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Working Hours Regulation outlines the rules governing how long employees can work within a day or week, including overtime limits and mandatory rest periods. In Indonesia, standard working hours are generally 7 hours per day (6-day week) or 8 hours per day (5-day week). These regulations protect employee well-being and promote work-life balance.
Work days refer to the official days employees are expected to work, typically Monday through Friday, depending on company policy or labor regulations. They exclude weekends, public holidays, and approved leave days. Accurate tracking of work days is essential for calculating salaries, attendance, and leave entitlements.
Wage components refer to the individual parts that together form an employee’s overall compensation package. These typically include the basic salary, fixed and variable allowances, overtime, bonuses, and statutory deductions. Understanding wage components helps ensure transparency and compliance in payroll management.
A variable allowance is a component of an employee’s pay that fluctuates based on certain factors such as performance, sales targets, attendance, or company profits. Unlike fixed allowances, it can change from month to month. This type of allowance motivates employees to perform better and aligns rewards with results.
UPMK stands for Uang Penghargaan Masa Kerja, which translates to “Long Service Award” in Indonesia. It is a payment given to employees when their employment ends, recognizing their years of service. The amount is regulated by Indonesian labor law and varies depending on the employee’s tenure and termination type.
UPH stands for Upah Per Jam, meaning “wage per hour” in Indonesia. It represents the hourly rate an employee earns for each hour worked. UPH is commonly used for part-time employees, daily workers, or in calculating overtime pay to ensure fair and accurate compensation.
Time & Attendance Integration is the process of linking attendance tracking tools with payroll or HR systems. It ensures that employee work hours, overtime, and absences are automatically recorded and accurately reflected in payroll. This integration reduces manual errors, saves time, and improves workforce management efficiency.
Termination compensation refers to the financial benefits provided to an employee when their employment ends, either through resignation, layoff, or dismissal. It may include severance pay, accrued leave, bonuses, or other contractual entitlements. This compensation helps support the employee’s transition after leaving the company.
A tax slip is a statement issued by an employer detailing an employee’s income and the tax deducted during a specific period. It serves as proof of tax payment and is required when filing annual tax returns. In Indonesia, examples include forms like SPT Masa 1721 A1 for employees.
Tax Identification Matching is the process of confirming that a taxpayer’s identification number, such as a Tax ID or NPWP in Indonesia, correctly matches their personal or company details in tax authority databases. This verification helps prevent reporting errors, fraud, and compliance issues during tax filing or payroll processing.
Tax brackets are ranges of income levels that determine the percentage of tax applied to a person’s or company’s earnings. As income increases, it may fall into higher tax brackets with higher rates. This progressive system ensures fairer taxation based on the taxpayer’s ability to pay.
Statutory deductions are compulsory withholdings from an employee’s salary as required by law. These may include income tax, social security (like BPJS in Indonesia), and pension contributions. Employers are responsible for deducting and remitting these amounts to the appropriate government agencies.
SPT Masa 1721 A1 is a tax document issued by employers in Indonesia to report an employee’s total annual income and the PPh 21 tax deducted. It serves as proof of income and tax payment for employees when filing their annual tax return (SPT Tahunan). This form ensures accurate and transparent income tax reporting.