As the religious holiday of Idul Fitri approaches, many employees look forward to receiving their Religious Holiday Allowance from their employers. Under Ministry of Manpower Regulation No. 6 of 2016 concerning Religious Holiday Allowance for Workers in Companies (“MoM Reg. 6/2016”), the Religious Holiday Allowance (Tunjangan Hari Raya or “THR”) is a non-wage benefit that employers are required to provide to employees or their families prior to the relevant religious holiday.

Under the regulation, a “Religious Holiday” refers to Idul Fitri for Muslim employees, Christmas for Christian and Catholic employees, Nyepi for Hindu employees, Waisak for Buddhist employees, and Chinese New Year for Confucian employees. THR is generally paid once per year in accordance with the employee’s respective religious holiday and must be paid no later than 7 days before the relevant religious holiday occurs.

A common question arises when an employee resigns shortly before the religious holiday: whether the employee remains entitled to receive THR. Under Government Regulation No. 35 of 2021 concerning Fixed-Term Employment Agreements, Outsourcing, Working Time and Rest Time, and Termination of Employment, employees who voluntarily resign must satisfy certain requirements, including submitting a written resignation at least 30 days prior to the effective resignation date, not being bound by a service bond or other contractual obligation, and continuing to perform their duties until the effective date of resignation. Employees who meet these requirements are entitled to Compensation of Rights Pay (Uang Penggantian Hak) as stipulated under the regulation, as well as any benefits provided under the employment agreement, company regulations, or collective labor agreement.

Importantly, MoM Reg. 6/2016 provides that permanent employees who resign within 30 days prior to the relevant religious holiday are still entitled to receive THR, provided the resignation occurs within the same calendar year as the religious holiday. However, this provision does not apply to employees under fixed-term employment agreements (PKWT) whose employment ends prior to the religious holiday, as such employees are not entitled to THR if their contract terminates before the holiday occurs.

In addition, in circumstances where an employee is transferred to another company with continuous employment, the employee remains entitled to receive THR from the new employer, provided that the previous employer has not already paid the THR.

With respect to the amount payable, employees who have worked for 12 consecutive months or more are entitled to THR equivalent to one month’s salary. Meanwhile, employees who have worked for at least one month but less than 12 months are entitled to THR calculated proportionally based on their length of service. For the purpose of calculating THR, salary generally consists of the employee’s basic salary together with fixed allowances.

If you have further questions regarding employment law or THR compliance in Indonesia, Schinder Law Firm has extensive experience advising companies on employment and corporate matters. Our team regularly assists clients in navigating Indonesian labor regulations and addressing employment-related issues. For further consultation, please contact us at info@schinderlawfirm.com.

Author:
Dewi Susanti