Indonesia Income Tax – Summary Of The Rates & Rules [2025]

ProCapita Headhunter Indonesia frequently works for companies that are looking to enter the Indonesian market and make their first local hire.

One of the most common questions we receive is about Indonesia’s personal income tax rates & rules.

To make things easy, we’ve summarized the essential points below.

In short, Indonesia operates a progressive personal income tax system — the more someone earns, the higher the income tax rate that applies.

Table of Contents

Who Needs to Pay Income Tax in Indonesia?

In Indonesia, anyone who meets any of the following three criteria is considered a tax resident and is subject to Indonesian personal income tax:

The individual lives in Indonesia;
_
The individual is in Indonesia for more than 183 days within the 12-month tax year;
_
The individual is present in Indonesia during a fiscal year with the intention to reside in the country.

Personal Income Tax Rates in Indonesia [2025]

Nearly all elements of income earned by an individual in Indonesia are subject to personal income tax.

The following Progressive Tax Rates are charged to taxable annual income:

Taxable Income (IDR)	Tax Rate	Tax Amount (IDR)
Up to IDR 60 million	5 %	Max IDR 3 million
Above IDR 60 million and up to IDR 250 million	15 %	Max IDR 28.5 million
Above IDR 250 million and up to IDR 500 million	25 %	Max IDR 62.5 million
Above IDR 500 million and up to IDR 5 billion	30 %	Max IDR 1.35 billion
Above IDR 5 billion	35%	35% of the taxable amount

Meanwhile, non-resident individuals are subject to a 20 % withholding tax on Indonesia-sourced income.

Personal Income Tax Deductions in Indonesia

As of 2025 a person is Not taxed on their first IDR 54,000,000 of income earnt.

Also a husband benefits from an additional IDR 4,500,000 deduction.

And there is a further IDR 4,500,000 deduction per dependent child (up to 3 children).

Income Tax Payment Process in Indonesia

Companies withhold personal income tax that is due from an employees salary / earnings each month.

They then transfer the income tax payment directly to the Indonesian tax department.

Employee income tax in Indonesia must be remitted by the employer to the government on a monthly basis, by the 15th of the following month.

So, for example, employee income tax due for February must be paid by the 15th of March.

Annual Personal Income Tax Return in Indonesia

Indonesian tax residents are required to file an Annual Tax Return when their total income exceeds IDR 54,000,000.

(Or IDR 72,000,000 for a married man with three children/dependents.)

The obligation to complete and submit the annual tax return sits with the individual.

The financial year / tax year in Indonesia is from the 1st of January until the 31st of December.

The annual personal tax return should be filed on or before the 31st of March each year, in regards to the earnings that were made in the previous financial year.

Therefore, for the 2025 financial year, the personal tax return must be lodged on or before 31st March 2026.

When filing the personal tax report, if there is any outstanding tax that is due to be paid, the payment must be made before the tax return is lodged.

The penalty for late filing of the annual tax return is IDR 100,000. Also, late payment of tax is subject to an administrative penalty of 2 percent per month, calculated from the payment due date.

About ProCapita: Indonesia’s Premier Executive Search Firm

ProCapita Headhunter Indonesia is a Jakarta-based executive search firm specializing in identifying and securing top-tier leadership talent for critical executive roles across industries and functions.

Since 2014, our senior consultants have successfully completed over 1,000 executive placements, for positions located throughout Indonesia.

We focus on sourcing passive, elite senior candidates, using a highly personalized, direct approach, that combines deep local market insight, traditional executive search expertise, and a market-leading network of 450,000+ professionals.

ProCapita rapidly connects client companies to the right executive talent.

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