PPh 21 DTP Must Be Paid Cash to Employees, Not by Companies

JAKARTA, October 30, 2025 – The Ministry of Finance Regulation (PMK) No. 72/2025 states that PPh Article 21 not withheld because of the Government-Funded Facility (DTP) must be paid in cash to employees in the manufacturing and tourism sectors.

The DTP incentive applies to permanent staff whose gross income does not exceed IDR 10 million per year, and to non‑permanent staff with a daily wage up to IDR 500 thousand or a monthly wage not exceeding IDR 10 million. Even when the employer provides a PPh 21 allowance or bears the tax, the amount must still be paid directly to the employee and is not treated as taxable income.

This arrangement keeps the tax burden on the government while employees receive the net amount without additional tax. Employers must ensure that each employee’s National Identification Number (NIK) is linked to the Directorate General of Taxes (DJP) system to qualify for the DTP facility.