PPh 21 Calculation for 2023: PTKP Rates and Calculation Examples.

What is PPh 21

Pajak Penghasilan Pasal 21 (PPh 21) is a tax imposed on income in the form of salaries, wages, honorariums, allowances, and any other payments with any name and in any form related to work or position, services, and activities carried out by individual taxpayers who are domestic employees or known as taxpayers.

PPh 21 is one of the most widely imposed taxes in Indonesia. Therefore, it is important for employees to understand the regulations and calculations of PPh 21. PPh 21 is regulated in Law No. 7 of 1983 as last amended by Law No. 36 of 2008 concerning the Fourth Amendment to Law No. 7 concerning Income Tax and Law No. 7 of 2021 concerning Taxation Harmonization Regulations. There are also several derivative regulations that regulate PPh 21.

PPh 21 Regulation

Here are the regulations related to PPh 21 in Indonesia:Primary Regulation:

• Law No. 7 of 1983 as last amended by Law No. 36 of 2008 concerning the Fourth Amendment to Law No. 7 concerning Income Tax
• Law No. 7 of 2021 concerning Taxation Harmonization Regulations

Derivative Regulations:

• Government Regulation No. 68 of 2009 concerning Income Tax Rates for Article 21 on Income in the Form of Severance Pay, Pension Benefits, Old Age Allowances, and Old Age Security Paid at Once
• Government Regulation No. 41 of 2016 concerning the Treatment of Income Tax Article 21 on Employee Income from Employers with Certain Criteria
• Minister of Finance Regulation No. 252/PMK.03/2008 concerning Guidelines for Withholding Tax on Income Related to Work, Services, and Activities of Individuals
• Minister of Finance Regulation No. 16/PMK.03/2010 concerning Procedures for Withholding Tax on Income Related to Work, Services, and Activities of Individuals.

Taxable Income and Non-Taxable Income (PTKP)

PTKP stands for Penghasilan Tidak Kena Pajak, which is the amount of income that is not subject to tax in Indonesia. The latest PTKP for individuals is regulated in UU HPP Chapter III, number 3, which is a change to Article 7 of the Income Tax Law No. 36 of 2008.

Based on this regulation, the PTKP amount for unmarried individuals without dependents is still Rp54,000,000 per year. There are several additional PTKP that can be given, namely Rp4,500,000 for married taxpayers, Rp54,000,000 for a wife whose income is combined with her husband’s income, and Rp4,500,000 for each blood relative and adopted child who is fully dependent, up to a maximum of 3 people for each family.

The application of PTKP provisions is determined by the situation at the beginning of the tax year or the beginning of the tax period, which starts on January 1st. If there is a change in status during the current year, it will only apply from January 1st of the following year. For example, if a male employee is still single at the beginning of 2023, the Single (TK) PTKP applies. However, if he gets married in August 2023, the change in status to Married (K) PTKP will only apply from January 1st, 2024.

How to Calculate PPh 21

To calculate PPh 21, several steps need to be taken, including calculating gross income, net income, PTKP, and the PPh 21 tariff. The following are the steps to calculate PPh 21:

1. Calculate Gross Income
   Gross income is the total amount of money earned before taxes or other deductions are subtracted from the salary. Gross income can be calculated by adding up the basic salary, allowances, bonuses, and incentives.
2. Calculate Net Income
   Net income is the amount of money earned after PPh 21 is deducted from the gross income. Net income can be calculated by subtracting PPh 21 from the gross income.
3. Calculate PTKP
   PTKP is the income that is not subject to tax. The latest PTKP for 2023 is as follows:

• Rp 54 million per year for unmarried taxpayers.
• Rp 63 million per year for married taxpayers.
• Rp 4.5 million per month for taxpayers with dependents.

4. Calculate the PPh 21 Tariff
   The latest PPh 21 tariff for 2023 is as follows:

• 5% for taxable income up to Rp 60 million per year.
• 15% for taxable income above Rp 60 million up to Rp 250 million per year.
• 25% for taxable income above Rp 250 million up to Rp 500 million per year.
• 30% for taxable income above Rp 500 million per year.

5. Calculate PPh 21
   PPh 21 can be calculated using the following formula:

PPh 21 = (Gross Income – PTKP) x PPh 21 Tariff – Deductions Deductions are the amounts that have been deducted previously, such as BPJS Kesehatan and BPJS Ketenagakerjaan contributions.

Simulation of PPh 21 Calculation

Method Gross can be used if the employee bears their own income tax. Here is an example of calculating PPh 21 using the gross method for an employee with a monthly salary of Rp10,000,000 and single status without dependents (PTKP TK/0):

1. Gross Income – Employment Cost = Net Income
   Rp10,000,000 – (5% x Rp10,000,000) = Rp9,500,000
2. Net Income per month x 12 = Net Income per year
   Rp9,500,000 x 12 = Rp114,000,000
3. Net Income per year – PTKP TK/0 = Taxable Income
   Rp114,000,000 – Rp54,000,000 = Rp60,000,000
4. Example of PPh 21 Calculation for a Year with Progressive Tax
   5% x Rp60,000,000 = Rp3,000,000
5. Example of PPh 21 Calculation for a Month
   Rp3,000,000 : 12 months = Rp250,000

Therefore, the employee must pay PPh 21 of Rp250,000 per month.

Also read: Calculation of BPJS Kesehatan and BPJS Ketenagakerjaan Contributions covered by the Company for Employees

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