13th month pay in
Indonesia.

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Is there 13th-month pay in Indonesia?

Yes, the 13th-month salary is mandatory in Indonesia. It is called the Tunjangan Hari Raya (THR) payment and is linked to religious holidays.

How is 13th-month pay calculated in Indonesia?

The 13th-month pay is simply an entire month’s salary (annual income divided by 12) plus any fixed monthly allowance.

When is the 13th-month salary paid in Indonesia?

The payment needs to be made at least one week before the main religious holiday observed for the employee. For this reason, the payment date can vary depending on the religion of the employee.

Does the 13th month pay amount to any extra payment by the employer?

Since the 13th month of pay in Indonesia is required by law, employers should factor this into the budget when hiring employees. Employers looking to hire in Indonesia should divide their annual salary by 13 and use this as the baseline monthly amount when recruiting employees in Indonesia.

Is the 13th-month salary taxable in Indonesia?

Yes, it is taxable as normal income.

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Your business can easily hire employees in Indonesia without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

Is the 13th month pay required by law or standard in Indonesia?

The 13th month salary is required by law in Indonesia. It is a payment for the religious holiday observed by the employee and should usually be paid according to their preference.

Are there more than 13 months of pay in Indonesia?

There are normally not more than 13 months of pay in Indonesia.

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