Since the COVID-19 pandemic, the Indonesian government has issued various tax incentive policies to help maintain public purchasing power and support business continuity. One of the benefits is government-borne income tax (DTP), where the government bears the income tax of the employee so that it does not cut the salary of the employee.
This policy was reintroduced in 2025 through Minister of Finance Regulation (PMK) No. 10 of 2025, which targeted labour-intensive industries such as footwear, textiles and apparel, furniture, leather, and leather products.
The government then extended this policy to 2026 with Minister of Finance Regulation (PMK) No. 105 of 2025, which applies to the entire 2026 tax year, as the need for economic stimulus remains. Although the concept remains, some provisions were amended, such as the list of eligible business sectors and criteria for qualifying employees, which companies should review carefully.
Companies also have to make sure that the PPh 21 calculations on the employee payslips are in line with the latest regulations so that the employees receive the tax benefit as intended. In this article, we will discuss how to set up the required components and tax adjustments in Gadjian.
⚠️ Important information
Automatic PPh 21 DTP calculations in Gadjian are supported for Indonesian employees (WNI) with the following employment statuses:
a. Permanent Employee
b. Probation Employee
c. Fixed-term Contract Employee (PKWT)
d. Freelance Employee
(As per PMK No. 105, Chapter III, Article 4)To enable automatic PPh 21 DTP calculations, administrators must configure the setting in Payroll > Payroll System > Career & Remuneration.
A. Steps to Implement PPh 21 DTP (Government-borne Income Tax)
The automatic DTP calculation feature in Gadjian is effective for payslips generated in 2026 and onwards.
If you have previously applied PPh 21 DTP manually and would like to switch to the automatic calculation method, or if you are implementing DTP for the first time, you can choose one of the following approaches:
Method | Suggested Use Case | Advantages | Limitations | Risk if Previous Payslips Not Finalized |
Edit Existing Career Record | DTP applies to a one employee and career history tracking is not required | Quick and simple | No career change history is maintained | Previous periods may be affected, especially payslips with 'Not Ready' status. |
Add New Career Record (Per Employee) | DTP applies to one employee or a small group and career history should be preserved | Maintains career change history | Must be processed individually | No impact on previous payslips |
Mass Career Update | DTP applies to multiple employees and career history should be preserved | Efficient and maintains history | Requires careful validation of bulk data | No impact on previous payslips |
📝 Important Note
Before making any changes, ensure that payslips from previous periods have been finalised. This helps maintain payroll accuracy and prevents unintended payroll recalculations.
1. Edit Existing Employee Career Record
Make sure you have marked as “Already Paid” any payslips you don't want the change to affect to avoid amounts being changed.
Go to Payroll > Payroll System > Career & Remuneration. Click “View Career” for the employee to be availed of the DTP facility
Click the Pencil icon (Change Career). On the Non-Remuneration tab, select the appropriate Tax Facilities for Personnel (Government-borne Income Tax (DTP)), and then click Save.
The government-borne PPh21 (DTP) component will be automatically shown on the employee’s payslip according to the tax facility chosen. Example:
2. Add a New Career Record
Make sure you have marked as “Already Paid” any payslips you don't want the change to affect to avoid amounts being changed.
Go to Payroll > Payroll System > Career & Remuneration. Click “View Career” for the employee to be availed of the DTP facility
Click + New Career
Click “Career Adjustment” to auto-fill the non-remuneration data with the latest career record.
Type in the preferred Effective Date. Select the appropriate tax facilities for personnel (Government-borne Income Tax (DTP)), and then click Save.
Click on Adjustment Salary Slip to fill the remuneration section automatically. Click on Save.
The employee's career history will be updated with a new career record based on the chosen effective date.
The government-borne PPh21 (DTP) component will be automatically shown on the employee’s payslip according to the tax facility chosen. Example:
3. Mass Career Update
Make sure you have marked as “Already Paid” any payslips you don't want the change to affect to avoid amounts being changed.
Go to Payroll > Payroll System > Career & Remuneration. Click Tools > Kenaikan Karir Massal (Mass Career Update).
Choose which employees will be given the DTP facility. To have the most recent non-remuneration data automatically copied, choose Retrieve Non-Remuneration Data from Previous Careers. To generate non-remuneration data, click Generate Non-Remuneration Data for Selected Personnel.
Fill in the Tax Facilities for Personnel and Effective Date fields. To proceed to remuneration data, click Save & Continue to Remuneration Data.
To have the system automatically copy the most recent compensation data, select "Retrieve Remuneration Data from Previous Careers". To continue, click “Generate Remuneration Data for Selected Personnel".
Click Save & Generate Payslips. Click Continue, generate payslips.
As per the effective date specified, a new career record will be added to the career history of the selected employees.
The government-borne PPh21 (DTP) component will be automatically shown on the employee’s payslip according to the tax facility chosen. Example:
B. Reporting PPh 21 DTP Using Withholding Tax Information from Gadjian
Once the DTP facility has been applied to employee career records and the DTP component appears on payslips, administrators can generate tax reporting data from Payroll > PPh21/26 Tax > Coretax Bupot Data
See related documentation here for more information about setting up tax information and the use of withholding tax data generated by Gadjian.
⚠️ Crucial Details
The employee will not receive a refund for any excess government-borne PPh 21 (DTP) amount in December or upon resignation.
Employees who use the Gross-Up tax calculation method will have their PPh 21 allowance included in their Take-Home Pay (THP) in accordance with Indonesian tax regulations. Example:
If your company wishes to avoid this outcome, employees who use the DTP facility should not use the gross-up tax calculation method.