Personal Income Tax is a tax collected from individuals imposed on income such as salaries, dividends, pensions and even interest. Indonesia’s government earns a significant revenue from personal income tax amongst all the taxes implemented.
It is the responsibility of every taxpayer’s employer to calculate any taxes that is required to be withheld from salaries and paying these taxes to the tax authorities monthly and providing the employees the annual tax figures.
Personal Income Tax Rates in Indonesia depend on a residency of an individual. A non-resident individual, defined as an individual who has stayed in Indonesia for lesser than 183 days in any 12-month period, will be taxed based on a 20% standard rate.
As for tax residents, they are taxed based on a progressive rate between 5% and 30% depending on the income they earn.