Govt‑Funded PPh 21 for Salaries ≤10 M Rupiah in Selected Sectors

From January 2025, the government introduced a tax incentive in which Income Tax Article 21 (PPh 21) is funded by the state (PPh 21 DTP) under Ministerial Regulation No 10/2025. The measure applies to employees whose gross salary does not exceed Rp10 million per month and who work in designated labor‑intensive industries.

Eligibility requires three conditions: (1) employment in the textile, footwear, furniture, or leather sectors; (2) income ceiling of ≤Rp10 million for permanent staff or ≤Rp500 thousand per day for non‑permanent workers; (3) the income level is taken from the employment contract, not the actual monthly receipt. Employers cease withholding PPh 21 from wages and instead report and pay the tax as a government expense in the monthly PPh 21/26 return.

The incentive raises workers’ net pay and eases companies’ payroll costs, potentially boosting household consumption and sector stability. The benefit materialises only if employers submit accurate reports on time and employees keep their tax IDs (NPWP) active and belong to the qualifying industries.