Tunjangan Hari Raya (THR) in Indonesia is also commonly referred to as the “13th month bonus”.
It often causes confusion for foreigners when they first encounter it, as THR is unique to the Indonesian archipelago.
However, it is a fundamental part of local compensation packages and holds significant importance in Indonesian society.
THR translates to “Holiday Allowance”.
It’s a guaranteed 13th month salary allowance, paid before an employees main religious holiday.
THR is mandatory under Indonesian law.
What are the THR Rules in 2026?
Tunjangan Hari Raya is currently governed by the Minister of Manpower Regulation No. 6 of 2016 – Religious Festivity Allowance for Employees in Companies (“Regulation 6”).
Regulation 6 replaced the previous Regulation No. PER-04/MEN/1994.
As per Indonesian law, companies must pay the THR allowance to an employee 1x per year, at least 1 week before the persons most important religious event.
Indonesia recognises 6 official religions.
Depending on the persons religion, payment of THR would be at least 7 days before:
- Idul Fitri for Muslims
- Christmas for Protestants and Catholics
- Nyepi for Hindus
- Vesak for Buddhists
- Chinese New Year for Confucians
However, the practice of many businesses has been to pay THR to Muslim employees before the Idul Fitri holiday and to non-Muslim employees prior to Christmas.
THR Payment Calculation
The THR payment is equivalent to 1x monthly salary and fixed cash allowances.
It is payable in full to any employee that has worked for a company for at least 12 months prior to the payment date.
However, for employees with a service period of less than 1 year — but more than 1 month — the allowance is calculated proportionally.
For instance if 6 months have been worked, THR payment = 1 month salary and fixed allowances / 12 * 6
If 3 months have been worked, THR payment = 1 month salary and fixed allowances / 12 * 3
THR is Not due to anyone that has worked for a business for less than 1 month.
A Practical Example of a THR Allowance Calculation:
An individual receives a Gross Salary of IDR 100,000,000 per month plus fixed monthly cash allowances of IDR 15,000,000 Gross per month.
Total fixed monthly income (wage) = IDR 115,000,000 Gross
They have worked for their employer for 7 months prior to THR payment.
Their THR Allowance would equal = IDR 115,000,000 / 12 which is IDR 9,583,333 X 7 months worked
Total THR Payment = IDR 67,083,333
THR for Freelancers
Freelance workers are also entitled to THR.
Freelancers working for more than 12 continuous months receive one month’s salary – calculated based on the average salary that they have received throughout the period.
For Freelancers that have worked less than 1 year but more than 1 month, the allowance is again calculated proportionally based on the average monthly salary throughout the period worked.
Other Items to be Aware Of
Above all, THR is compulsory and an employee’s work performance has no impact on payment.
Alongside this, THR must be paid in the form of Indonesian Rupiah.
In addition, Employers who are late in paying are subject to a 5% fine.
Employers who do not provide THR are subject to administrative sanctions under the prevailing laws and regulations.
Summary
The above covers the key THR regulations.
Whilst most companies apply THR as per government regulations, firms are entitled to pay larger THR allowances as part of their overall employee compensation and reward schemes.
As a well-established headhunting company in Indonesia, ProCapita often works for businesses that reward executive-level employees with THR allowances equal to 2x or even 3x monthly income.
It all depends on the remuneration policies of a company.
Why Indonesia has a 13th Month Religious Holiday Allowance
Indonesia is considered a collectivist society, meaning higher importance is placed on the group rather than the individual.
Local communities are bound together by religion, community events and communal gatherings.
People celebrate big religious festivals together, as a community.
Major religious events are a time of great celebration and a focal point of the annual calendar.
However, the major ceremonies are also very costly.
People often have to travel across the archipelago to go back to their home town.
They need to buy a lot of food, new clothes and gifts.
In conclusion, THR ensures that Indonesian workers have financial support at the time of year when it is needed most.
The 13th month THR allowance pays for the large communal celebrations and group worship. It allows society to gather together.
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