Tax Options for Married Couples and Income Tax Impact

In Indonesia, married couples can choose among three tax statuses: Head of Family (default), Separate Property, or Separate filing. Typically, the wife's income is combined with the husband's for annual tax return (SPT) calculation.

When the wife earns income from a single employer and tax is withheld under Article 21, that income is treated as final tax. Under the Head of Family status, the wife's earnings are not subject to progressive rates, resulting in a lower overall tax than Separate Property or Separate filing, which merge both incomes.

Therefore, for couples where the wife has only one employer, selecting Head of Family yields a smaller tax liability and simplifies filing, as only the husband files the return. Choosing Separate Property or Separate filing may increase tax owed and administrative complexity.