Frequently Asked Questions: #pph21

The process for calculating and reporting payroll and PPh 21 (salary tax) for employees in Indonesia involves several steps:

Payroll Calculation:

• Determine the employee's gross salary, including basic salary and any allowances
• Calculate deductions such as BPJS Kesehatan (health insurance) and BPJS Ketenagakerjaan (social security)
• Apply the appropriate PPh 21 tax rate based on the employee's annual taxable income

PPh 21 Calculation:

• Calculate the employee's annual taxable income
• Apply the progressive tax rates:
  • 5% for income up to IDR 50 million
  • 15% for income between IDR 50 million and IDR 250 million
  • 25% for income between IDR 250 million and IDR 500 million
  • 30% for income above IDR 500 million
• Adjust for any applicable deductions or tax allowances

Reporting Process:

• Prepare monthly PPh 21 tax returns (Form 1721)
• Submit the tax return and pay the withheld tax to the tax office by the 10th of the following month
• Provide employees with an annual tax form (Form 1721-A1) detailing their income and tax withheld
• File an annual PPh 21 reconciliation report by March 31st of the following year

Important Considerations:

• Ensure compliance with the latest tax regulations and rates
• Maintain accurate records of all payroll calculations and tax payments
• Use appropriate payroll software to streamline calculations and reduce errors
• Consider seeking professional assistance for complex payroll situations or to ensure full compliance

Okusi Associates offers comprehensive payroll and tax reporting services, including PPh 21 calculations and submissions, as part of their accountancy and tax reporting package for PMA companies in Indonesia.

#payroll   #PPh21   #taxReporting   #incomeTax   #employmentEligibility  

The process for calculating and reporting payroll and PPh 21 (salary tax) for employees in Indonesia typically involves the following steps:

1. Payroll calculation:

• Calculate gross salary and any additional compensation
• Determine deductions (e.g. employee contributions to social security/BPJS)
• Calculate PPh 21 (salary tax) based on the employee's tax bracket
• Calculate net salary

2. PPh 21 calculation:

• Apply the progressive tax rates (5-30%) to the employee's taxable income
• Account for any tax deductions or credits the employee is eligible for

3. Monthly reporting:

• Prepare monthly PPh 21 tax return (SPT Masa PPh 21)
• Submit the tax return to the tax office by the 20th of the following month
• Pay the withheld PPh 21 tax to the government by the 10th of the following month

4. Annual reporting:

• Prepare annual PPh 21 tax return (SPT Tahunan PPh 21)
• Issue Form 1721-A1 to employees as proof of tax withholding
• Submit the annual tax return by the end of April of the following year

5. Documentation:

• Maintain payroll records and tax calculations
• Prepare salary slips for employees

6. Compliance:

• Ensure adherence to Indonesian tax regulations and labor laws
• Stay updated on any regulatory changes affecting payroll and taxation

Okusi Associates offers comprehensive payroll and tax reporting services to handle these processes, including:

• PPh 21 calculation
• Monthly and annual SPT/Tax Return PPh 21 preparation and submission
• Form 1721-A1 preparation
• Salary slip preparation
• Payroll processing for up to 5 employees at no additional cost (fees apply for larger staff)

By outsourcing to Okusi, companies can ensure accurate calculations, timely reporting, and full compliance with Indonesian payroll and tax regulations.

#payroll   #PPh21   #taxReporting   #employmentEligibility   #taxCompliance