Indonesia THR (Tunjangan Hari Raya): Rules, Calculation, and Compliance (2026)

THR (Tunjangan Hari Raya: Religious Holiday Allowance) is a mandatory annual bonus in Indonesia governed by Government Regulation 36/2021. All employees with at least 1 month of continuous service are entitled to THR. Employees with 12+ months receive 1 full month's salary. The employer must pay THR at least 7 days before the employee's religious holiday.

What Is THR and Who Is Entitled?

THR is a mandatory annual payment tied to the employee's religious holiday. Indonesia recognizes six official religions: Islam, Protestantism, Catholicism, Hinduism, Buddhism, and Confucianism. Each employee nominates their religious holiday for THR payment. For Muslim employees (87% of the population), THR is paid before Eid al-Fitr (Lebaran).

All employees with at least 1 month of continuous service are entitled to THR. This includes permanent (PKWTT) and fixed-term (PKWT) employees, daily workers, and part-time workers. Employees who resign before the religious holiday are entitled to THR if they have worked 1+ months. Employees terminated before the religious holiday are also entitled.

How Is THR Calculated?

THR is calculated on the employee's monthly salary or fixed monthly wages. Salary includes basic salary plus fixed allowances. Variable components (overtime, performance bonuses) are excluded unless they are fixed monthly payments. If the company provides benefits in kind (housing, transportation) these are not included in the THR calculation base unless specified in company regulations.

When Must THR Be Paid?

THR must be paid at least 7 calendar days before the employee's religious holiday. For Muslim employees (Eid al-Fitr), this means 7 days before Eid. For Christian employees (Christmas), 7 days before December 25. The employer determines the payment date based on each employee's nominated religious holiday.

Late THR payment triggers a penalty of 5% of the total THR amount. The penalty increases the total payment obligation but does not reduce the THR amount owed to the employee. The Ministry of Manpower actively enforces THR compliance through inspections and a complaint hotline (Posko THR) that operates annually before major religious holidays.

What Happens If an Employee Has Two Religious Holidays?

Each employee receives THR once per year, tied to one religious holiday. If an employee converts religion during the year, they receive THR for the religious holiday that comes first. If the employee already received THR for the earlier holiday, they do not receive a second THR for the new religion's holiday in the same year.

What Is the Tax Treatment of THR?

THR is subject to PPh 21 income tax. There is no tax exemption for THR in Indonesia (unlike the Philippines' PHP 90,000 exemption for 13th month). The employer withholds PPh 21 on the THR amount using the applicable tax rate. Under the TER method (2024+), the THR is included in the month's gross income for effective rate calculation.

THR is not subject to BPJS contributions. BPJS Ketenagakerjaan and BPJS Kesehatan contributions are based on monthly wages, and THR is classified as an annual payment, not a monthly wage component. This reduces the total cost of THR for employers: only PPh 21 withholding applies. Aniday's EOR Indonesia (Aniday EOR Indonesia) manages all THR payments and tax compliance.

Can the employer pay THR in installments?

No. GR 36/2021 requires THR to be paid in a single lump sum at least 7 days before the religious holiday. Installment payment is not permitted. The full amount must be paid in one payment. Employers who cannot pay in full face the 5% late penalty and Ministry of Manpower enforcement action.

Is THR mandatory for contract (PKWT) employees?

Yes. All employees with 1+ month of service are entitled to THR regardless of contract type. PKWT (fixed-term), PKWTT (permanent), daily workers, and part-time workers all receive THR. The only requirement is 1 month of continuous service with the employer.

What if the employee has not worked 12 months?

The employee receives pro-rated THR. Formula: (months worked / 12) × 1 month salary. An employee who has worked 5 months receives 5/12 of one month's salary. Fractions of a month count as a full month. An employee who started 2 months and 10 days ago receives 3/12 of monthly salary.

Does THR apply to employees who resign before the holiday?

Yes. An employee who resigns 30 or fewer days before the religious holiday is entitled to THR. An employee who resigns more than 30 days before the holiday is not entitled under GR 36/2021. The 30-day window is measured from the effective resignation date to the religious holiday date.

What is the penalty for not paying THR?

The Ministry of Manpower can impose administrative sanctions: written warning, limitation of business activities, temporary business suspension, or business license freezing. Financial penalty: 5% of total THR obligation for late payment. In practice, the Ministry conducts annual Posko THR inspections and responds to employee complaints. Repeated non-compliance affects business licensing.

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