For every employer in Indonesia, Tunjangan Hari Raya (THR) Keagamaan is one of the most critical annual obligations. While it may look like just another payroll item, the rules are precise and strictly enforced. A misstep—whether paying late, paying less than required, or excluding eligible employees—can trigger fines, government sanctions, and even public complaints through the Ministry of Manpower’s dedicated “Posko THR” hotline.
This guide walks you through the essentials: who qualifies, how much to pay, when to pay, and what happens if you don’t comply. Whether you manage a small startup or a large multinational, understanding THR is not optional—it’s a core part of Indonesia’s employment law.
What exactly is THR?
THR, or Tunjangan Hari Raya Keagamaan, is a mandatory annual allowance tied to an employee’s religious holiday. For most, that means Idul Fitri (Eid al-Fitr), but Christian employees may receive THR before Christmas, Hindus before Nyepi, Buddhists before Waisak, and so forth.
The legal basis for Tunjangan Hari Raya (THR) is primarily stipulated under the Minister of Manpower Regulation (Permenaker) No. 6/2016, which defines eligibility and sanctions for non-compliance. In terms of wage calculation, the newest framework refers to Government Regulation (PP) No. 51 of 2023 on Wages, which updates previous provisions under PP No. 36/2021. Under this rule, the definition of “one month’s wage” includes basic salary plus fixed allowances, while variable components—such as overtime pay, performance bonuses, or daily transport stipends—are excluded from the calculation.
In short: THR is not a bonus. It is a statutory right.
Who Qualifies for THR?
One of the biggest compliance mistakes employers make is misunderstanding eligibility. Here’s the breakdown:
- Permanent employees (PKWTT): Always eligible.
- Fixed-term employees (PKWT): Eligible, as long as they have worked at least one month continuously.
- Outsourcing/contracting workers: Entitled to THR, but it must be paid by their outsourcing company (perusahaan alih daya), not by the client.
- Daily workers and piece-rate workers: Eligible. Their “monthly wage” is based on the average pay they received over the last 12 months (or fewer months if they haven’t been employed that long).
- Foreign employees (TKA): If employed under Indonesian contracts and on local payroll, they are also entitled to THR.
- Gig workers/partners without an employment contract: Not covered by the regulation unless company policy or agreements say otherwise.
In short, if you have a legal employment relationship with someone, expect to pay them THR.
How Much Should Employers Pay?
The rule is straightforward but nuanced:
- Employees with 12 months of service or more: Receive one month’s wage (basic salary + fixed allowances).
- Employees with less than 12 months: Receive a pro-rated amount. Formula:
(Monthsofservice÷12)×Onemonth’swage(Months of service ÷ 12) × One month’s wage(Monthsofservice÷12)×Onemonth’swage
Examples:
- An employee with a monthly salary of IDR 10,000,000 who has worked 1 year or more → THR = IDR 10,000,000.
- An employee with the same salary who has worked 6 months → THR = (6/12 × 10,000,000) = IDR 5,000,000.
For daily workers, if they’ve worked for at least a year, their one-month wage is the average of the last 12 months’ pay. If less than a year, the average is calculated from the actual months worked, then pro-rated.
This prevents confusion in industries like hospitality, retail, or manufacturing, where daily and piece-rate arrangements are common.
When to Pay THR?
The deadline is crystal clear: THR must be paid no later than seven days before the employee’s religious holiday.
This means:
- For Idul Fitri, employers should prepare to disburse THR at least one week before the first day of Lebaran.
- For employees of other religions, payment should follow the same rule tied to their holiday.
The Ministry of Manpower reinforces this every year in its official circular. In 2025, the instruction was again repeated: THR must be paid in full, no installments allowed.
What Happens If You Don’t Pay?
Failing to pay THR correctly isn’t just an internal HR problem—it can quickly escalate to government enforcement. Sanctions include:
- 5% Administrative Fine
Employers who are late must pay an additional 5% of the THR owed. This fine is on top of the THR itself—it doesn’t cancel the original obligation. - Administrative Sanctions
Beyond fines, employers may receive formal warnings, restrictions on their business activities, suspension of operations, or even revocation of licenses. - Public Complaints and Monitoring
The Ministry of Manpower sets up a Posko THR (THR Complaint Post) every year. Employees can report non-compliance directly, and the authorities are known to investigate complaints swiftly.
The reputational damage can be as serious as the financial penalty—especially for foreign-owned companies in Indonesia, where labor compliance is closely watched.
Practical Scenarios Employers Often Face
- New hires: If someone joined two months before Lebaran, they are still entitled to a proportional THR (2/12 of their monthly wage).
- Termination before the holiday: If the employment ends before the religious holiday, payment depends on the timing and company policies. Always cross-check with Permenaker 6/2016 and local manpower office interpretations.
- Outsourced staff: If you use an outsourcing company, the responsibility to pay THR lies with the provider. Still, ensure your contract and SLA specify this clearly.
- Foreign employees: Even expatriates are entitled, as long as they have a local employment relationship.
- Installment requests: Not allowed. The payment must be made in full.
Why Compliance Matters
THR is more than just a paycheck—it’s a social and cultural obligation in Indonesia. For employees, THR often funds travel, family gatherings, and religious celebrations. For employers, paying on time and correctly builds trust, loyalty, and a good reputation.
Non-compliance, on the other hand, signals disrespect for Indonesian labor laws and traditions. In worst cases, it exposes businesses to sanctions, disputes, and negative publicity.
Employer’s Checklist for THR Compliance
Here’s a quick summary you can use internally:
- Identify eligible employees (PKWTT, PKWT, daily, outsourced, foreign workers).
- Calculate wages correctly (basic salary + fixed allowances).
- Apply pro-rata formula for those with less than 12 months service.
- Set payment schedule—H-7 before employee’s religious holiday.
- Pay in full—installments are prohibited.
- Document everything—payslips, calculations, agreements with outsourcing firms.
- Stay updated—review the Ministry of Manpower’s annual circular and guidance.
Final Thoughts
For employers in Indonesia, THR is non-negotiable. It’s not a matter of generosity but of law, compliance, and respect. Getting it right protects your company from fines, preserves your reputation, and, most importantly, keeps your workforce supported during one of the most important times of the year.
If your organization struggles to manage payroll and compliance across Indonesia’s complex labor landscape, working with an Employer of Record (EOR) service can help. An EOR ensures all obligations—including THR—are handled in line with local regulations, so you can focus on growing your business.
Don’t let THR compliance become a risk for your business. With strict deadlines, detailed calculations, and the possibility of fines or employee complaints, navigating Indonesia’s employment regulations can be overwhelming—especially if you’re managing multiple staff contracts or foreign workers. At CPT Corporate, we specialize in helping companies like yours stay fully compliant with local labor laws. From ensuring accurate THR payments and payroll management to providing full Employer of Record (EOR) services, our team handles the complexities so you can focus on growing your business.
