PPh 21 is a tax imposed on income received by individuals from employment, services, or other activities. If you want to understand how to calculate PPh 21, this article covers everything from the definition and regulations to calculation examples.
Definition and Structure of PPh 21
Article 21 Income Tax (PPh 21) is a tax on income in the form of salaries, wages, honoraria, allowances, and other payments related to employment. This tax is directly withheld by the employer (company) and remitted to the government monthly.
The general structure of PPh 21 involves:
- Gross Income (basic salary + other allowances)
- Deductions (job expenses, pension contributions, etc.)
- Taxable Income (PKP)
- Progressive tax rates according to income brackets
Also Read: Solution for Late Annual Tax Return Filing
Regulations Related to PPh 21
1. PPh 21 Taxpayers
Those classified as PPh 21 taxpayers include:
- Permanent employees
- Non-permanent / daily / freelance workers
- Recipients of honoraria, prizes, commissions
- Pensioners receiving periodic pension payments
2. Taxable & Non-Taxable Income (PTKP)
Non-Taxable Income (PTKP) is based on Ministry of Finance Regulation No. 168/PMK.010/2015 (as of 2023, not yet significantly revised):
- TK/0 (Single with no dependents): Rp54,000,000/year
- Married: additional Rp4,500,000
- Each dependent, max 3 people: additional Rp4,500,000 per person
Example: For an employee with K/2 status → PTKP = 54 million + 4.5 million + (2 × 4.5 million) = Rp67,500,000/year
Also Read: Corporate Tax in Indonesia: Types and Obligations
3. PPh 21 Progressive Tax Rates (for permanent employees)
| Taxable Income Bracket (PKP) | Tax Rate |
|---|---|
| ≤ Rp60,000,000 | 5% |
| > Rp60,000,000 – Rp250,000,000 | 15% |
| > Rp250,000,000 – Rp500,000,000 | 25% |
| > Rp500,000,000 – Rp5,000,000,000 | 30% |
| > Rp5,000,000,000 | 35% |
PPh 21 Deduction Rates (Freelancers & Non-Permanent Workers)
For non-permanent or freelance workers, the withholding is calculated at 50% of gross income multiplied by 5% (if monthly total is less than Rp4,500,000). If it exceeds that amount, the progressive tax rate is applied to the total taxable income.
Example: How to Calculate PPh 21 (Permanent Employee)
Case Example:
- Status: Married, 2 children (K/2)
- Basic Salary: Rp10,000,000
- Meal & Transport Allowance: Rp2,000,000
- Pension Contribution: Rp200,000/month
- Job Expense: 5% of gross income, max. Rp500,000
Steps:
1. Calculate Gross Income: Salary + Allowances = Rp10,000,000 + Rp2,000,000 = Rp12,000,000
2. Calculate Deductions:
- Job expense = 5% × 12 million = Rp600,000 → capped at Rp500,000
- Pension contribution = Rp200,000 Total deductions: Rp700,000
3. Net Monthly Income: Rp12,000,000 – Rp700,000 = Rp11,300,000
4. Net Annual Income: Rp11,300,000 × 12 = Rp135,600,000
5. Subtract PTKP (K/2 = Rp67,500,000): Taxable Income = Rp135,600,000 – Rp67,500,000 = Rp68,100,000
6. Calculate Annual PPh 21:
- Rp60,000,000 × 5% = Rp3,000,000
- Rp8,100,000 × 15% = Rp1,215,000 Total = Rp4,215,000
7. Monthly PPh 21: Rp4,215,000 / 12 = Rp351,250
Also Read: What Is a Tax Return (SPT)?
FAQ: How to Calculate PPh 21
1. What is PTKP? PTKP refers to the non-taxable income threshold based on marital status and number of dependents.
2. Do allowances count as income?
Yes, all forms of income, including allowances, bonuses, and holiday bonuses (THR), are included in PPh 21 calculation.
3. Can PPh 21 be zero?
Yes, if the total annual income does not exceed the PTKP threshold, then no PPh 21 will be withheld.
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