THR (Holiday Allowance) is a mandatory benefit that employers in Indonesia must provide to employees ahead of major religious holidays. However, the amount received may vary, as THR calculation depends on each employee’s length of service.
Want to understand how to calculate THR correctly and in accordance with regulations? Here’s a complete, easy-to-follow guide.
What Is THR?
THR is an additional income paid to employees outside of their regular monthly salary before a religious holiday. It is a statutory right that employers are legally required to fulfill.
THR payments are aligned with the employee’s religious holiday, such as Eid al-Fitr, Christmas, Nyepi, Vesak, or Lunar New Year. In practice, some companies determine the payment schedule based on the holiday most widely celebrated by their workforce.
The obligation to pay THR is regulated under Minister of Manpower Regulation No. 6 of 2016. Companies that fail to comply may face sanctions. Generally, the THR amount equals one month’s salary or is calculated based on the basic salary, depending on company policies and financial conditions.
THR Regulations in Indonesia
The official rules regarding THR are outlined in Minister of Manpower Regulation No. 6 of 2016. This regulation requires companies to pay THR before a religious holiday. Below are the key points you should know:
1. THR Payment Timeline
THR must be paid no later than 7 days before the religious holiday.
For example, if Eid al-Fitr 2026 falls on March 20, THR is expected to be disbursed between March 10–13, 2026. If Eid falls on March 21–22, payments are likely around March 11–15, 2026, depending on the official religious calendar.
While payment dates may vary by company policy, all employers must comply with the government requirement that THR be paid at the latest seven days before Eid al-Fitr.
2. THR Amount
In general:
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Employees who have worked at least one year are entitled to one full month of basic salary as THR.
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Employees with less than one year of service receive THR proportionally.
For example, an employee who has worked for six months will receive half of their monthly basic salary.
3. Employees Eligible for THR
Any employee who has worked for at least one month is entitled to THR. This applies to:
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Permanent employees
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Contract employees
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Daily workers
Specific implementation may follow internal company regulations.
4. Sanctions for Employers
Companies that fail to pay THR in accordance with regulations may face penalties, including fines and legal action. Since THR payment is mandated by labor law, non-compliance can result in serious consequences.
The regulation also covers procedures for delayed payments and rules for employees who are on leave or temporarily inactive. Regardless of internal company changes, THR calculation must follow applicable labor regulations.
THR Calculation Formula
THR calculation varies depending on employment status. Here’s a breakdown of how to calculate THR correctly:
1. How to Calculate THR for Permanent Employees
For permanent employees with at least one year of service:
THR = Basic Salary
If the employee has worked for less than one year:
THR = (Months of Service ÷ 12) × Basic Salary
2. How to Calculate THR for Contract Employees
Contract employees who have worked for at least one month receive THR proportionally:
THR = (Months of Service ÷ 12) × Basic Salary
3. How to Calculate THR for Freelance or Daily Workers
Daily workers are entitled to THR based on total working days within a year. The more days worked, the higher the THR amount.
THR = (Total Working Days ÷ 365) × Monthly Salary
4. How to Calculate THR for New Employees
New employees who have not yet completed one year of service still qualify for THR, calculated proportionally:
THR = (Months of Service ÷ 12) × Basic Salary
5. How to Calculate THR for Employees Who Resigned or Were Laid Off
Employees who resign or are terminated may still receive THR as long as they have worked at least one month in the current year. The amount is calculated proportionally:
THR = (Months of Service ÷ 12) × Basic Salary
6. How to Calculate THR for Employees on Leave
Employees on leave remain entitled to THR, provided they have worked for at least one month prior to payment. Leave status does not eliminate this right.
The calculation method remains the same and is based on the employee’s length of service.
Understanding Your THR Rights
By understanding THR regulations and calculation methods in Indonesia, employees can ensure they receive the correct amount based on their employment status and tenure.
However, managing THR often coincides with other financial needs. If unexpected expenses arise and available funds are insufficient, financing solutions may be necessary.
BFI Finance offers practical financing options with collateral such as motorcycle BPKB, car BPKB, or property certificates (house, shop-house, or office unit). The loan application process is designed to be straightforward and transparent.
With over 40 years of experience and official supervision by Indonesia’s Financial Services Authority (OJK), BFI Finance provides reliable financial services to help you manage your needs with greater peace of mind—because there’s always a way forward with BFI Finance.
By staying informed about THR rules and planning your finances wisely, you can maximize your holiday allowance while maintaining financial stability throughout the festive season.
