- 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
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
- 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