04
Sep
2019

Understanding BPJS Ketenagakerjaan, BPJS Kesehatan and Article 21 Employee Income Tax

  1. BPJS / Social Security

    Based on the Indonesian Constitution and by virtue of Law No. 24 of
    2011 on Social Security, it is mandatory for employees to be enrolled
    under the two social security systems available in Indonesia, namely
    the Health Social Security (BPJS Kesehatan) & Manpower Social
    Security (BPJS Ketenagakerjaan). The following are the applicable
    rates for the two social security payments and who has to bear the
    costs.

    Health Social Security (BPJS Kesehatan)

    Component EmployerPortion Employee Portion Total
    Health Insurance 4% 1% 5%
    Maximum salary calculated is Rp. 8.000.000  

    Manpower Social Security (BPJS Ketenagakerjaan)

    Component Employer Portion Employee Portion Total
    Work Accident Security (JKK) 0,24% 0,24%
    Old Age Security (JHT) 3,7% 2% 5,7%
    Death Security (JKM) 0,3% 0,3%
    Pension Security (JP) 2% 1% 3%
    Total 6,24% 3% 9,24%

    Employer portion means the costs are borne by employer, and when
    received by employees it will be added to make up for gross salary of
    employees.

  2. Article 21 Employee Income Tax
    To calculate taxes for employees, there are generally two methods:
    (1) Gross Up method (tax is paid by employer), or (2) Net Off (tax is
    withheld by employer, so employees actually pays the tax via
    withholding by employer).

    How does social security relate to tax?

    Social security payment and withholding will become component of
    gross salary and component for deduction of taxable income.
    Therefore it is necessary that social security payments are updated
    and available to calculate employee income tax.

    Component Borne by Employer Borne by Employer
    Component of Gross Salary Deduction of Taxable Income
    Health Insurance Yes No
    Work Accident (JKK) Yes No
    Death (JKM) Yes No
    Old Age (JHT) No Yes
    Pension (JP) No Yes

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