Effective January 1, 2023, the calculation of PPh 21 for permanent employee taxpayers follows two methods:
- Effective Average Rate (TER) Calculation for tax periods other than the final tax period.
- Article 17 Calculation for the final tax period, such as the December tax period or when an employee resigns.
During income calculations—whether monthly or annual totals—decimal figures often appear. This can result from various factors, such as prorated salaries for new or resigning employees, overtime payments, or other incentives.
Legal Basis for Rounding Taxable Income
Regarding PPh 21 Article 17 calculations, Law No. 36 of 2008, Article 17, Paragraph 4 states that Taxable Income (PKP) must be rounded down to the nearest thousand rupiahs.
Additionally, SE-22/PJ.24/1990 on Rupiah Figures in Tax Documents mandates that figures in tax documents—including tax payable, tax credits, interest, and penalties—must be rounded down to the nearest full rupiah.
Rounding Differences in e-Bupot and CoreTax
Since January 1, 2024, the Directorate General of Taxes (DJP) has required tax reporting via the DJP Online e-Bupot system. As of January 2025, CoreTax has officially gone live. However, there are differences in rounding methods between these two systems, particularly in the monthly PPh 21 tax payable calculation using the TER method:
- e-Bupot: Rounds down to the nearest full rupiah.
- CoreTax: Applies normal rounding, where:
- If the decimal is less than 5, it is discarded and replaced with zero.
- If the decimal is 5 or greater, the nearest whole number is rounded up.
While these rounding differences typically result in minor discrepancies, they can still cause confusion for HR and Payroll teams when preparing reports for Finance & Accounting. If the rounding method does not match, HR or Payroll must manually adjust the figures to align with CoreTax results.
Seamless Solution with Pro-Int HRIS
As a leading HRIS provider, Pro-Int HRIS offers flexible configurations, including customizable PPh 21 rounding methods. With this feature, companies can easily adjust rounding preferences without manual corrections, ensuring accurate and efficient tax calculations.
So, what are you waiting for? Contact us now for an automated tax calculation process that eliminates manual adjustments and always complies with the latest government regulations!
