The 0% JHT Tax is Still Being Reviewed. Will JHT Disbursements Really Be Tax-Free?

The disbursement of Old Age Security or Jaminan Hari Tua (JHT) has become a hot topic after the discourse emerged of eliminating JHT tax to 0% for all participants.

Minister of Finance Purbaya Yudhi Sadewa stated that this proposal is still under in-depth study, while questioning the urgency of the change considering that 95.45% of participants already enjoy a 0% rate because the balance is below IDR 50 million.

However, Special Advisor to the President, Said Iqbal, assessed that the data was inaccurate because it repeatedly counted contract workers who had withdrawn their JHT several times, so that participants with balances above IDR 50 million who were subject to tax could be higher than reported.

This article will review the facts surrounding the current JHT tax regulations and the prospects for policy changes.

Key Points

• Currently, the majority of JHT disbursements (95.45%) are tax-free because the balance is below IDR 50 million, in accordance with regulations through PP Number 68 of 2009.

• The proposed 0% JHT tax for all participants is still under review by Finance Minister Purbaya Yudhi Sadewa, who will summon BPJS Ketenagakerjaan for verification.

• Said Iqbal proposed raising the tax-free JHT balance threshold from IDR 50 million to IDR 400 million, and eliminating progressive tax for workers who have been laid off multiple times.

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Current JHT Tax Rules

Source: AI 

Based on Government Regulation Number 68 of 2009 and PMK Number 16 of 2010, JHT disbursement is subject to Final Income Tax Article 21 with the following scheme:

- Balance ≤ Rp. 50 million: 0% rate (tax-free)

- Balance > IDR 50 million: 5% rate for excess balances above IDR 50 million, provided that the disbursement is made within two calendar years of retirement or termination of employment.

The Ministry of Finance noted that of the 1,723,910 JHT claims for the January–May 2026 period, 1,645,469 claims (95.45%) had balances below IDR 50 million, while balances of IDR 50-100 million were only 2.9% and above IDR 100 million were only 1.65%.

For disbursements while still actively working, taxes follow the general Personal Income Tax rate which is progressive (5-30%).

Read Also:Is JHT Taxable? Here's the Latest Tax Deduction Scheme and Rates

Proposals and Challenges

Special Advisor to the President Said Iqbal proposed several changes:

1. JHT tax is 0% for all participants, on the grounds that JHT is a worker's social savings, not an investment.

2. Elimination of progressive tax for workers who have been laid off several times and who repeatedly withdraw JHT.

3. Increase the tax-free balance threshold from IDR 50 million to IDR 400 million, adjusting for inflation.

Finance Minister Purbaya will summon BPJS Employment to verify the data of 95% of tax-free participants.

Director General of Taxes Bimo Wijayanto stated that the DGT is ready to adjust if the balance limit is increased, for example to IDR 100 million.

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Potential and Risks

If 0% JHT tax is approved:

- Participants with large balances will get significant benefits.

- The elimination of progressive tax will ease the burden on workers who have been laid off several times.

Challenges faced:

- Finance Minister Purbaya questioned the urgency because 95% of participants were already tax-free.

- Loss of potential state revenue for large balance cases.

- BPJS data needs to be verified to avoid double counting.

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Conclusion

Until now, the discourse on 0% JHT tax is still in the study stage.

The government will verify BPJS data before deciding whether to change the policy.

For the majority of participants with balances below IDR 50 million, JHT disbursements are tax-free.

However, for participants with larger balances or those who have been laid off multiple times, the policy change could provide significant relief.

Keep an eye on official developments from the Ministry of Finance and BPJS Employment.

Read Also:Purbaya Transforms PNM into an MSME Bank: Profile, History, and Interesting Facts

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FAQ

Are current JHT withdrawals subject to tax?

Yes, but 95.45% of participants don't pay tax because their balance is below Rp 50 million. The remainder (balances > Rp 50 million) are subject to a 5% rate.

What is the 0% JHT tax proposal?

The proposal is for all JHT withdrawals to be tax-free, regardless of the nominal balance.

Who proposed 0% JHT tax?

Special Advisor to the President for Manpower, Said Iqbal.

What was the Minister of Finance's response?

Still reviewing and will summon BPJS to verify the data of 95% of tax-free participants.

Has this proposal been approved?

Not yet. Still in the government's study stage.

What is progressive tax on JHT?

Tiered tax rates (5-30%) imposed on repeated withdrawals due to layoffs.