Withholding Tax Indonesia 2026: Complete PPh Guide
Indonesia uses an extensive withholding tax system. As a business, you're often required to withhold and remit taxes on various payments.
Withholding Tax Overview
Types of Withholding Tax
Main PPh withholding categories
| Feature | PPh 21 Employment income | PPh 23 Services & royalties | PPh 26 Foreign payments | PPh 4(2) Final taxes |
|---|---|---|---|---|
| On | Salaries, wages, fees | Services, dividends, interest | Payments to non-residents | Rent, construction, etc. |
| Rate | Progressive 5-35% | 2-15% | 20% (or treaty rate) | Various (final) |
| Remit | Monthly | Monthly | Monthly | Monthly |
| Deadline | 10th of following month | 10th of following month | 10th of following month | 10th of following month |
PPh 21: Employment Tax
What is PPh 21?
PPh 21 is the income tax withheld from employee compensation:
- Salaries and wages
- Bonuses and allowances
- Severance payments
- Director fees
- Consultant fees (individuals)
The employer withholds and remits to the tax office.
PPh 21 Rates (Progressive)
| Taxable Income (IDR/year) | Rate |
|---|---|
| 0 - 60 million | 5% |
| 60M - 250 million | 15% |
| 250M - 500 million | 25% |
| 500M - 5 billion | 30% |
| Over 5 billion | 35% |
PPh 21 Calculator
PPh 21 Monthly Estimate
Estimate monthly employee withholding
Default Inputs
- Monthly Gross Salary (IDR)
- 25,000,000 IDR
- Marital Status
- Single, no dependents (TK/0)
Estimated Result
Estimated total
Approximate calculation
Rp 2.500.000
PPh 23: Service & Royalty Tax
PPh 23 Rates
| Payment Type | Rate |
|---|---|
| Dividends | 15% |
| Interest | 15% |
| Royalties | 15% |
| Technical services | 2% |
| Management services | 2% |
| Consultant services | 2% |
| Other services | 2% |
When to Withhold PPh 23
PPh 23 Applies To
Common payments requiring PPh 23
services
passive
PPh 26: Non-Resident Tax
What is PPh 26?
PPh 26 applies to payments made to non-residents (foreign persons or entities):
- Standard rate: 20%
- May be reduced by tax treaty
- Applies to: services, dividends, interest, royalties
- Withheld by Indonesian payer
Common Treaty Rates
| Country | Services | Dividends | Interest | Royalties |
|---|---|---|---|---|
| Singapore | 15% | 10/15% | 10% | 15% |
| USA | 15% | 10/15% | 10% | 10% |
| UK | 15% | 10/15% | 10% | 15% |
| Australia | 15% | 15% | 10% | 15% |
| Japan | 15% | 10/15% | 10% | 10% |
| No treaty | 20% | 20% | 20% | 20% |
Certificate of Domicile (SKD)
To apply treaty rates, the foreign recipient must provide:
- Form DGT-1 (Certificate of Domicile)
- Completed by recipient
- Certified by tax authority
- Valid for 12 months
PPh 4(2): Final Taxes
Final Tax Rates
| Transaction | Rate | Notes |
|---|---|---|
| Land/building rent | 10% | Final |
| Construction services | 2-4% | Based on certification |
| Land/building sale | 2.5% | Final |
| Dividends to individuals | 10% | Final |
| Bank interest | 20% | Final |
| Lottery prizes | 25% | Final |
Construction Services Detail
| Contractor Type | Rate |
|---|---|
| Large certification | 2% |
| Medium certification | 3% |
| Small/no certification | 4% |
Filing and Payment
Monthly Obligations
Withholding Tax Deadlines
Monthly compliance calendar
| Feature | PPh 21 | PPh 23 | PPh 26 | PPh 4(2) |
|---|---|---|---|---|
| Payment | 10th of following month | 10th of following month | 10th of following month | 10th of following month |
| Reporting | 20th of following month | 20th of following month | 20th of following month | 20th of following month |
| Form | SPT Masa PPh 21 | SPT Masa PPh 23/26 | SPT Masa PPh 23/26 | SPT Masa PPh 4(2) |
Withholding Certificates
Providing to Recipients
When you withhold tax, you must provide a Bukti Potong (withholding certificate):
| Tax Type | Certificate |
|---|---|
| PPh 21 | Bukti Potong 1721-A1/A2 |
| PPh 23 | Bukti Potong PPh 23 |
| PPh 26 | Bukti Potong PPh 26 |
| PPh 4(2) | Bukti Potong PPh 4(2) |
Recipients use these to:
- Claim tax credits
- File their own tax returns
- Support expense deductions
Common Mistakes
| Mistake | Impact |
|---|---|
| Missing withholding | Late payment penalties + interest |
| Wrong rate applied | Under/overpayment |
| Not providing certificates | Problems for recipients |
| Missing treaty formalities | 20% rate applies instead of treaty |
| Incorrect NPWP | Certificate issues |
Penalties
| Violation | Penalty |
|---|---|
| Late payment | 2% per month |
| Late filing | IDR 100K-1M per return |
| Not withholding | Tax + 100% penalty |
| Late issuing certificate | Administrative penalty |
Common Questions
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