The Religious Holiday Allowance (“THR”) is a Religious Holiday Allowance (hereinafter referred to as the Religious Holiday Allowance) is non-wage income that must be paid by the Employer to the Employee or their family prior to the religious holiday in accordance with Article 1 of the Regulation of the Minister of Manpower No. 6 of 2016 on Religious Holiday Allowance for Workers/Laborers in Companies (“Ministry of Manpower Reg. 6/2016”). As major religious holidays approach, the disbursement of THR remains a highly anticipated aspect for private sector employees in Indonesia. The policies governing THR disbursement continue to be based on government regulations, with several key aspects that both employees and employers need to consider.

According to the Article 5 paragraph 4 of Ministry of Manpower Reg. 6/2016, THR must be paid no later than 7 (seven) days before the respective religious holiday. This obligation applies universally to all companies without exception, regardless of their size. As regulated in the Article 3 paragraph 1 of the same regulation above, THR is granted to employees who have worked continuously for at least one month, with the amount calculated based on their length of service. Employees who have worked for one year or more are entitled to THR equivalent to one month’s salary, while those who have worked for less than one year will receive a prorated amount.

Beyond its legal implications, THR disbursement also plays a significant role in driving economic activity. With increased consumer spending ahead of religious celebrations, the timely distribution of THR is expected to have a positive impact on various sectors, particularly retail, food, and tourism. Therefore, timely compliance with THR payment obligations not only affects employee welfare but also contributes to overall economic growth.

For private sector employees, understanding their THR rights is essential to ensuring that their employer fulfills this obligation in accordance with applicable regulations. Meanwhile, for business owners, adherence to THR payment regulations is not only a legal duty but also a reflection of their commitment to employee welfare and fosters a harmonious workplace relationship. By ensuring certainty in THR disbursement, employers can contribute to a stable and productive workforce in 2026.

If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of the leading corporate law firms in Indonesia, with extensive experience handling similar matters. Our team of professional corporate and civil lawyers makes us one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.

Author:
Schinder Team