Jakarta Employees Face Salary Cuts under New Tax Formula
Jakarta. Several employees in Jakarta have voiced their grievances as their salaries for this month have experienced a decrease. This change is attributed to alterations in the calculation of personal income tax (PPh), effective since January 1, 2024,
According to the Government Regulation (PP), 58/2023 and Finance Minister Regulation (PMK) 168/2023 on income tax stipulated that the calculation should use the average effective rate (TER) method. This method involves monthly rates for each tax period, except for the last one in a year, and daily rates.
This change means that from January to November, the calculation for monthly income tax involves multiplying the gross income by the monthly effective rate. But in December or the last tax period, the calculation goes back to the usual method.
Putri, human resources manager at a building and infrastructure company in Jakarta, said that several employees were significantly affected by the change in tax calculation.
"Around 10 people experienced substantial deductions," she told Beritasatu.com, on Friday.
Employees had different reactions to the substantial deductions, ranging from confusion to concerns about upsetting their spouses. "They asked for a detailed breakdown of the deductions," she mentioned.
Despite earlier information sessions, employees were still taken aback by the size of the deductions. "The discrepancies vary, from Rp 800,000 ($50.5) to Rp 8 million. Their salaries range from a few million to Rp 60 million," she explained.
Dewi Marlina, an employee in the private sector in Jakarta, expressed disappointment with the January 2024 salary deduction. "Normally, the monthly deduction is Rp 3.35 million, but now it has gone up to Rp 3.84 million, a difference of Rp 500,000," she told Beritasatu.com.
The impact of this new calculation was particularly felt by employees who bear their taxes. However, for employees whose taxes are covered by the company, there will be no changes due to the implementation of the TER calculation.
While the new calculation method with the TER approach may affect monthly salaries for office employees, this difference will disappear in the final PPh calculation, especially in December. The PPh 21 calculation remains consistent throughout the year, making it easier for employees to figure out their monthly taxes.
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