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Companies Shall Provide the THR No Later Than Seven Days Before Eid Al-Fitr 2023

The Religious Holiday Allowance or Tunjangan Hari Raya (THR) is a mandatory bonus payment for employees in Indonesia before religious holidays, such as Eid al-Fitr or Christmas. The payment is intended to help employees celebrate the holidays and cover their expenses during the festive season.

In Indonesia, the THR regulation is governed by the Ministry of Manpower, and the bonus amount is determined by several factors, including the employee's length of service, salary, and company profits. Employers must pay the THR to their employees seven days before the holiday.

Regarding the implementation of THR distribution, it has been regulated in the Circular Letter (Surat Edaran) of the Minister of Manpower No. M/2/HK.04.00/III/2023 dated 27 March 2023 concerning the Implementation of Religious THR Distribution for Workers in Companies in 2023.

Ida Fauziah, the Minister of Manpower, explained that the THR will be given to workers who have been employed for one month or more. The THR will also be given to workers with an employment relationship with employers based on an unspecified period of employment agreement (Perjanjian Kerja Waktu Tidak Tertentu or PKWTT) and a specified period of employment agreement (Perjanjian Kerja Waktu Tertentu or PKWT).

The Minister of Manpower requests private companies to provide the THR no later than seven days before Eid al-Fitr 2023, which means that the THR disbursement for private employees is expected to occur no later than 14-15 April 2023. Articles 8 and Articles 9 of the Government Regulation No. 36 of 2021 concerning Wages have explicitly stated this requirement. However, the Minister hopes companies can pay the THR earlier than the stipulated date.

Furthermore, employers who fail to pay the THR can face fines and imprisonment. Additionally, employees who do not receive their THR can file complaints with the Ministry of Manpower or pursue legal action to recover the payment. The imposition of sanctions related to THR violations is also regulated in the Government Regulation No. 36 of 2021 concerning Wages, such as a written warning; a restriction of business activities; a temporary or complete cessation of production equipment; and the freezing of business activities.

If you need consultation concerning THR or labor issues, Schinder Law Firm is one of many corporate law firms in Indonesia. Our professional civil lawyers strive to understand your unique needs and concerns; we will develop creative, cost-effective ways to assist you. Contact us at info@schinderlawfirm.com today to schedule a confidential consultation to discuss your situation and how we can help.

Author: Dewi Susanti

Schinder Consultant London Ltd.


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