THR, which stands for Tunjangan Hari Raya or Religious Holiday Allowance, is a mandatory bonus that Indonesian employers must pay to employees before their religious holidays. For most employees, this coincides with Eid al-Fitr (Idul Fitri), but the allowance applies to all religions celebrated in Indonesia, including Christian holidays, Hindu holidays, and others.
How Much Is THR?
Employees who have worked for 12 continuous months or more receive THR equal to one month's salary. Those who have worked between 1 and 12 months receive a prorated amount calculated as: (months worked / 12) x monthly salary. The calculation is based on the basic salary plus any fixed allowances the employee regularly receives.
Payment Timing
THR must be paid at least 7 days before the religious holiday. For employees celebrating Eid al-Fitr, this typically means payment in late March or early April, depending on the Islamic calendar. Employers cannot delay payment or pay in installments. Late payment results in penalties of 5% of the total THR amount for the first day, plus additional penalties for continued delays.
Who Is Entitled to THR?
- Permanent employees (PKWTT contract holders)
- Fixed-term employees (PKWT contract holders)
- Employees who have worked at least one month
- Employees who have resigned or been terminated within 30 days of the holiday
Compliance Considerations
THR is not optional. It is mandated by Indonesian labor law and strictly enforced. The Ministry of Manpower actively monitors compliance, and employees can file complaints if they do not receive THR. For foreign companies hiring in Indonesia through an EOR, the EOR typically handles THR calculations and payments as part of their employment service, ensuring full compliance with local requirements.