Sri Mulyani Provides a Salary Simulation of IDR 5 Million Subject to a 5 Percent Tax Withholding – The government imposed new rules income tax (PPh) Article 21. This change is contained in Law Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP).

This rule is then clarified in Government Regulation Number 55 of 2022 concerning Adjustment of Regulations in the Income Tax Sector.

Thus, workers with an income of IDR 4.5 million per month or IDR 54 million per year are no longer subject to income tax or become PTKP. The percentage of PPh tax imposition under Article 21 is still the same, namely 5 percent and is progressive.

“The change in the PPh rate layer is to protect lower middle-income people. Many people in the lower middle class actually have a lower tax burden,” said the Minister of Finance Sri Mulyani Indrawati quoted from Compass TVSunday (1/1/2023).

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income tax The government deducts itself through the employer company from the employee’s salary. The calculation is the salary minus the non-taxable income (PTKP) and then multiplied by the progressive tax rate PPh Article 21.

Sri Mulyani gave an example, for employees with a salary of Rp. 5 million per month or Rp. 60 million per year, the income tax that must be paid to the state treasury is Rp. 300,000 per year, aka Rp. 30,000 in a month.

“This is an income of Rp. 60 million per year minus Rp. 54 million, which is Rp. 6 million and multiplied by 5 percent. This is only Rp. 300,000 a year to pay taxes,” explained Sri Mulyani.

That is the assumption of calculating tax deductions for employees who do not have dependents. For taxpayers who have dependents such as children, there are other deductions besides PTKP.

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“If you are married, there is a state allowance for your wife and if you have children, there is an additional one,” said Sri Mulyani.

This new rule is also good news for workers with a salary of Rp. 4.5 million per month, whose salary was previously cut by 5 percent, are now exempt from PPh or become PTKP.

“The HPP Law makes it easier for you to not pay Rp. 54 million. But now the HPP Law increases it from Rp. 50 million to Rp. 60 million. So that you only pay 5 percent of the first Rp. 60 million,” explained Sri Mulyani.

Likewise, the 15 percent PPh rate which was originally imposed for taxpayers with income above IDR 50 million to IDR 250 million, has now been changed to income above IDR 60 million to IDR 250 million.

The following are the progressive PPh Article 21 tariff provisions:

  • Taxable income up to IDR 60 million is subject to a PPh rate of 5 percent
  • Taxable income of more than IDR 60 million to IDR 250 million is subject to a 15 percent tax
  • Income of more than IDR 250 million up to IDR 500 million with a 25 percent PPh rate
  • Taxable income above IDR 500 million up to IDR 5 billion by 30 percent
  • Income above IDR 5 billion is subject to PPh of 35 percent.

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