The Ministry of Labor has issued a Decree on the payment of annual religious leave benefits

Minister of Manpower, Ida Fauzia, issued an official letter numbered M/2/HK.04.00/III/2023 regarding the implementation of a religious leave system for employees of companies in 2023. The letter, released on March 27, 2023, was sent to the governors across Indonesia.

The Minister stated that providing Religious Holiday Allowances (Tunjangan Hari Raya- THR) is an obligation for employers towards their employees. These allowances must be paid in full, without the possibility of installment, and no later than seven days before the start of the religious holiday.

The Minister of Labor explained that religious benefits are provided to employees who have worked at least one month, regardless of their employment status, whether it’s a fixed-term contract or an indefinite one. This rule also applies to freelance workers, in accordance with legislative requirements.

The amount of THR for employees who have worked continuously for 12 months or more is equivalent to one month’s salary.

For employees who have worked more than one but less than 12 months, the religious holiday benefits are provided proportionally based on the time worked.

Companies are allowed to provide THR in amounts exceeding the legislative norms. According to Ministerial Regulation № 6 of 2016 on human resources, organizations have the right to establish higher THR amounts in employment contracts, internal regulations, collective labor agreements or based on established company practice,

while adhering to legislative requirements.

The calculation of religious holiday benefits (THR)

For employees who have worked for 12 months or more, the monthly salary is calculated based on the average salary over the last 12 months preceding the religious holiday. For temporary workers with a period of employment of fewer than 12 months, the monthly salary is determined based on the average salary for each month during their period of employment.

Temporary workers with daily labor agreements, as well as employees with one-time salaries, are also entitled to THR. They receive an amount calculated based on the average salary over the last 12 months preceding the religious holidays.

It is important to emphasize that for certain export-oriented labor-intensive industrial companies, which make adjustments to working hours and salaries in accordance with Resolution 5/2023, the obligation to pay religious benefits remains. The salary used as the basis for calculating THR is the last recovered value before the salary adjustment.

To anticipate complaints regarding the implementation of religious benefits, operational task force units (Posko Satgas) have been established in each province and urban region.

Additionally, online consultations regarding religion holiday benefits can be obtained through the Ministry of Labor website.

In Indonesia, a variety of religious holidays are observed due to the diversity of faiths. In Islam, the main holiday is Ramadan, in Christianity – Christmas, and in Hinduism – Nyepi. To accurately administer religious leave allowances, it’s essential to know the religious affiliations of your employees, identify the key holidays for each faith, and cross-reference them with the holiday calendar to ensure timely management of leave allowances.