Learn about the 13th month salary in Indonesia thanks to Horizons’ up-to-date guide.
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Yes, the 13th-month salary is mandatory in Indonesia. It is called the Tunjangan Hari Raya (THR) payment and is linked to religious holidays.
The 13th-month pay is simply an entire month’s salary (annual income divided by 12) plus any fixed monthly allowance.
The payment needs to be made at least one week before the main religious holiday observed for the employee. For this reason, the payment date can vary depending on the religion of the employee.
Since the 13th month of pay in Indonesia is required by law, employers should factor this into the budget when hiring employees. Employers looking to hire in Indonesia should divide their annual salary by 13 and use this as the baseline monthly amount when recruiting employees in Indonesia.
Yes, it is taxable as normal income.
The 13th month salary is required by law in Indonesia. It is a payment for the religious holiday observed by the employee and should usually be paid according to their preference.
There are normally not more than 13 months of pay in Indonesia.
Your business can easily hire employees in Indonesia without opening a local entity.
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