2 5.4 mln - 5.65 mln IDR 0,25%
3 5.65 mln - 5.95 mln IDR 0,5%
4 5.95 mln - 6.3 mln IDR 0,75%
5 6.3 mln - 6.75 million IDR 1%
6 6.75 mln - 7.5 mln IDR 1,25%
7 7.5 mln - 8.55 mln IDR 1,5%
8 8.55 mln - 9.65 mln IDR 1,75%
9 9.65 mln - 10.05 mln IDR 2%
10 10.05 mln - 10.35 mln IDR 2,25%
11 10.35 mln - 10.7 mln IDR 2,5%
12 10.7 mln - 11.05 mln IDR 3%
13 11.05 mln - 11.6 mln IDR 3,5%
14 11.6 mln - 12.5 mln IDR 4%
15 12.5 mln - 13.75 mln IDR 5%
16 13.75 mln - 5.1 mln IDR 6%
17 15.1 mln - 16.95 mln IDR 7%
18 16.95 mln - 19.75 mln IDR 8%
19 19.75 mln - 24.15 mln IDR 9%
20 24.15 mln - 26.45 mln IDR 10%
21 26.45 mln - 28 mln IDR 11%
22 28 mln - 30.05 mln IDR 12%
23 30.05 mln - 32.4 mln IDR 13%
24 32.4 mln - 35.4 mln IDR 14%
25 35.4 mln - 39.1 mln IDR 15%
26 39.1 mln - 43.85 mln IDR 16%
27 43.85 mln - 47.8 mln IDR 17%
28 47.8 mln - 51.4 mln IDR 18%
29 51.4 mln - 56.3 mln IDR 19%
30 56.3 mln - 62.2 mln IDR 20%
31 62.2 mln - 68.6 mln IDR 21%
32 68.6 mln - 77.5 mln IDR 22%
33 77.5 mln - 89 mln IDR 23%
34 89 mln - 103 mln IDR 24%
35 103 mln - 125 mln IDR 25%
36 125 mln - 157 mln IDR 26%
37 157 mln - 206 mln IDR 27%
38 206 mln - 337 mln IDR 28%
39 337 mln - 454 mln IDR 29%
40 454 mln - 550 mln IDR 30%
41 550 mln - 695 mln IDR 31%
42 695 mln - 910 mln IDR 32%
43 910 mln - Rp1.4 billion 33%
44 From 1.4 billion and above 34%

Monthly effective rate in category B

The effective monthly rates for Category B apply to the gross income of individuals with the following PTKP status:

  • Single, with 2 dependents (TK/2)
  • Single, with 3 dependents (TK/3)
  • Married with 1 dependent (K/1)
  • Married with 2 dependents (K/2)

The monthly effective rate for category B starts from 0% for monthly gross income up to Rp 6.2 million and reaches 34% for monthly gross income above Rp 1.405 billion.

Detailed monthly effective rates in category B depending on each range of monthly gross income are given in table No. 2:

Table 2

Current monthly tariff category A
Monthly Gross Income (Indonesian Rupiah IDR Tax rate
1 0 to 6.2 million IDR 0%
2 6.2 mln - 6.5 mln IDR 0,25%
3 6.5 - 6.85 mln IDR 0,5%
4 6.85 - 7.3 mln IDR 0,75%
5 7.3 - 9.2 mln IDR 1%
6 9.2 - 10.75 mln IDR 1,5%
7 10.75 mln - 11.25 mln IDR 2%
8 11,25 mln - 11,6 mln IDR 2.5%
9 11,6 mln - 12,6 mln IDR 3%
10 12,6 mln - 13,6 mln IDR 4%
11 13,6 mln - 14,95 mln IDR 5%
12 14,95 mln - 16,4 mln IDR 6%
13 16,4 mln - 18,45 mln IDR 7%
14 18,45 mln - 21,85 mln IDR 8%
15 21,85 mln - 26 mln IDR 9%
16 26 mln - 27,7 I mln IDR 10%
17 27,7 mln - 29,35 mln IDR 11%
18 29,35 mln до 31,45 mln IDR 12%
19 31,45 mln - 33,95 mln IDR 13%
20 33,95 mln - 37,1 mln IDR 14%
21 37,1 mln - 41,1 mln IDR 15%
22 41,1 mln - 45,8 mln IDR 16%
23 45,8 mln - 49,5 млн IDR 17%
24 49,5 mln - 53,8 mln IDR 18%
25 53,8 mln -58,5 mln IDR 19%
26 58,5 mln - 64 mln IDR 20%
27 64 mln - 71 mln IDR 21%
28 71 mln - 80 mln IDR 22%
29 80 mln - 93 mln IDR 23%
30 93 mln -109 mln IDR 24%
31 109 mln - 129 mln IDR 25%
32 129 mln - 163 mln IDR 26%
33 163 - 211 mln IDR 27%
34 211 mln - 374 mln IDR 28%
35 374 mln - 459 mln IDR 29%
36 459 mln - 555 mln IDR 30%
37 555 mln - 704 mln IDR 31%
38 704 mln - 957 mln IDR 32%
39 957 mln -1,405 billion IDR 33%
40 1,405 billion IDR 34%

Effective monthly rate for Category C (TER C)

The monthly rate for Category C applies to the overall income of PTKP individuals married with three dependents (K/3).

The monthly effective rate of Category C ranges from 0% for monthly income less than Rp 6.6 million to 34% for income above Rp 1.419 billion. Detailed information on monthly rates for each level of general income Category C is presented in Table No. 3.

Table 3

Current monthly tariff category A
Monthly Gross Income (Indonesian Rupiah IDR Tax rate
1 0 to 6.6 million IDR 0%
2 6.6 mln - 6.95 mln IDR 0,25%
3 6.95 mln - 7.35 mln IDR 0,5%
4 7.35 mln - 7.8 mln IDR 0,75%
5 7.8 mln - 8.85 million 1%
6 8.85 mln - 9.8 million 1,25%
7 9.8 mln - 10.95 mln IDR 1,5%
8 10.95 mln - 11.2 mln IDR 1,75%
9 11.2 mln - 12.05 mln IDR 2%
10 12.05 mln - 12.95 mln IDR 3%
11 12.95 mln - 14.15 mln IDR 4%
12 14.15 mln - 15.55 mln IDR 5%
13 15.55 mln - 17.05 mln IDR 6%
14 17.05 mln - 19.5 mln IDR 7%
15 19.5 mln - 22.7 mln IDR 8%
16 22.7 mln - 26.6 mln IDR 9%
17 26.6 mln - 28.1 mln IDR 10%
18 28.1 mln - 30.1 mln IDR 11%
19 30.1 mln - 32.6 mln IDR 12%
20 32.6 mln -35.4 mln IDR 13%
21 35,4 mln - 38,9 mln IDR 14%
22 38,9 mln - 43 mln IDR 15%
23 43 mln - 47,4 mln IDR 16%
24 47,4 mln - 51,2 mln IDR 17%
25 51,2 mln - 55,8 mln IDR 18%
26 55,8 mln - 60,4 mln IDR 19%
27 60,4 mln - 66,7 mln IDR 20%
28 66,7 mln - 74,5 mln IDR 21%
29 74,5 mln - 83,2 mln IDR 22%
30 83,2 mln - 95,6 mln IDR 23%
31 95,6 mln - 110 mln IDR 24%
32 110 mln - 134 mln IDR 25%
33 134 mln - 169 mln IDR 26%
34 169 mln - 221 mln IDR 27%
35 221 mln - 390 mln IDR 28%
36 390 mln - 463 mln IDR 29%
37 463 mln - 561 mln IDR 30%
38 561 mln - 709 mln IDR 31%
39 709 mln - 965 mln IDR 32%
40 965 mln - 1,419 billion IDR 33%
41 1.419 billion IDR 34%

Effective tax rates PPh 21 on daily income

Effective Per Day Rates, or TER Harian, are applied to temporary employees receiving daily or weekly income, payment per unit of work, or fixed income. The effective rate for such income is calculated based on the average income for the worked period.

The PPh 21 income tax rate is 0% for income up to Rp450,000 and 0.5% for incomes exceeding Rp450,000 up to Rp2.5 million IDR.

Examples of calculating the effective income tax rate

Rini is a regular employee of PT “XYZ”. Rini receives a monthly salary of Rp8 million and pays pension contributions of Rp100 thousand. Rini is single and has no dependents (PTKP TK/0) How to calculate the personal income tax rate?

Answer:

1. Withholding personal income tax for the tax period January – November:

Taking into account the PTKP TK/0 status and a monthly gross income of Rp8 million, personal income tax withholding for the period from January to November is calculated at the effective rate of category A, which is 1.5%.

Personal income tax (PPh 21) per month = Gross income per month * Monthly effective rate

Rp 8 million x 1.5% = Rp120 thousand.

2. Income tax withholding (December tax period) - Annual gross income:

Gross income per year = Rp8 million * 12 = Rp 96 million

Deduction:
Post Allowance = 5% * Gross Income per annum = Rs 4.8 million.
Pension contribution = Rp 100 * 12 = Rp 1.2 million
Deduction of expenses = Position allowance + Pension contribution = Rp 6 million

Net Annual Income = Gross Income per Year – Deductible Expenses
Rp 96 million – Rp 6 million = Rp 90 million

PTKP (Pengasilan Tidak Kena Pajak) – non-taxable income
PKP (Pendapatan Kena Payak) is taxable income.

PTCP per year = Rp 54 million
PCP per year = Rp 36 million

Personal income tax per year = Tariff of paragraph “a” of article 17, paragraph (1) of the Law on Pension Fund * PKP per year
5% * Rp 36 million = Rp 1.8 million

Personal income tax for December – annual personal income tax – personal income tax from January 21 to November =
= Rp 1.8 million – (Rp 120 thousand *11) = Rp 480 thousand.

The total annual amount of personal income tax withholding paid from the salary of employee Rini at the time of calculation will be Rp1.8 million

Useful posts