Statutory and legislative payroll changes in Indonesia, each linked to the page it was checked against. For information only, not legal or tax advice: confirm details with the source before acting. See the terms.
Government-borne PPh 21 (DTP) extended to 2026 for employees earning up to IDR 10 million a month
Effective Jan 2026
PMK-105, applicable from 31 December 2025, extends the Article 21 income tax borne by government (PPh 21 DTP) facility, first set by PMK-10 of 4 February 2025, to the January-December 2026 tax periods for employees in the footwear, textile and apparel, furniture, leather goods and tourism sectors.
For the employer
- Check the entity's KLU code registered in Coretax falls within an eligible sector.
- Apply the facility to permanent employees with fixed and regular gross income not exceeding IDR 10 million per month, and non-permanent employees up to IDR 500,000 per day or IDR 10 million per month.
- Pay the PPh 21 DTP amount in cash to the employee at the time of salary payment.
For the employee
- Eligible employees receive the Article 21 tax amount in cash with their salary; any excess over annual tax payable is not refunded.
Source: RSM Indonesia - Client Alert 21 January 2026 · Last verified 1 October 2026
Government Regulation 49/2025 changes the minimum wage formula for 2026
Applies to 2026 wages
Government Regulation No. 49 of 2025 replaced the previous wage-setting framework after a Constitutional Court decision. The alpha coefficient used in the formula now ranges between 0.5 and 0.9, compared with the previous cap of 0.3, and sectoral minimum wages have been reintroduced in some regions.
For the employer
- Check the 2026 provincial (UMP) and regency/city (UMK) minimum wage decrees for each work location.
- Check whether a sectoral minimum wage applies to your industry (for example construction, energy, high-tech manufacturing); it can exceed the standard UMP or UMK.
For the employee
- Minimum wage floors for 2026 are set under the new formula with a higher alpha range.
Source: RSM Indonesia - PP 49/2025 minimum wage regulation · Last verified 1 October 2026