How to calculate Indonesia's Religious Festival Allowance (THR) | Proportional calculation for employees of less than 1 year
Indonesia THR (Tunjangan Hari Raya) is an allowance paid to employees before major religious festivals, and is an important labor practice that Japanese companies also need to deal with every year.
As you enter the fasting month, you may need to adjust your work hours and break times. Some companies may shorten break times or start work earlier so that employees can go home early.
It is also a time when company events increase, such as creating opportunities to eat meals together to break the fast. On the other hand, because you wake up early in the morning and eat before sunrise, you may notice a noticeable lack of sleep. Safety considerations are also important for manufacturing and logistics companies.
Of particular interest to employees during this time is Religious Festival Allowance (THR). For employees with a period of service of one year or more, the amount to be paid is relatively clear, but for employees with a period of service of less than one year, a proportional calculation is required according to the period of service.
So, how should I calculate THR for employees who have been employed for less than one year?
Is the formula for calculating Indonesian THR specified in detail by law?
The law stipulates that religious festival allowances for employees who have been employed for less than one year shall be paid on a pro-rata basis.
However, detailed methods such as where to set the base date and whether to calculate on a monthly or daily basis are not specified. Therefore, each company must determine its calculation method and make it known to its employees.
Generally, it is desirable to state this in the employment regulations or collective agreement. Even if there is no such provision, it would be a good idea to clarify the rules regarding the payment of religious festival allowances in a letter from the company.
Additionally, according to the law, the payment period for religious festival allowances is one week before the major festival. On the other hand, the government sometimes issues recommendations such as ``please provide payment at least two weeks in advance.''
If this is the case in practice, it would be a good idea for the company to stipulate from the beginning that the payment will be made two weeks in advance.
1Proportional calculation for employees under 10 years of age and the concept of base date
The standard date is generally a major religious holiday.
However, major religious holidays are subject to change at the discretion of the Ministry of Religious Affairs. This is because major religious holidays are determined based on confirmation of the phases of the moon. In addition, holidays established by the government and dates determined by religious beliefs may differ.
In order to avoid panic in the event that a major religious holiday is changed midway through, or if it no longer coincides with a public holiday, it is a good idea for your company to clearly define the standard date, such as ``30 calendar days after the start of fasting''.
Regarding proportional calculation, the general method is to calculate it in ``full months''. On the other hand, some companies believe that it is unreasonable for employees who work 29 days to end up with zero, so they calculate the amount on a daily basis. Either method is fine as long as it is clearly defined by the company.
When calculating on a daily basis, setting the base date becomes even more important because the amount paid changes each day. When calculating on a monthly basis, the range of employees covered by the calculation is relatively stable, making it easier to avoid practical problems.
Whichever method you choose, defining the calculation method in detail and making it known to employees will lead to smooth payment.
Keystone Consulting Group provides practical support for Japanese companies regarding the Religious Festival Allowance (THR), payroll calculation, work regulations, employment contracts, and labor consultation in Indonesia.
Related services:Indonesian labor/human resources support
Related articles:minimum wage in indonesia
Related articles:Setting take-home wages in Indonesia
Related articles:Indonesian personnel evaluation system
