MAM Corporate Solutions

Income Tax Article 21 update January 2024

Indonesia announced Income Tax Article 21 Update effective from 1 January 2024

New regulation from the Government of Indonesia

The Government of Indonesia has issued Government Regulation Number 58 of 2023 (PP 58/2023) concerning the Income Tax Article 21 withholding tax rates on Income Related to the Work, Services, or Activities of Individual Taxpayers. The changes are quite significant. In this article, MAM Corporate Solutions will provide a complete guide to the new Article 21 Income Tax rates, starting in 2024.

One of the objectives of the issuance of PP 58/2023 is to simplify and streamline the Article 21 Income Tax withholding, which has been known to be very complicated.

Income Tax Article 21 Rates Starting January 2024

Based on Article 2 paragraph (1) of PP 58/2023, the Article 21 Income Tax withholding rates, the new effective rates of Article 21 Income tax withholding tax consist of:

  1. Monthly effective tax rate, or
  2. Daily effective rate

Monthly effective rates tax rates are categorized based on the non-taxable income (PTKP) status of the individual taxpayer. PTKP status is determined based on the marital status and the number of dependants at the beginning of the tax year.

These monthly effective rates consider the deductible expenses, pension contributions and/or PTKP status, which should be deducted from gross income.

Similarly, with daily effective rates, it has considered the portion of income that is not subject to withholding, which should be deducted from gross income.

Monthly effective tax rates have been classified into three Categories: A, B, C.

Category A Income Tax Article 21

Category A is applicable to the taxpayers with the following PTKP status:

  1. Single without dependants (TK0)
  2. Single with one dependant (TK1)
  3. Married without dependants (K0)

Category B Income Tax Article 21

Category B is applicable to the taxpayers with the following PTKP status:

  1. Single with two dependants (TK2)
  2. Single with three dependants (TK3)
  3. Married with one dependant (K1)
  4. Married with two dependants (K2)

Category C Income Tax Article 21

Category C is applicable to the taxpayers with the following PTKP status:

  1. Married with three dependants (K3)

Who is subject to the new Income tax Article 21 rates?

The Article 21 Income Tax rates based on PP 55/2023 are applicable for the withholding of Article 21 Income Tax for Taxpayers who receive income related to employment, services, or activities, including state officials, civil servants, members of the TNI (Indonesian National Armed Forces), members of the Police, and their pensions.

When does PP 58/2023 take effect?

The new regulation on the income tax Article 21 withholding tax PP 58/2023 takes effect on January 1, 2024.

The new tax rates are given below:

Monthly Effective Rates for Category A - Income Tax Article 21

NO

Income (more than)

Income (up to)

Tax rate

1

0

5,400,000

0%

2

5,400,000

5,650,000

0.25%

3

5,650,000

5,950,000

0.5%

4

5,950,000

6,300,000

0.75%

5

6,300,000

6,750,000

1%

6

6,750,000

7,500,000

1.25%

7

7,500,000

8,550,000

1.5%

8

8,550,000

9,650,000

1.75%

9

9,650,000

10,050,000

2%

10

10,050,000

10,350,000

2.25%

11

10,350,000

10,700,000

2.5%

12

10,700,000

11,050,000

3%

13

11,050,000

11,600,000

3.5%

14

11,600,000

12,500,000

4%

15

12,500,000

13,750,000

5%

16

13,750,000

15,100,000

6%

17

15,100,000

16,950,000

7%

18

16,950,000

19,750,000

8%

19

19,750,000

24,150,000

9%

20

24,150,000

26,450,000

10%

21

26,450,000

28,000,000

11%

22

28,000,000

30,050,000

12%

23

30,050,000

32,400,000

13%

24

32,400,000

35,400,000

14%

25

35,400,000

39,100,000

15%

26

39,100,000

43,850,000

16%

27

43,850,000

47,800,000

17%

28

47,800,000

51,400,000

18%

29

51,400,000

56,300,000

19%

30

56,300,000

62,200,000

20%

31

62,200,000

68,600,000

21%

32

68,600,000

77,500,000

22%

33

77,500,000

89,000,000

23%

34

89,000,000

103,000,000

24%

35

103,000,000

125,000,000

25%

36

125,000,000

157,000,000

26%

37

157,000,000

206,000,000

27%

38

206,000,000

337,000,000

28%

39

337,000,000

454,000,000

29%

40

454,000,000

550,000,000

30%

41

550,000,000

695,000,000

31%

42

695,000,000

910,000,000

32%

43

910,000,000

1,400,000,000

33%

44

1,400,000,000

 

34%

 

Monthly Effective Rates for Category B - Income Tax Article 21

NO

Income (more than)

Income (up to)

Tax rate

1

0

6,200,000

0%

2

6,200,000

6,500,000

0.25%

3

6,500,000

6,850,000

0.5%

4

6,850,000

7,300,000

0.75%

5

7,300,000

9,200,000

1%

6

9,200,000

10,750,000

1.5%

7

10,750,000

11,250,000

2%

8

11,250,000

11,600,000

2.5%

9

11,600,000

12,600,000

3%

10

12,600,000

13,600,000

4%

11

13,600,000

14,950,000

5%

12

14,950,000

16,400,000

6%

13

16,400,000

18,450,000

7%

14

18,450,000

21,850,000

8%

15

21,850,000

26,000,000

9%

16

26,000,000

27,700,000

10%

17

27,700,000

29,350,000

11%

18

29,350,000

31,450,000

12%

19

31,450,000

33,950,000

13%

20

33,950,000

37,100,000

14%

21

37,100,000

41,100,000

15%

22

41,100,000

45,800,000

16%

23

45,800,000

49,500,000

17%

24

49,500,000

53,800,000

18%

25

53,800,000

58,500,000

19%

26

58,500,000

64,000,000

20%

27

64,000,000

71,000,000

21%

28

71,000,000

80,000,000

22%

29

80,000,000

93,000,000

23%

30

93,000,000

109,000,000

24%

31

109,000,000

129,000,000

25%

32

129,000,000

163,000,000

26%

33

163,000,000

211,000,000

27%

34

211,000,000

374,000,000

28%

35

374,000,000

459,000,000

29%

36

459,000,000

555,000,000

30%

37

555,000,000

704,000,000

31%

38

704,000,000

957,000,000

32%

39

957,000,000

1,405,000,000

33%

40

1,405,000,000

 

34%

 

Income Tax Article 21 Categories
Income Tax Article 21 Categories

Monthly Effective Rates for Category C - Income Tax Article 21

NO

Income (more than)

Income (up to)

Tax rate

1

0

6,600,000

0%

2

6,600,000

6,950,000

0.25%

3

6,950,000

7,350,000

0.50%

4

7,350,000

7,800,000

0.75%

5

7,800,000

8,850,000

1%

6

8,850,000

9,800,000

1.25%

7

9,800,000

10,950,000

1.50%

8

10,950,000

11,200,000

1.75%

9

11,200,000

12,050,000

2%

10

12,050,000

12,950,000

3%

11

12,950,000

14,150,000

4%

12

14,150,000

15,550,000

5%

13

15,550,000

17,050,000

6%

14

17,050,000

19,500,000

7%

15

19,500,000

22,700,000

8%

16

22,700,000

26,600,000

9%

17

26,600,000

28,100,000

10%

18

28,100,000

30,100,000

11%

19

30,100,000

32,600,000

12%

20

32,600,000

35,400,000

13%

21

35,400,000

38,900,000

14%

22

38,900,000

43,000,000

15%

23

43,000,000

47,400,000

16%

24

47,400,000

51,200,000

17%

25

51,200,000

55,800,000

18%

26

55,800,000

60,400,000

19%

27

60,400,000

66,700,000

20%

28

66,700,000

74,500,000

21%

29

74,500,000

83,200,000

22%

30

83,200,000

95,600,000

23%

31

95,600,000

110,000,000

24%

32

110,000,000

134,000,000

25%

33

134,000,000

169,000,000

26%

34

169,000,000

221,000,000

27%

35

221,000,000

390,000,000

28%

36

390,000,000

463,000,000

29%

37

463,000,000

561,000,000

30%

38

561,000,000

709,000,000

31%

39

709,000,000

965,000,000

32%

40

965,000,000

1,419,000,000

33%

41

1,419,000,000

 

34%

Daily Effective Income Tax Article 21 Rates

No

Income (more than)

Income (up to)

Tax rate

1

0

450,000

0%

2

450,000

2,500,000

0.50%

Important note

Starting January 1, 2024, Income Tax Article 21 tax will be withheld based on the new effective tax rates. These rates will be used for the period January 2024 until November 2024. For the December 2024 month, the general rate is still used, so there will be an underpayment or overpayment in the month of December 2024.

How MAM Corporate Solutions can assist

Ensuring tax compliance is vital for well-functioning companies. MAM Corporate Solutions, with extensive experience in Indonesian tax laws, assists in tax registration, timely payments, returns filing, withholding taxes, and DGT correspondence. Our team ensures compliance and prevents penalties. With growing tax scrutiny, maintaining accurate monthly records is crucial. MAM offers Monthly Accounting and Tax Compliance packages for timely annual corporate tax filing. Contact us here or fill the form below for assistance with corporate tax administration in Indonesia.

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    Damara Tiyas
    Chief Operating Officer, New Santara Global
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