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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
THR payment in Indonesia is also known as the religious holiday allowance. Following the law, permanent employees must receive an additional one month salary once a year before their most important religious holiday.
How does the law regulate THR payment in Indonesia? How to calculate the amount and what are the THR payment deadlines in 2025?
What is a Tunjangan Hari Raya (THR) payment in Indonesia?
Indonesia has four types of holidays:
- Religious
- National
- International
- Commemorative
THR is the yearly labor allowance. According to the law, companies are obliged to submit the THR payment in Indonesia to their employees based on their religion.
For vast majority of Indoneian employees, this means that they receive a 13th salary during Ramadhan, just before the Idul Fitri holidays.
The importance of the THR payment for your Indonesian employees
THR is essentially a guaranteed bonus, a 13th month salary. But it’s cultural significance goes beyond a financial bonus.
As a family-oriented society, Indonesians take celebrating their holidays very seriously. And with that come the additional costs – driving or flying to visit relatives, buying gifts, making donations, etc.
As an employer, we encourage you to go beyond paying the THR and celebrate the major celebrations such as Ramadhan also with your team. Some of the activities include:
- Bukber – a team event to break the fast together (almost every company in Indonesia does it at least once during Ramadhan)
- Shorter office hours to allow the staff to leave early during Ramadhan
- Provide time and space for Tarawih prayer (special Ramadhan prayer)
How to know if you are eligible to receive THR in Indonesia?
Every full-time employee is eligible for a THR payment. The employee does not have to have worked for a full year to receive it. If the employee has worked for less than a year, the THR salary is adjusted proportionally.
Freelance workers receive payments based on their contract and are not required to receive a THR. However, it’s important to understand that the nature of the work for freelancers cannot be of a full-time employee or otherwise they automatically become employees in the eyes of the law.
The government recognizes six official religions:
- Islam
- Protestantism
- Catholicism
- Hinduism
- Buddhism
- Confucianism
Representatives of all the above receive the special holiday bonus once a year, before their religious holiday.
Note that you can only pay or receive the THR payment in the form of money.
#1 When is THR in Indonesia paid out?
As THR is a payment connected directly to religion, it is paid out maximum two weeks before celebrations. The time depends on the employee’s religion and the approaching holiday.
THR dates in 2025:
| Holiday | THR payment deadline in 2025 |
| Idul Fitri (end of Ramadan) for Muslims | 22 March 2025 |
| Christmas for Christian Protestants and Catholics | 18 December 2025 |
| Silence Day, also known as Seclusion (Nyepi) for Hindus | 28 February |
| Vesak (Waisak) for Buddhists | 10 May |
#2 How much is the THR payment in Indonesia?
The THR amount is a one-time salary for those who have worked for the company 12 months without stopping. If it is less than 12 months, the THR payment is proportional to how long the employee has worked in the company (e.g., if six months then half the salary). THR “salary” includes base salary and fixed monthly allowance but does not have to cover other payments such as bonuses.
#3 When should the THR payment take place?
THR should be paid latest seven days before the beginning of the respective holiday. It is an essential aspect that the employer is punctual about paying out the THR payment.
#4 What happens if the employer cannot pay THR in Indonesia?
If a company is in financial difficulties, it is also struggling to pay the staff, not to mention bonuses such as the THR. However, note that your employer must face the consequences for not following the required timelines:
- A penalty of 5% for the delay of the THR payment – your employer must still pay the bonus
- Employer suffers loss and isn’t able to settle the amount in any way – your employer must propose an exception for 30 days before the festive holiday to the local Manpower Department
How THR affects hiring in Indonesia
Essentially THR is the 13th salary all your permanent employees receive. For example, if an employee receives a salary of $1,000 a month, their annual salary would be US$ 13,000, and the monthly average would be $1083.
However, employees rarely calculate their salaries this way. In their mind, they would still be receiving a $1,000 monthly salary, with a guaranteed bonus.
Hiring employees after Ramadan
It also means that the worst time to recruit people is before they are waiting for their THR payment. It’s not economically wise to resign from your previous job before you are about to receive a big bonus. On the other hand, the best time to hire is right after Ramadan because the prospective candidates have just received their bonuses and are more eager to look for a new job.
For any further questions regarding employment matters in Indonesia, contact Emerhub via the form below.
