When performing your tax rights and obligations, you need to know who the withholding agent is, who the subject of the withholding is, what their respective rights and obligations are, what the withholding mechanism is, and how to file Article 21 Income Tax.
The withholding agents of Article 21 Income Tax are:
- Employers;
- Treasurers and State Treasury;
- Pension funds;
- Non-employee individual honorarium payers;
- Event organizers.
The subjects whose income Article 21 Tax is withheld from consist of:
- Employees;
- Recipients of severance pay, pension or pension benefit, or old-age benefit, including their heirs who are also Article 21 Income Taxpayers;
- Non-employee category Article 21 Income Taxpayers receiving or earning income in connection with the delivery of services, including:
- Experts conducting independent personal service, consisting of lawyers, accountants, architects, medical doctors, consultants, notaries, appraisers, and actuaries;
- Musicians, presenters, singers, comedians, film actors, soap opera actors, commercial actors, directors, film crews, photo models, runway models, theater actors, dancers, sculptors, painters, and other artists;
- Athletes;
- Advisors, educators, trainers, public speakers, instructors, and moderators;
- Authors, researchers, and translators;
- Service providers in any fields including engineering, computer and its application system, telecommunication, electronics, photography, economy, and social affairs, as well as service providers for a committee;
- Advertising agents;
- Project supervisors or managers;
- Order carriers or customer finders or intermediaries;
- Merchandise vendors;
- Insurance service officers; and/or
- Distributors of multilevel marketing or direct selling companies and other similar activities;
- Members of board of commissioners or supervisory board not concurrently working as permanent employees at the companies are also Article 21 Income Taxpayers;
- Former employees; and/or
- Activity participant category Article 21 Income Taxpayers receiving or earning income in connection with their participation in an activity, including:
- Contestants in any fields, including sports, arts, dexterity, science, technology and other competitions;
- Participants of meeting, conference, session, gathering, or work visit;
- Participants or members of a committee as the organizer of a certain activity;
- Participants of training; or
- Participants of other activities.
If you are an employer withholding Article 21 Income Tax, what you have to do is:
- Withhold Article 21 Income Tax according to the applicable tax rate;
- Issue a withholding Article 21 Income Tax receipt using Article 21 Income Tax e-SPT application;
- Pay withholding Article 21 Income Tax using a billing code with MAP Code 411121 and Payment Type Code 100. The payment must be made no later than the 10th day of the following month. For example: on a withholding Article 21 Income Tax made in April 2020, the Income Tax payment must be made no later than 10 May 2020; and
- File a Periodic Article 21 Income Tax Return online through the Directorate General of Taxes e-filing channel on the www.pajak.go.id webpage or to a designated official Tax Application Service Provider.
If you are an individual receiving income from an employer withholding Article 21 Income Tax, what you have to do is:
- Request and receive a withholding Article 21 Income Tax receipt (1721-A1 and 1721-A2) for the received income from which Article 21 Income Tax is withheld on a regular basis;
- If you are a permanent employee or a pension recipient subject to withholding Article 21 Income Tax by your employer or pension funds, you are entitled to receive a withholding tax receipt at the beginning of each year;
- If you are a recipient of honorarium, not an employee, and an activity participant subject to withholding Article 21 Income Tax by your income provider, you are entitled to receive a withholding Article 21 Income Tax receipt after the income is paid;
- If you receive income from your employer, but from which no Article 21 Income Tax is withheld, the income must be calculated into and filed on your Annual Individual Income Tax Return and you must settle the tax underpayment using a billing code with MAP Code 411125 and Payment Type Code 200.
Article 21 Income Tax of permanent employees of one employer
Anindita Maharani, a married woman with three children, is an employee at PT Karunia Bakti. Her husband is a Civil Servant at the Transportation Office of Magelang Regency. Her salary is Rp5,000,000 per month. Her company provides pension program and BPJS Kesehatan health insurance. The company pays a pension contribution of Rp60,000 per month to a pension funds established with the approval of the Minister of Finance.
Anindita also pays a monthly pension contribution of Rp50,000. In addition, the company also pays a monthly Old-Age Benefit contribution of 3.7% of her salary, while she contributes 2% of her salary to it. Her employer also pays work accident and life insurance premiums at 1% and 0.3% of her salary, respectively.
The calculation of her Article 21 Income Tax every month is as follows:
Salary |
| Rp 5,000,000 |
Work Accident Insurance Premium |
| Rp 50,000 |
Life Insurance Premium |
| Rp 15,000 |
Gross Income |
| Rp 5,065,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp5,065,000 | Rp 253,250 |
|
2. Annual Pension Contribution | Rp 50,000 |
|
3. Old-Age Benefit Contribution | Rp 100,000 |
|
|
| Rp 403,250 |
Monthly Net Income |
| Rp 4,661,750 |
Annual Net Income |
|
|
12 x Rp4,661,750 |
| Rp 55,941,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
Annual Taxable Income |
| Rp 1,941,000 |
Article 21 Income Tax Payable in a Year |
|
|
5% x Rp1,941,000 |
| Rp 97,050 |
Article 21 Income Tax Payable in a Month |
|
|
1/12 x Rp97,050 |
| Rp 8,087.50 |
Tax Calculation for December Period |
|
|
Article 21 Income Tax Payable in a Year |
| Rp 97,050 |
Article 21 Income Tax for January to November |
|
|
11 x Rp8,087.50 |
| Rp 88,962.50 |
Article 21 Income Tax Payable for December Period |
| Rp 8,087.50 |
Recipients of bonus, holiday allowance, profit sharing given annually
Jaenudin (unmarried) works at PT Nafa Jaya and earns a salary of Rp5,000,000 per month. In March 2016, he received a bonus of Rp8,000,000 in addition to his Rp5,000,000 salary. Every month, he pays a pension contribution of Rp80,000 to a pension funds established with the approval of the Minister of Finance.
The method of calculating Article 21 Income Tax on his bonus is as follows:
a. Article 21 Income Tax on Salary and Bonus (annual income)
Annual Income |
|
|
12 x Rp5,000,000 |
| Rp 60,000,000 |
Bonus |
| Rp 8,000,000 |
Annual Gross Income |
| Rp 68,000,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp68,000,000 | Rp 3,400,000 |
|
2. Annual Pension Contribution |
|
|
12 x Rp80,000 | Rp 960,000 |
|
|
| Rp 4,360,000 |
Annual Net Income |
| Rp 63,640,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
Annual Taxable Income |
| Rp 9,640,000 |
Article 21 Income Tax Payable |
|
|
5% x Rp9,640,000 |
| Rp 482,000 |
b. Article 21 Income Tax on Annual Salary
Annual Income |
|
|
12 x Rp5,000,000 |
| Rp 60,000,000 |
Annual Gross Income |
| Rp 60,000,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp60,000,000 | Rp 3,000,000 |
|
2. Annual Pension Contribution |
|
|
12 x Rp80,000 | Rp 960,000 |
|
|
| Rp 3,960,000 |
Annual Net Income |
| Rp 56,040,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
Annual Taxable Income |
| Rp 2,040,000 |
Article 21 Income Tax Payable |
|
|
5% x Rp2,640,000 |
| Rp 102,000 |
c. Article 21 Income Tax on Bonus
The Article 21 Income Tax on Bonus is
Rp482,000 – Rp102,000 = Rp380,000.
Article 21 Income Tax on income of employees transferred in a current year
When an employee is transferred, it does not mean the employee stops working for the company they work at. The employee still works for the same company and only changes their work location. Thus, to calculate Article 21 Income Tax, the annual basis still applies.
Didin Qomarudin, an unmarried man, is an employee at PT Nusantara Mandiri in Jakarta. On 1 June 2016, he was transferred to a branch office in Bandung and on 1 October 2016, he had another transfer to a branch office in Garut.
Didin's monthly salary is Rp5,000,000 and he pays a monthly pension contribution of Rp100,000. When working at PT Nusantara Mandiri, his salary is his only income.
The calculation of his Article 21 Income Tax is as follows:
I.5.1. Jakarta Head Office
Salary in Jakarta |
|
|
5 x Rp5,000,000 |
| Rp 25,000,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp25,000,000 | Rp 1,250,000 |
|
2. Annual Pension Contribution |
|
|
5 x Rp100,000 | Rp 500,000 |
|
|
| Rp 1,750,000 |
Net Income for 5 Months |
| Rp 23,250,000 |
Annual Net Income |
|
|
12/5 x Rp23,250,000 |
| Rp 55,800,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
Annual Taxable Income |
| Rp 1,800,000 |
Article 21 Income Tax Payable in a Year |
|
|
5% x Rp1,800,000 |
| Rp 90,000 |
Article 21 Income Tax Payable for 5 Months |
|
|
5/12 x Rp90,000 |
| Rp 37,500 |
Article 21 Income Tax Withheld from January to May 2016 |
|
|
5 x Rp7,500 |
| Rp 37,500 |
Note:
The Article 21 Income Tax withheld from January to May each month is Rp7,500.
Filling out withholding Article 21 Income Tax receipt (Form 1721 A1) for Jakarta office
Salary (January to May 2016) |
|
|
5 x Rp5,000,000 |
| Rp 25,000,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp25,000,000 | Rp 1,250,000 |
|
2. Annual Pension Contribution |
|
|
5 x Rp100,000 | Rp 500,000 |
|
|
| Rp 1,750,000 |
Net Income for 5 Months |
| Rp 23,250,000 |
Annual Net Income |
|
|
12/5 x Rp23,250,000 |
| Rp 55,800,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
Annual Taxable Income |
| Rp 1,800,000 |
Article 21 Income Tax Payable in a Year |
|
|
5% x Rp1,800,000 |
| Rp 90,000 |
Article 21 Income Tax Payable for 5 Months |
|
|
5/12 x Rp90,000 |
| Rp 37,500 |
Article 21 Income Tax Withheld from January to May 2016 |
|
|
5 x Rp7,500 |
| Rp 37,500 |
Article 21 Income Tax Under/Overpayment |
| NIL |
Filling out withholding Article 21 Income Tax receipt (Form 1721 A1) for Bandung branch office
Salary (June to September 2016) |
|
|
4 x Rp5,000,000 |
| Rp 20,000,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp20,000,000 | Rp 1,000,000 |
|
2. Annual Pension Contribution |
|
|
4 x Rp100,000 | Rp 400,000 |
|
|
| Rp 1,400,000 |
Net Income for 4 Months |
| Rp 18,600,000 |
Net Income in Jakarta |
| Rp 23,250,000 |
Net Income for 9 Months |
| Rp 41,850,000 |
Annual Net Income |
|
|
12/9 x Rp41,850,000 |
| Rp 55,800,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
Annual Taxable Income |
| Rp 1,800,000 |
Article 21 Income Tax Payable in a Year |
|
|
5% x Rp1,800,000 |
| Rp 90,000 |
Article 21 Income Tax Payable for 9 Months |
|
|
9/12 x Rp90,000 |
| Rp 67,500 |
Article 21 Income Tax Withheld |
|
|
In Jakarta (according to Form 1721-A1) |
| Rp 37,500 |
In Bandung (4 x Rp7,500) |
| Rp 30,000 |
Article 21 Income Tax Under/Overpayment |
| NIL |
For Garut branch office
Salary (October to December 2016) |
|
|
3 x Rp5,000,000 |
| Rp 15,000,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp15,000,000 | Rp 750,000 |
|
2. Annual Pension Contribution |
|
|
3 x Rp100,000 | Rp 300,000 |
|
|
| Rp 1,050,000 |
Net Income in Garut (3 Months) |
| Rp 13,950,000 |
Net Income in Jakarta (5 Months) |
| Rp 23,250,000 |
Net Income in Bandung (4 Months) |
| Rp 18,600,000 |
Annual Net Income |
| Rp 55,800,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
Annual Taxable Income |
| Rp 1,800,000 |
Article 21 Income Tax Payable in a Year |
|
|
5% x Rp1,800,000 |
| Rp 90,000 |
Article 21 Income Tax Withheld |
|
|
In Jakarta and Bandung (according to Form 1721-A1) |
| Rp 67,500 |
Article 21 Income Tax Payable in Garut |
| Rp 22,500 |
Article 21 Income Tax Payable in a Month in Garut |
|
|
Rp22,500 : 3 |
| Rp 7,500 |
Filling out withholding Article 21 Income Tax receipt (Form 1721 A1) for Garut branch office
Salary (October to December 2016) |
|
|
3 x Rp5,000,000 |
| Rp 15,000,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp15,000,000 | Rp 750,000 |
|
2. Annual Pension Contribution |
|
|
3 x Rp100,000 | Rp 300,000 |
|
|
| Rp 1,050,000 |
Net Income in Garut (3 Months) |
| Rp 13,950,000 |
Net Income in Jakarta (5 Months) |
| Rp 23,250,000 |
Net Income in Bandung (4 Months) |
| Rp 18,600,000 |
Annual Net Income |
| Rp 55,800,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
Annual Taxable Income |
| Rp 1,800,000 |
Article 21 Income Tax Payable in a Year |
|
|
5% x Rp1,800,000 |
| Rp 90,000 |
Article 21 Income Tax Withheld |
|
|
In Jakarta and Bandung (according to Form 1721-A1) |
| Rp 67,500 |
Article 21 Income Tax Payable in Garut |
| Rp 22,500 |
Article 21 Income Tax Payable Withheld |
|
|
3 x Rp7,500 |
| Rp 22,500 |
Article 21 Income Tax Under/Overpayment |
| NIL |
Calculation of withholding Article 21 Income Tax on income partially or wholly earned in foreign currency
Djena Thompson is a permanent employee earning a salary in foreign currency of US$2,000 a month in January 2016. The prevailing exchange rate for January 2016 based on the Decree of the Minister of Finance is Rp13,766 per US$1.00. She is married with 1 child.
Monthly Salary |
|
|
US$2,000 x Rp13,766 |
| Rp 27,532,000 |
Deductible: |
|
|
1. Occupational/Functional Expense |
|
|
5% x Rp27,532,000 | Rp 1,376,600 |
|
Maximum Occupational/Functional Expense per Month | Rp 500,000 |
|
|
| Rp 500,000 |
Monthly Net Income |
| Rp 27,032,000 |
Annual Net Income |
|
|
12 x Rp27,032,000 |
| Rp 324,384,000 |
Annual Non-Taxable Income |
|
|
For the Taxpayer | Rp 54,000,000 |
|
For Being Married | Rp 4,500,000 |
|
For Having One Child | Rp 4,500,000 |
|
|
| Rp 63,000,000 |
Annual Taxable Income |
| Rp 261,384,000 |
Article 21 Income Tax Payable in a Year |
|
|
5% x Rp50,000,000 | Rp 2,500,000 |
|
15% x Rp200,000,000 | Rp 30,000,000 |
|
25% x Rp11,384,000 | Rp 2,846,000 |
|
|
| Rp 35,346,000 |
Article 21 Income Tax of January |
|
|
Rp35,346,000 : 12 |
| Rp 2,945,500
|
Activity participants
Djoni Imawan is an Indonesian professional badminton athlete living in Jakarta. He won the Indonesia Grand Prix Gold tournament and received a prize of Rp200,000,000.
The Article 21 Income Tax Payable on the prize from the Indonesia Grand Prix Gold tournament is:
5% x Rp50,000,000 | Rp 2,500,000 |
15% x Rp150,000,000 | Rp 30,000,000 |
| Rp 32,500,000 |
Note: If he does not have a Taxpayer Identification Number (TIN), the rate will be 20% higher.