Salary Below IDR10 Million? Tax to be Borne by Government Next Year

JAKARTA, DDTCNews - The government plans to expand the scope of the government-borne (ditanggung pemerintah/DTPin Indonesian) Article 21 Income Tax incentive. A total of 7.5 million workers are set to receive the government-borne Article 21 Income Tax incentive.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the incentive will be extended to workers across all sectors, provided their wages are below IDR10 million.

"At present, this applies to labour-intensive industries and tourism. Next year, it will be extended to all sectors where salaries are below IDR10 million," he said, as quoted on Thursday (1/10/2026).

For information, the government-borne Article 21 Income Tax is being granted this year pursuant to Minister of Finance Regulation (MoF Reg.) 105/2025. There are 5 sectors receiving government-borne Article 21 Income Tax under that regulation, namely the footwear, textiles and garments, furniture, leather and leather goods and tourism industries.

The incentive is granted to employees who fulfil the criteria as certain permanent employees or certain non-permanent employees. A permanent employee qualifies as a certain permanent employee if they:

• hold a taxpayer identification number (TIN)/national Identification number (nomor induk kependudukan/NIK in Indonesian) administered by the Directorate General of Population and Civil Registration and already integrated with the Directorate General of Taxes (DGT) system;
• receive fixed and regular gross income not exceeding IDR10 million in the January 2026 taxable period if the employee commenced work before January 2026 or in the taxable period of their first month of work if the employee commenced work in 2026; and
• do not receive any other Article 21 Income Tax incentive.

Meanwhile, a certain non-permanent employee is a non-permanent employee who:

• holds a TIN/national Identification number administered by the Directorate General of Population and Civil Registration and already integrated with the DGT system;
• receives wages averaging no more than IDR500,000 per day where wages are paid on a daily, weekly, unit or lump-sum basis, or no more than IDR10 million where wages are paid on a monthly basis;
• does not receive any other Article 21 Income Tax incentive.

The government-borne Article 21 Income Tax must be paid in cash to the employee, including where the employer provides an Article 21 Income Tax allowance or bears the Article 21 Income Tax.

Cash payment of the government-borne Article 21 Income Tax to the employee is not taken into account as taxable income. (rig)