THR is one of the most awaited things ahead of Eid al-Fitr. Based on the Circular of the Minister of Manpower of the Republic of Indonesia Number M/2/HK.04.00/III/2023 concerning the Implementation of Providing Religious Holiday Allowances in 2023 for Workers/Labourers in Companies, THR is the right of workers or laborers that must be paid by the company or employer.
Then, what is meant by THR, and what provisions should we know? The following is a complete review of THR, starting from the definition, legal basis, a mechanism for giving THR, how to calculate THR, to tips for using THR effectively and wisely.
1. Meaning of THR
THR stands for Hari Raya Allowance or income in the form of a bonus outside of salary which is given once a year in rupiah. In accordance with the provisions contained in the Circular of the Minister of Manpower Concerning the Implementation of Providing Religious Holiday Allowances in 2023 for Workers/Labourers in Companies, the provision of religious holiday allowances (THR) for workers or laborers is an effort to meet the needs of workers or laborers and their families in welcoming religious holidays.
In other words, THR is not only paid for those who are Muslim but for all workers according to their respective religious holidays. This is in accordance with what is stated in Permenaker No. 6 of 2016.
The religious holidays referred to here are Eid al-Fitr, Christmas, Nyepi, Waisak, Chinese New Year, and other holidays according to the religion adopted by the worker or laborer.
2. Dasar Hukum THR
The policy regarding the provision of THR has been regulated on the following legal basis.
- Government Regulation no. 36 of 2021 concerning Wages.
- Government Regulation no. 2016 concerning Religious Holiday Allowances for Workers/Labourers in Companies.
- Circular Letter of the Minister of Manpower of the Republic of Indonesia Number M/2/HK.04.00/III/2023 concerning the Implementation of Providing Religious Holiday Allowances in 2023 for Workers/Laborers in Companies.
3. Mechanism of Giving THR
Based on the applicable regulations, the mechanism for giving THR is carried out with the following provisions.
3.1 Holiday Allowance Recipients
THR is the right of workers or laborers who fall into the criteria below.
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Workers or laborers who have worked for 1 (one) month continuously or more.
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Workers or laborers who have work contracts with employers in accordance with a work agreement for a predetermined time or a work agreement for an unspecified time. In other words, those who are entitled to THR are workers with the status of Permanent Employees (PKWTT), Contract Employees (PKWT), and Freelance Workers in accordance with applicable regulations.
3.2 Amount of Holiday Allowance Received
Adapun besaran THR keagamaan yang diterima oleh pekerja atau buruh ditetapkan dari masa kerja yang ada.
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THR is in the form of 1 (one) month's salary for workers or laborers with a working period of 12 (twelve) months or more.
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THR is given according to the length of service (pro rata) for workers or laborers who have worked for less than one year or 12 months with the calculation:
(Working Period/12 Months) X 1 Month Salary
- For freelance daily workers who have worked for 12 months or more, THR is given according to the average wage received in the last 12 months before religious holidays.
- Whereas for casual daily workers with less than 12 months of service, the THR given is calculated from the average wage received each month during the working period.
3.3 Time for Giving Holiday Allowances
Based on the Circular of the Minister of Manpower concerning the Implementation of Giving Religious Holiday Allowances in 2023 for Workers/Labourers in Companies, religious THR must be paid by the company or the employer no later than 7 (seven) days before the religious holiday.
4. How to Calculate THR Easily
Some of us may still be confused about how to calculate the correct THR according to the THR calculation according to the Job Creation Law. So that you don't feel worried, consider the following calculation example.
The formula for calculating THR
(Working Period/12 Months) X 1 Month Salary
Calculation example:
1. Ahmad is an employee at PT Maju Jaya with a monthly salary of IDR 5,000,000. He has worked at the company for 12 months or 1 year. So, the THR money that Ahmad gets is 1 (one) month's salary.
2. Mira is a permanent employee at PT Serba Bisa with a monthly salary of IDR 6,500,000. He has worked for 5 months, then the THR he gets is:
(5 Months/12 Months) X IDR 6,500,000 = IDR 2,708,333.
What about contract employees? How to calculate THR for permanent and contract employees is not much different, namely using the same formula. For example, you are a contract employee at a company with a basic salary of Rp. 7,500,000 with a working period of 7 months, then the calculation is (7 Months/12 Months) X Rp. 7,500,000 = Rp. 4,375,000.
How, isn't it quite easy to calculate the amount of THR that you will get if the working period is less than 12 months?
Keep in mind, THR is an object of income tax, especially PPh 21. So, the THR money that you receive will be subject to tax deductions in accordance with applicable regulations. However, in general, companies will provide THR that has been deducted beforehand. For more details regarding the mechanism for calculating THR deductions, you can see Appendix PER-16/PJ/2016.
5. Sanctions For Companies That Do Not Provide THR
THR is the right of employees or workers who are given before religious holidays, therefore the government stipulates strict sanctions for companies that intentionally provide THR late or don't provide THR at all.
The sanctions that will be obtained are in the form of warning letters, administrative sanctions, and the worst is an operational freeze where the company concerned is no longer able to carry out its business activities as before.
6. Tips on Using THR Effectively and Wisely
Towards a religious holiday, of course, we have a series of needs that need to be met. No doubt, the existence of THR money can greatly lighten the existing burden. However, don't let your THR money run out due to a hedonistic lifestyle!
Make sure you apply the following tips for taking advantage of BFI Finance's THR!
6.1. Determine the Priority Scale
Distinguish between needs and wants. Make sure you are able to understand which are included in the needs and wants. Don't get upside down, ok!
Then, make sure you have set aside some of the money you have to pay zakat, infaq, and alms.
6.2. Spend THR Money in Order of Priority
Make sure you spend the money in accordance with the priority scale that has been made. In addition, you can also take advantage of existing promos and discounts ahead of Eid to save on the budget you have.
6.3. Set Aside 10-20% for Savings and Investment
Lastly, don't forget to set aside some of your THR money for saving and investing. There are many ways you can choose, from saving in special savings accounts, mutual funds, bonds, gold, and the like.
For savings and investment purposes, you can set aside around 10-20% of the THR money you have.
How? Is it easy to manage THR money? For more details, watch this video!
BFI friends, that's a discussion regarding THR, namely: Understanding, How to Calculate, and Tips on Using It. Make sure you understand the rules for giving THR carefully. Hopefully, this article can be useful for all readers.
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