Personal Income Tax Calculator in Indonesia (PPh 21 & TER Scheme)

Gross salary means the employer pays the employee’s income tax (PPh 21) without adding a tax allowance to the salary. Gross-up salary means the employer provides a tax allowance equal to the PPh 21 due, so the tax is calculated and deducted from the total income, resulting in a neutral impact on the employee’s take-home pay.

Under the gross method, the employer bears the employee’s PPh 21 liability. The employer does not deduct the tax from the employee’s salary and pays it directly to the tax authority.

Under the gross-up method, the employer adds a tax allowance to the employee’s salary equal to the PPh 21 payable. The tax is then calculated on the total income, including the allowance. The allowance effectively covers the tax deduction, so the employee’s net income remains unchanged.

From the employee’s perspective, both methods can result in the same take-home pay. However, gross-up is often preferred for transparency because it shows the tax as part of the employee’s income and deduction, which may affect benefits or reporting structures.

No. Gross-up does not increase take-home pay. It increases reported income by adding a tax allowance, but the same amount is deducted as PPh 21 tax, so the employee gets no net gain.

TER (tarif efektif rata-rata) is the monthly effective withholding rate introduced by Government Regulation 58/2023 from 1 January 2024. Employers multiply gross monthly income by a single rate from one of three tables: Category A (TK/0, TK/1, K/0), Category B (TK/2, TK/3, K/1, K/2), or Category C (K/3). The 0% band covers monthly gross income up to Rp5.4 million, Rp6.2 million, and Rp6.6 million, respectively.

December is the reconciliation month. The employer recalculates the full-year tax using the progressive rates under Article 17 and deducts the TER withholding already taken from January to November; the remaining balance is withheld in December, which is often larger than in earlier months.

Under the gross method, the employer deducts PPh 21 from the employee’s salary. Under the gross-up method, the employer pays a tax allowance equal to the PPh 21, so the allowance is itself taxable, and the employee’s net pay equals the agreed salary. The employer’s cost is higher, but the allowance is deductible for corporate income tax. Our PPh 21 employer liability guide explains when each method creates risk.

No. Gross-up does not raise the employee’s take-home pay above the agreed net figure; it shifts the tax cost to the employer. It only changes who bears PPh 21 and how the payslip is presented.

A non-resident individual pays a final 20% PPh 26 on Indonesian-source income, withheld by the payer, and does not file an annual return. A tax treaty can reduce the rate if the recipient gives the payer a valid Certificate of Domicile (DGT form) before payment.

Resident expats are taxed on worldwide income by default. Foreign nationals with certain expertise can elect to be taxed only on Indonesian-source income for their first four tax years as residents under PMK 18/2021, after applying to DJP.

Yes. Since 2023, most benefits in kind (natura and enjoyment), such as housing, cars, or club memberships, are employment income subject to PPh 21 under PMK 66/2023. Exemptions include meals provided to all employees and certain items within value limits set by the regulation.

Employees earning up to Rp10 million gross in footwear, textiles and garments, furniture, leather goods and tourism, for tax months January to December 2026, under PMK 10/2025 as amended by PMK 105/2025. The employer’s business classification code must appear in the PMK appendix, and the incentive must be reported in the monthly PPh 21 return.

Late filing of an individual annual return (SPT Tahunan) carries an administrative fine of Rp100,000 under Article 7 of the General Tax Provisions Law. Late tax payments also incur monthly interest based on the Ministry of Finance reference rate. Employers that file monthly PPh 21 returns late face separate fines per return, which tax reporting support helps prevent.

Resident employees use their NIK (national ID number) as the taxpayer identification number in Coretax. Foreign residents receive a tax identification number through Coretax registration. Payroll systems should hold the correct identifier for each employee so withholding slips match DJP records.