As Eid Al-Fitr Day comes nearer, most of the Indonesian working population awaits anxiously to receive their religious-holiday allowance (tunjangan hari rayaor commonly known as THR) and soon to embark on their collective homecoming tradition.

Through issuing Circular No. 2 of 2018 on the payment of Religious Holiday Allowance of 2018 on May 8, 2018, the Government reminded every employer of their legal obligation to provide their employees with their THR.[1]

Who is entitled to receive THR?

THR must be paid to:

• the employees that hired on a permanent basis and those hired on a temporary basis, includes freelance employees;
• the employees that have been worked for at least 1 month’s services;
• the permanent employees whose employment is terminated within 30 days prior to the relevant religious holiday; and
• the employees who are being transferred to another company with a continuing service period, who have not yet received THR from the former employer.

How much?

The amount of THR will vary according to the employee's length of service. For the details please click here. The employees may receive a higher THR than the statutory minimum if there is a specific provision regarding this in the relevant employment agreement, company regulation or collective labour agreement, or if the company has a customary practice regarding the determination of the THR amount.

The employees may receive a higher THR than the statutory minimum if there is a specific provision regarding this in the relevant employment agreement, company regulation or collective labour agreement, or if the company has a customary practice regarding the determination of the THR amount.

When?

THR shall be paid in cash and in Indonesian Rupiah once in a year, at least 7 days before the relevant religious holiday of the employee or on a specifically agreed religious holiday.

Sanction

The employer who is late to make payment will be liable not only for a fine of 5% of the outstanding THR but also an administrative sanction. It is noteworthy, that the payment of the said fine does not annul the obligation of the employer in question to pay THR to employees.

[1]Minister of Employment Regulation No. 6 of 2016 regarding Religious- Holiday Allowance for Employees (http://www.hukumonline.com/pusatdata/detail/lt56ebc838dd535/node/157/peraturan-menteri-ketenagakerjaan-no-6-tahun-2016-tunjangan-hari-raya-keagamaan-bagi-pekerja_buruh-di-perusahaan)