The Cabinet Order, which is the implementation provision of the Omnibus Law, has been enacted, and unemployment security has been newly added in the field of Labor and Social Security Implementing Institutions (hereinafter referred to as Labor BPJS). As a result, there has been a change in the calculation of insurance premiums. Today we'll take a look at this change, which affects both company expenses and income tax calculations.

Labor BPJS has previously consisted of four programs: workers' compensation insurance, death insurance, old age security, and pension security, but unemployment insurance was added by Law No. 11 of 2020 (commonly known as the Omnibus Law), and the details of unemployment insurance were stipulated by Cabinet Order No. 37 of 2021. The most important points to focus on are the coverage and insurance premiums, but this time we will take a look at changes in insurance premiums.

[The amount of insurance premiums paid was reduced by the omnibus law]

When the government announced that it would add unemployment insurance, some people said, ``Unemployment insurance is necessary, but it would be troubling if insurance premiums, which are still a huge burden on companies, would increase.'' At that time, the government repeatedly announced that ``insurance premiums will not be raised,'' and the details of what was actually announced are as follows. (Set as a percentage of wages)

If you look only at the rate value, workers' compensation insurance is 0.14%Since the death benefit has been reduced by 0.1%, a total of 0.24% is the company's share of the unemployment benefit, so it appears that the total amount has not changed. However, since the wage ceiling Pembatasan Upah is set for unemployment insurance, all people whose wages are above the upper limit will have their insurance premiums calculated based on the upper limit, so the actual amount paid will be less than the reduction in workers' compensation insurance and death benefit, which are calculated based on the wage amount.

[Unemployment security payment start date]

The ordinance has been in effect since February 2, 2021, so it should apply to payments made in March 2021 at the latest, but it seems that no changes have been made to the system even after half a year has passed since its enforcement. This is a problem only related to the company's share, and I think it will be offset later, but it is important to properly manage your records and make sure that the overpayment is handled correctly.

Related legislation: Decree No. 37 of 2021 PP-37/2021