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The Regulation PMK 10/2025 Is Effective, Identifying Which Employees Earning Below Rp 10 Million Are Eligible For PPh Incentives
Tuesday, 11 Feb 2025
The government has exempted income tax (PPh) for workers in specific sectors. This policy is outlined in the Minister of Finance Regulation (PMK) Number 10 of 2025, which was officially issued and took effect on February 4, 2025. According to this regulation, the government will cover the PPh Article 21 from January to December 2025. PPh Article 21 pertains to taxes on income such as salaries, wages, honoraria, allowances, and other payments in any form related to the work, services, and activities performed by individuals classified as Domestic Tax Subjects. This tax incentive is part of an economic stimulus aimed at maintaining public purchasing power and ensuring national economic stability. Consequently, which groups of workers are eligible for the PPh 21 incentive?
The exemption from PPh 21 applies to workers in labor-intensive sectors, specifically industries that require a significant workforce to produce goods or services.
According to Article 3, the labor-intensive sectors include:
- Footwear industry
- Textile and garment industry
- Furniture industry
- Leather and leather goods industry.
Workers in the labor-intensive sector who qualify for PPh 21 incentives are categorized into two groups: permanent employees and non-permanent employees. The criteria for permanent employees eligible for incentives are outlined in Article 4, which specifies several conditions:
- Possession of a Tax Identification Number (NPWP) or an Integrated Population Identification Number (NIK) linked to the Directorate General of Taxes (DJP) administrative system
- Receiving a fixed and regular gross income not exceeding Rp 10 million
- Not receiving any other government-subsidized PPh 21 incentives as stipulated by tax regulations.
For non-permanent employees, eligibility for incentives is determined by the requirements set forth in Article 5.
Possessing a Tax Identification Number (NPWP) or an Integrated Population Identification Number (NIK) that is connected to the administrative system of the Directorate General of Taxes (DJP)
Receiving an average daily wage not exceeding Rp 500,000 in cases where the payment is made on a daily, weekly, unit, or contract basis
Earning a monthly wage that does not exceed Rp 10 million in instances where the payment is received or obtained on a monthly basis
Not receiving any other government-subsidized income tax incentives under the relevant tax legislation.
This provides information regarding workers exempt from PPh 21 tax for the period of January to December 2025.
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