Hello, I am Ahmad, an employee who has only been working for a few months. Every month, I notice there is a deduction for Article 21 Income Tax (PPh 21) on my payslip. I am still confused—what exactly is PPh 21? Why is my salary being deducted? And is all income subject to tax deductions? I would appreciate your explanation. Thank you.
Hello, thanks for your question. Having taxes deducted from your salary is a normal part of being an employee and is required if your income is above a certain limit. Let's go through this one by one.
Income Tax (PPh) Article 21 is a tax imposed on income from salaries, wages, honorariums, allowances, and other payments received by employees, non-employees, former employees, or participants in an activity. In short, PPh 21 is the tax that is deducted from your income for work or services rendered.
Your salary is deducted for PPh 21 because the government requires every taxpayer with income above the Non-Taxable Income (PTKP) threshold to pay taxes. The PTKP is the minimum income limit that is not subject to tax.
For example, for 2024, the PTKP for a single taxpayer is IDR 54,000,000 per year or IDR 4,500,000 per month. If your monthly income exceeds that amount, the difference will be calculated and taxed according to the applicable rates. This is a form of mutual cooperation among citizens to fund national development.
Not all income is subject to tax. Only income that exceeds the PTKP limit is taxed. Additionally, there are several types of income that are excluded from being a tax object, such as:
Aid or donations.
Inherited property.
Scholarships.
Pension contributions paid to a pension fund approved by the Minister of Finance.
To ensure your income has been calculated correctly, you can check the details on your payslip. Companies usually list the components of your income and deductions, including PPh 21.
If you have more questions about PPh 21 calculations, you can contact the finance or HR department at your company.
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