I. First Understand: THR Is Not Optional — It Is a Legally Mandatory Obligation
THR (Tunjangan Hari Raya) is Indonesia’s Eid al‑Fitr religious holiday allowance, often referred to as a “13th‑month salary.” It is governed by Indonesian Minister of Manpower Regulation No. 6/2016 and is a mandatory legal benefit that eligible employees must receive in full and on time. It is not a discretionary bonus or subsidy, and no company is exempt.
THR is a legally mandated benefit, not a voluntary bonus. All companies, regardless of size, must strictly fulfill this payment obligation with no exceptions.
II. Who Is Eligible? Don’t Miss Anyone!
- Permanent employees, fixed‑term and permanent contract workers: full THR according to the applicable standard, regardless of position or level
- Daily‑paid and piece‑rate workers: 1 month’s average wage if working ≥1 year; pro‑rated average wage for <1 year
- Permanent employees dismissed within 30 days before Eid al‑Fitr: THR calculated based on actual length of service
- Freelancers working continuously for the same company for >12 months: THR equivalent to 1 month’s salary
- Teachers and lecturers without performance allowances: applicable professional allowances or an additional subsidy equal to up to 1 month’s salary (equivalent to THR)
Employees (including PPPK) with less than 1 month of continuous service are not eligible for THR, and companies are not required to pay it.
III. 3 Mandatory THR Requirements for 2026 — No Room for Error
1. Deadline: Must Be Paid by March 14 — Late Payment = Penalties
2. Payment Method: Cash / Bank Transfer Only — All Other Forms Are Illegal
THR may not be replaced with goods, gift cards, vouchers, or in‑kind benefits. Installment payments are prohibited. Payment must be made once in full in Indonesian Rupiah, either in cash or via bank transfer.
3. Calculation Standard: Pro‑rated by Tenure; Base ≥ Local Minimum Wage
The THR calculation base must not be lower than the 2026 applicable Provincial Minimum Wage (UMP) at the employee’s workplace. For tenure under 12 months, THR is pro‑rated.
- 12+ months of continuous work: 1 month’s salary
(Base = basic salary + fixed allowances; excludes overtime, performance bonuses, and other variable pay)
- <12 months: Pro‑rated formula:
2026 UMP in Jakarta: IDR 5,729,876 / month
An employee with 6 months of service:
THR = 5,729,876 ÷ 12 × 6 = IDR 2,864,938
(≈ RMB 1,186 at February 2026 exchange rate: 1 IDR ≈ 0.000414 CNY)
IV. 2026 Key Regional Minimum Wage (UMP) Reference
- Jakarta: IDR 5,729,876 / month
- Bekasi City, West Java: IDR 5,999,443 / month
- Surabaya City, East Java: IDR 5,288,796 / month
- Tangerang City, Banten: IDR 5,399,405 / month
V. Severe Consequences for Violations — Watch These Penalties
Official reporting channels are now open. Violations can lead to fines, business suspension, or license revocation.
- Late payment: Fine of 5% of total THR owed, plus full back payment — non‑waivable
- Refusal to pay or underpayment: Written warning, restricted business activities, production suspension, business closure, bank account freezing, or even license revocation for serious cases
VI. Practical Compliance Steps for Companies: 4‑Step Guide
- Confirm timeline: Use March 21 (Eid) as reference; set March 14 as the hard deadline. Plan funding and payment processes in advance.
- Verify employee data: Check contract types (PKWT/PKWTT) and continuous months worked to confirm eligibility and avoid missing or incorrect payments.
- Calculate accurately: Use local UMP as the floor, pro‑rate by tenure, and keep calculation records and ledgers.
- Follow proper procedures: Pay in full once via IDR cash or bank transfer; keep proof of payment. Also fulfill BPJS social security contributions based on UMP.
