For most people, the process of calculating income tax PPH article 21 is a very complicated calculation because there are many factors which add up, subtract and also have quite a long process. The existence of the latest regulations in the form of TER (Average Effective Tariff) is a breath of fresh air because it provides a simpler process for each month, although the process at the end of the year will be the same as before. TER provides a fairly simple calculation by simply multiplying the gross value of income received by the specified TER value.
The PPH article 21 compliance cycle is quite long as follows:
1. Business transactions which include payment of salaries, allowances, bonuses, severance pay and others
2. Calculations which include identifying the use of formulas
3. Periodic SPT reporting and payment according to the time specified in the statutory regulations
4. Financial reports
5. Fiscal reconciliation of profit and loss costs
6. The agency’s annual tax return equalization report
7. SPT for the December tax period which includes main SPT 1721, proof of deduction 1721-A1 and attached fee list
8. Management pays more and
9. Monitoring of cycles
Article 21 income tax rates have four types of calculations, namely:
1. Progressive rates
This rate was previously used for monthly and annual income tax calculations, but since 2024 the use of this rate for monthly calculations has been replaced with the Average Effective Rate (TER) for monthly rate calculations, but for annual calculations this progressive rate will still be used. Calculations using this tariff have a fairly long cycle, starting from calculating gross income, looking for PKP by subtracting gross income minus PTKP and other factors, to calculating layers of taxable income based on predetermined layers.
2. Effective Monthly Rate
The monthly effective rate replaces the progressive rate for monthly calculations. Calculating this rate is quite easy, namely just looking for gross income and multiplying it by the average rate that has been regulated in accordance with Article PP 58 of 2023.
3. Daily Effective Rate
The Daily Effective Rate has the same concept as the monthly effective rate, only this rate is specifically for daily wage earners and only has 2 types of calculations, namely:
*0% rate for income under 450,000 IDR
*0.5% rate for income between 450,000 – 2,500,000 IDR
4. The income recipient does not have a NPWP
This rate applies to income recipients who do not receive income, the calculation using the three methods above is only 20% higher than the actual rate.
Apart from these things, there are quite significant differences in reporting practices currently. If previously every reporting was done on the e-spt application and DJP was the reporting portal, currently e-spt is no longer used. The entire reporting process and reporting portal is focused on DJP online.
Apart from the things above, the Director General of Taxes also has several discourses regarding the income tax flow process, namely the matching of NIK with NPWP and also the release of a new application for tax reporting. The matching of NIK and NPWP is carried out so that all data can be the same as population service data, thereby minimizing data errors. Meanwhile, the application that will be released is still in the development stage. It is hoped that this application will make the tax reporting process easier because in the field there are quite a lot of problems in the tax reporting process.
Article source: created as a resume of the results of the Practical training and strategies for managing the latest income tax article 21: calculation techniques, use of e-bupot 21/26 to correction of SPT
