How to Calculate PPh 21 for Permanent Staff Starting This Year

Employers hiring permanent staff during the tax year must calculate PPh 21 (Income Tax Article 21) in line with PMK 168/2023. The rule applies to employees who start after 1 January, including those joining mid‑year.

The calculation uses the monthly effective rate (TER) applied to gross earnings, while the final tax period is based on the annual total minus tax already withheld. If the taxpayer (SPDN) is subject from the start of the year, net income is not annualized; if the liability begins after January, net income is annualized and prorated to the relevant months.

Accurate application ensures correct withholding, prevents over‑ or under‑payment, and obliges the employer to issue the withholding certificate (Form A1) no later than the end of the month following the final tax period.