Find out all you need to know about employee’s income tax in Indonesia here.
How to calculate income tax
In Indonesia, there are three main methods to calculate income tax:
- Gross Method – calculated based on the employee’s total taxable income, and the employee is responsible for paying the taxes.
- Gross Up Method – calculated based on the employee’s net salary, and the employer is responsible for paying the taxes.
- Net Method – calculated based on the employee’s net salary, and the employer is responsible for paying the taxes.
Who is responsible of submitting employee’s income tax to the tax authority?
By default, the employer is responsible for deducting the appropriate amount of income tax from the employee’s salary and submitting their monthly tax filing to the Directorate General of Taxes.