THR in Indonesia for Contract Employees: Rules, Rights and Payment

THR in Indonesia, short for Tunjangan Hari Raya or religious holiday allowance, is a mandatory payment, and contract employees are covered. Under Ministry of Manpower Regulation 6 of 2016 (Permenaker 6/2016), an employer must pay THR to any worker with at least one month of continuous service, whether the worker is on a fixed-term contract (PKWT) or a permanent one (PKWTT). This guide explains who qualifies, how much is owed, when it is due, what happens when a contract ends near the holiday, and how foreign employees fit in.

What Is THR (Tunjangan Hari Raya) in Indonesia?

The regulation defines THR as non-wage income that an employer must pay to a worker, or the worker’s family, before a religious holiday (Permenaker 6/2016, Article 1(1)). It is not a discretionary bonus. Because it is not wages, it is also not part of the base used to calculate the wage itself.

Four points shape how it works in practice:

• THR is paid once a year, for the worker’s own religious holiday (Article 5(1)).
• It must be paid in rupiah (Article 6).
• A higher amount set in the employment contract, company regulation, collective agreement or established company practice overrides the statutory minimum (Article 4).
• Employers, in the regulation’s wording, include individuals, partnerships and legal entities, as well as representatives in Indonesia of companies based abroad (Article 1(3)).

For the full calculation walk-through, see our THR calculation guide. For the wider rules, see Indonesia labor law.

Do Contract Employees Get THR?

Yes. Article 2 of Permenaker 6/2016 says THR goes to workers who have an employment relationship with the employer based on a PKWTT or a PKWT. The contract type does not decide eligibility. Continuous service does.

One Month of Continuous Service

A worker qualifies after one month of continuous service (Article 2(1)). If a PKWT is renewed without a gap, the service is continuous and counts together. If you are unsure how your contracts are structured, our guide to employee contract types in Indonesia explains the difference.

The 2026 circular of the Minister of Manpower (SE M/3/HK.04.00/III/2026, dated 2 March 2026) repeats this: THR goes to workers with one month of continuous service or more, on either a PKWT or a PKWTT, and it must be paid in full and may not be paid in instalments.

Which Holiday and Whose Religion

THR follows the worker’s own religion. The regulation lists Eid al-Fitr for Muslim workers, Christmas for Catholic and Protestant workers, Nyepi for Hindu workers, Waisak for Buddhist workers and Chinese New Year (Imlek) for Confucian workers (Article 1(2)). Payment follows each worker’s holiday unless the contract, company regulation or collective agreement says otherwise (Article 5(3)).

This matters for multinational teams. A company with Muslim, Christian and Hindu employees may pay THR at different times of the year.

Explore Our Services Payroll Outsourcing in Indonesia

How THR Is Calculated for Contract Employees

Wage Components That Count

One month of wages for THR is either (Article 3(2)):

• clean wages (wages without allowances), or
• basic wage plus fixed allowances.

Fixed allowances are paid regularly, regardless of attendance. Allowances that vary with attendance, such as meal or transport pay based on days worked, are not fixed. Check which basis your contract uses.

Formula and Examples

Source: Permenaker 6/2016, Article 3.

Example. A contract employee earns IDR 6,000,000 (basic wage plus fixed allowances) and has worked six months before the holiday. THR is 6 : 12 × IDR 6,000,000 = IDR 3,000,000. An employee on the same pay with 12 months or more is owed IDR 6,000,000.

For daily workers (harian lepas), Article 3(3) sets one month’s wage as the average monthly wage over the last 12 months (if they have worked 12 months or more), or over their actual months of service (if less). For tax treatment, see our payroll regulations overview.

When THR Must Be Paid

THR must be paid no later than seven days before the religious holiday (Article 5(4)). For Eid al-Fitr 2026, which the government set for 21 March 2026, that deadline fell on 14 March 2026. For a holiday in a later year, count back seven days from the holiday date set by the government, and note that Eid dates move each year.

Paying earlier is allowed and common. The 2026 circular states that THR must be paid in full and may not be paid in instalments, and it encourages employers to pay earlier than the deadline.

What Happens When a Contract Ends or an Employee Leaves

Fixed-Term Contract (PKWT) Ending Before the Holiday

Under Article 7(3), the 30-day protection rule does not apply to a PKWT worker whose contract ends before the religious holiday. If the contract ends naturally before the holiday, no THR is owed by default. A contract or company policy can grant more.

Two practical risks follow:

• Do not end a contract early to avoid THR. Mutual agreement, contract terms and the reason for early termination all matter.
• If a PKWT runs through the holiday, the worker is entitled to THR, prorated by service.

Permanent Employees (PKWTT) Terminated Near the Holiday

A PKWTT employee whose employment is terminated (PHK) within 30 days before the holiday keeps the right to THR for that year (Article 7(1)). Article 7(2) says this applies to the current year when the employer terminates the employment.

Resignation

The regulation speaks of PHK and, in Article 7(2), termination by the employer. It does not address resignation. If an employee resigns within 30 days of a holiday, check the employment contract, the company regulation and current guidance from the local manpower office before refusing payment. This point needs verification before you rely on it.

A transferred worker whose service continues can claim THR from the new company if the old one has not paid it (Article 8).

Foreign Employees and THR

Permenaker 6/2016 defines a worker as anyone who works for wages or other remuneration (Article 1(4)). It does not exclude foreigners. A foreign employee who works for an Indonesian employer, such as a PT PMA, and who has the required continuous service, should be treated like any other worker on this point. The holiday follows the foreign employee’s own religion, as above.

Check your contract and, for foreigners, how the employment relationship was structured. See our guide to terminating a foreign employee in Indonesia if an exit is near the holiday.

Penalties for Late or Missing THR

Late payment. An employer who pays after the deadline is fined 5% of the total THR owed, counted from the end of the deadline, and must still pay the THR itself (Article 10(1) and (2)). The fine is not paid to the state. It is managed and used for worker welfare as set in the company regulation or collective agreement (Article 10(3)).

Non-payment. THR is also covered by Government Regulation 36 of 2021 on Wages. Article 9 makes THR mandatory and repeats the seven-day deadline, and Article 62 repeats the 5% late fine. An employer who breaches Article 9 faces administrative sanctions under Article 79, applied in stages: a written warning, restrictions on business activity, temporary suspension of some or all production equipment, and finally a freeze on business activity. Labor inspectors apply them after an inspection triggered by a complaint or by supervision (Article 80).

How to Report a THR Violation

• File a report through the Ministry’s THR post, poskothr.kemnaker.go.id,  which the 2026 circular linked to local enforcement posts.
• Contact the provincial or regency manpower office (Disnaker).
• If the dispute is over a right such as THR, the usual order under Law 2 of 2004 is bipartite negotiation, then mediation, then the Industrial Relations Court.

Keep your contract, payslips and written correspondence.

How XPND Helps With THR Compliance

We review contracts, set up payroll calendars for each religious holiday, and handle THR calculations through our payroll management service and HR administration service. Contact us for a free initial consultation before the next holiday.