Summary
The Indonesian government has rolled out a fresh fiscal stimulus through the Article 21 Income Tax Borne by Government (PPh 21 DTP) facility for 2026. The legal basis is Minister of Finance Regulation No. 105 of 2025 (PMK 105/2025), enacted on 31 December 2025 and effective for the entire 2026 fiscal year. This guide explains who qualifies, how much the incentive is worth, and how employers deliver it.
What PPh 21 DTP Is
PPh 21 DTP is a scheme where the Article 21 income tax that would normally be withheld from an employee's salary is paid by the government through the tax subsidy budget line. The employee receives the tax amount as additional cash. This differs from a private tax allowance because the funding source is the state budget.
PMK 105/2025 uses PPh 21 DTP as a tool to support workers in labor-intensive industries that are sensitive to weak global demand. The scheme complements VAT DTP and corporate income tax incentives for specific sectors.
Legal Basis
The legal framework is layered. The Income Tax Law, as amended by Law No. 7 of 2021 (Tax Harmonization Law), Article 21 governs withholding on employment income. PMK 105/2025 Article 2 and Article 3 set out the criteria for eligible employers and employees. Annex A of PMK 105/2025 lists 133 Business Classification Codes (KLU) that fall within the facility's scope.
The Director General of Taxes Regulations on PPh 21 DTP administration in the Coretax era serve as the technical reference for reporting formats and tax object codes.
Eligible Sectors
PMK 105/2025 targets five industry groups. First, footwear. Second, textiles and ready-made clothing. Third, furniture. Fourth, leather and leather goods. Fifth, tourism, including starred hotels, restaurants, and travel services. Details are listed across 133 KLU in Annex A.
Employers wanting to confirm eligibility can match the KLU on their PKP confirmation letter or Coretax profile against Annex A.
Employee Criteria
PMK 105/2025 sets two employee categories. Permanent employees qualify if their monthly salary as of January 2026 or the first month of employment is no more than IDR 10,000,000. Non-permanent employees qualify if daily wages are no more than IDR 500,000 or monthly wages no more than IDR 10,000,000.
The salary criterion is a snapshot at January 2026. If an employee gets a raise above IDR 10 million during the year, the entitlement remains as long as the starting salary met the threshold. DJP confirmed this point in its PMK 105/2025 outreach materials.
Incentive Amount and Caps
The PPh 21 DTP value received by employees ranges from IDR 60,000 to IDR 600,000 per month, depending on salary structure and PTKP status. The calculation uses the Effective Average Rate (TER) for PPh 21 under PMK 168/2023, then the withheld amount is paid by the government and added to take-home pay.
The facility runs for 12 months, from January 2026 through December 2026. The government estimates around 2.22 million workers will benefit.
How Employers Deliver PPh 21 DTP
The practical steps are as follows. First, calculate the PPh 21 payable each tax period using TER as usual. Second, instead of withholding it from the employee's salary, pay the tax amount as cash alongside the monthly payroll. Third, issue a PPh 21 withholding slip with the DTP tax object code set by DJP.
Fourth, file the PPh 21 monthly tax return through Coretax each month. The PPh 21 DTP report must be filed no later than the 20th of the following month. If the employer is late, the DTP facility for that period can be forfeited and the tax becomes the employer's liability.
How Employees Verify Their Entitlement
Employees can check three things. First, the company's KLU appears in Annex A of PMK 105/2025. Second, the basic monthly salary on the January 2026 payslip does not exceed IDR 10 million. Third, the payslip shows an additional PPh 21 DTP component, usually labeled "PPh 21 Ditanggung Pemerintah" or similar.
If in doubt, employees can ask HR or payroll for clarification. The PPh 21 withholding slip is also visible in the employee's Coretax account once the company files.
Worked Example
Ms. A works as a production operator at a textile factory with a basic salary of IDR 6,500,000 per month, status TK/0. The TK/0 PTKP is IDR 54,000,000 per year. Monthly taxable income with TER category A on a salary of IDR 6.5 million produces PPh 21 of about IDR 97,500 per month.
Under PMK 105/2025, that IDR 97,500 is not withheld. Ms. A receives full take-home pay plus IDR 97,500 as PPh 21 DTP. The employer still records the figure as government-borne PPh payable and reports it on the monthly tax return.