PPh 21 Effective Rates: The TER Tables and How to Apply Them

The PPh 21 effective rate is the single percentage an Indonesian employer applies to an employee’s gross pay each month to work out the income tax to withhold. PPh 21 — Pajak Penghasilan Pasal 21, Income Tax Article 21 — is the tax on pay for work.

Since 1 January 2024 it has been withheld under PP No. 58 of 2023: an effective rate (tarif efektif rata-rata, or TER) for every month except the last one of the year, and a full calculation at the ordinary income tax rates in December.

The effective rates are built to allow for the deductions an employee is entitled to, so nothing is subtracted before the rate is applied. Getting it right is a matter of three things: the employee’s category, their gross pay for the month, and the December reconciliation.

Find the employee’s category

The rate depends on the employee’s PTKP status — Penghasilan Tidak Kena Pajak, the tax-free allowance for marital status and dependants — at the start of the year (PP 58/2023, Article 2(3)–(4)). The eight statuses fall into three categories.

PTKP status and TER category

	Category	Annual PTKP (IDR)
TK/0 — single, no dependants	A	54,000,000
TK/1 — single, one dependant	A	58,500,000
K/0 — married, no dependants	A	58,500,000
TK/2 — single, two dependants	B	63,000,000
TK/3 — single, three dependants	B	67,500,000
K/1 — married, one dependant	B	63,000,000
K/2 — married, two dependants	B	67,500,000
K/3 — married, three dependants	C	72,000,000

The allowance is IDR 54,000,000 for the employee, IDR 4,500,000 more for being married, and IDR 4,500,000 for each dependant up to three (Income Tax Law, Article 7(1)). Three rules decide which row applies:

• Status is fixed on 1 January. A marriage or a child during the year changes nothing until the next year (PMK 168/2023, Article 9(4)).
• Someone who arrives to live in Indonesia during the year takes their status at the start of the month they arrive (Article 9(5)).
• A married woman employee is treated as single, with the allowance for herself only, unless she provides a statement from the local government that her husband has no income (Article 9(2)–(3)).

The monthly rate tables

Apply the rate to gross pay for the month. Gross includes salary, every allowance, overtime, bonuses and THR, and the employer’s contributions for work-accident and death cover and for BPJS Kesehatan, the health scheme. The employer’s contributions to pension and old-age savings are left out (PMK 168/2023, Articles 5(3) and 7(c)). A month that includes a bonus or a THR payment — Tunjangan Hari Raya, the religious holiday allowance — therefore sits in a higher band than the months around it, which is expected.

The bands run from “over” the first figure “to and including” the second, so an amount exactly on a boundary takes the lower rate. Figures are monthly gross in IDR.

The tables are the Annex to PP 58/2023. Category B has no 1.25% or 1.75% band and Category C has no 2.25% or 2.5% band; that is how the regulation sets them, not a gap in this copy.

Workers not on a monthly salary

The monthly rates are for permanent employees, pensioners, and commissioners paid irregularly. A permanent employee includes anyone paid regularly, a regularly paid commissioner, and a full-time employee on a fixed-term contract (PMK 168/2023, Article 1(10)). Other people are withheld from differently (Articles 12 and 16).

How PPh 21 is worked out for other payees

	How the tax is worked out
Casual worker, up to IDR 450,000 a day	0%
Casual worker, over IDR 450,000 to 2,500,000 a day	0.5% of daily gross
Casual worker, over IDR 2,500,000 a day	Half the day's pay, taxed at the ordinary income tax rates
Casual worker paid monthly	The monthly rate tables above
Non-employee, such as a consultant	The same rates on 50% of the fee

“Daily” means pay received by the day, the week, the piece or the job; where it is not paid by the day, the average for each day worked is used (PMK 168/2023, Annex, Part One III.1). Paying individuals who are not employees is covered in withholding tax on services.

December: the annual reconciliation

The effective rates are an estimate. In the last tax period — December, or the month a permanent employee leaves — the employer works out the tax on the whole year’s pay at the ordinary income tax rates and withholds the difference between that and what the effective rates have already taken (PMK 168/2023, Articles 1(18) and 15). This happens every year.

The year’s taxable income is gross pay, less:

• a job-expense deduction of 5% of gross, capped at IDR 500,000 a month or IDR 6,000,000 a year (Article 10(2))
• the employee’s own pension and old-age contributions paid through the employer, including their BPJS Ketenagakerjaan share (Article 10(1)(b))
• zakat or another compulsory religious contribution paid through the employer to an approved body (Article 10(1)(c))
• the PTKP allowance for the employee’s status

The result is rounded down to the full thousand (Article 8(4)) and taxed at the ordinary rates.

Ordinary income tax rates for individuals

	Rate
Up to IDR 60,000,000	5%
Over IDR 60,000,000 to 250,000,000	15%
Over IDR 250,000,000 to 500,000,000	25%
Over IDR 500,000,000 to 5,000,000,000	30%
Over IDR 5,000,000,000	35%

These are the rates in Article 17(1)(a) of the Income Tax Law, as amended by UU No. 7 of 2021 and in force since the 2022 tax year.

A worked year

The regulation’s own example: an employee with gross income of IDR 10,000,000 a month, married with no dependants (K/0, so Category A), paying an employee pension contribution of IDR 100,000 a month. January to November are withheld at Category A’s 2%, which is IDR 200,000 a month. December works out as follows (PP 58/2023, Elucidation to Article 2(1)). The IDR 10,000,000 is the whole month’s gross. Where the employer also pays work-accident, death or health premiums, those are added to gross first, so the same salary can sit in a higher band — the cost of an employee calculator works it through.

Description	IDR
Gross pay for the year 10,000,000 × 12	120,000,000
Job-expense deduction 5%, at the IDR 6,000,000 cap	(6,000,000)
Employee pension contribution 100,000 × 12	(1,200,000)
Net income	112,800,000
PTKP, K/0	(58,500,000)
Taxable income	54,300,000
Tax for the year 5% × 54,300,000	2,715,000
Already withheld, January to November 200,000 × 11	(2,200,000)
To withhold in December	515,000

An employee who leaves during the year

The month a permanent employee stops work is their last tax period, and the reconciliation is done then, on what they were actually paid while employed (PMK 168/2023, Annex, Part One I.2, point 6). The regulation’s worked example applies the full year’s PTKP allowance, not a pro-rated one, which is why a leaver is often owed a refund. Pay is scaled up to a full year only for someone who becomes or stops being an Indonesian tax resident during the year (Article 15(3)).

Paying, filing and the slip

Since 1 January 2025, when Coretax, the tax office’s new system, came in under PMK 81/2024:

• tax withheld is paid by the 15th of the following month (Article 94(2)), moving to the next working day when the 15th is not one (Article 100)
• the monthly return is filed by the 20th (Article 171(1)), on its own return for PPh 21 and 26 rather than the combined “Unifikasi” return used for other withholding taxes (Article 171(2))
• no return is needed for a month with no payments, except the last tax period, which always needs one (Article 171(5)–(6))
• each permanent employee receives an annual withholding slip, Form BPA1, within one month after the last tax period (PER-11/PJ/2025, Article 7(2)); their personal tax return credits it

Paying late costs interest for each month or part of a month, up to 24 months, at a rate the Minister of Finance sets from the reference interest rate plus 5%, divided by twelve (UU KUP, Article 9(2a) and (2c), as amended by UU No. 6 of 2023). A monthly return filed late is fined IDR 100,000 (UU KUP, Article 7(1)).

Both dates are on the Indonesia compliance calendar.

The Income Tax Law still sets the rate 20% higher for a payee without a tax number (Article 21(5a)). For an Indonesian resident, the tax number is their national identity number (NIK), once the tax office has activated it; a foreign employee needs a 16-digit NPWP — Nomor Pokok Wajib Pajak, the tax identification number — of their own.

Tax borne by the government in 2026

For January to December 2026, PMK 105/2025 has the government bear PPh 21 for lower-paid staff of employers in five sectors: footwear, textiles and clothing, furniture, leather goods, and tourism. The employer’s main business classification code (KLU) in the tax office’s records on 1 January 2026 must be on the list in the regulation’s annex (Articles 3(1)–(2)).

• Permanent employees qualify with fixed, regular gross pay of no more than IDR 10,000,000 in January 2026, or in their first month if they joined during the year (Article 4(2)).
• Casual workers qualify with average pay of no more than IDR 500,000 a day, or IDR 10,000,000 a month if paid monthly (Article 4(3)).
• The tax is still calculated, and the employer pays it to the employee in cash with their wages (Article 5(1)).
• The monthly returns for 2026 count as the employer’s claim only if filed or corrected by 31 January 2027. After that the incentive is lost and the tax must be paid over (Article 6(4)–(6)).

What this means for you

Keep each employee’s PTKP status on file as it stood on 1 January, apply the right table to gross pay including allowances, and budget for December rather than being surprised by it. Where an employee’s December figure will be large, telling them in advance saves the conversation afterwards. A wrong status or a missed allowance in January is carried through every month and surfaces only in the reconciliation, which makes it the part of payroll most worth checking early.