As Ramadan and Eid approach, one of the most anticipated benefits for employees is the Holiday Allowance (THR). In addition to helping cover expenses during the holy month, THR is often used for various needs such as traveling home (mudik), sharing with family, or saving.
However, many people are still confused about how to calculate THR. Do all employees receive the same amount? How do you calculate THR if you haven’t worked for a full year? And what exactly is prorated THR?
To help you avoid miscalculations, here’s a complete explanation.
What Is THR and Who Is Eligible?
THR (Tunjangan Hari Raya) is a non-wage income that employers are required to provide to employees ahead of religious holidays, including Eid for Muslim employees. It is intended to help workers meet their needs during Ramadan and celebrate the holiday more comfortably.
This obligation is regulated under Indonesian labor laws, specifically Government Regulation (PP) No. 36 of 2021 on Wages and Minister of Manpower Regulation No. 6 of 2016 on Religious Holiday Allowance. In other words, THR is not just a company policy—it is a legal requirement.
Employees eligible for THR include those who have an employment relationship with a company, whether permanent employees (PKWTT) or contract employees (PKWT), with a minimum of one month of continuous service.
So even if you haven’t worked a full year by Ramadan or Eid, you are still entitled to THR based on the applicable calculation.
How to Calculate THR for Employees with 12 Months or More of Service
For employees who have worked continuously for 12 months or more, THR calculation is quite straightforward. The length of service is calculated from the start date until just before the holiday.
For example, if you started working on April 1, 2024, and Eid falls in April 2025, your service period is already 12 months or more. In this case, you are entitled to full THR.
The amount of THR for employees with at least 12 months of service is equal to one month’s salary. This typically includes the base salary plus fixed allowances, or the total salary if using an all-in system.
Formula:
THR = 1 month’s salary
Example:
If your monthly salary is IDR 5,000,000, then your THR before Eid will be IDR 5,000,000.
How to Calculate THR for Employees with Less Than One Year of Service
What if you haven’t worked for a full year? In reality, not all employees have completed one full year of service by Ramadan or Eid. In this case, the company is still required to provide THR, but the calculation is done proportionally based on your length of service.
To calculate THR for less than one year, divide your length of service (in months) by 12, then multiply by one month’s salary. This ensures fair compensation even if you haven’t worked a full year.
Formula:
(Length of service ÷ 12) × 1 month’s salary
Example:
You have worked for 6 months with a monthly salary of IDR 6,000,000.
(6 ÷ 12) × 6,000,000 = IDR 3,000,000
This means you are entitled to THR of IDR 3,000,000. As long as you have worked for at least one month continuously, the company is still obligated to provide THR.
How to Calculate Prorated THR
The term prorated refers to a proportional calculation based on a specific period. In the context of THR, prorated THR is used to determine the allowance amount based on how long an employee has worked within a year. This is commonly applied to contract employees, new hires who joined shortly before Eid, or certain administrative conditions where the service period is less than 12 months.
Although the term is different, the formula used is essentially the same as the calculation for less than one year of service.
Prorated THR Formula:
(Number of months worked ÷ 12) × 1 month’s salary
This approach ensures that THR calculations are fair and transparent, as they are aligned with the employee’s length of service.
So what’s the difference between prorated THR and THR for less than one year? The difference lies mainly in terminology and context. THR for less than one year typically refers to new employees, while prorated THR is a general term for proportional calculations. In practice, both use the same formula.
THR Payment Timeline
THR must be paid no later than 7 days before the relevant religious holiday, such as before Eid. This rule ensures that employees have sufficient time to prepare for Ramadan and Eid celebrations.
Employers are not allowed to pay THR in installments, except under special conditions regulated by the government. Late payments may result in administrative sanctions in accordance with applicable laws.
How to Use Your THR Wisely
After understanding how to calculate THR, the next step is managing it wisely. Many people tend to spend their THR on consumptive needs during Ramadan and Eid, but here are some strategies to consider:
- Prioritize essential needs for Ramadan and Eid
- Set aside a portion for savings or an emergency fund
- Use it to pay off debts or financial obligations
- Avoid impulsive, unplanned spending
With proper management, THR can support not only short-term needs but also strengthen your financial condition after Eid.
Understanding how to calculate THR is important so you know exactly what you are entitled to before Ramadan and Eid. Whether you are a full-year employee, a new hire, or subject to prorated calculation, all scenarios are governed by clear formulas and legal regulations.
By knowing the correct calculations, you can ensure that the THR you receive is accurate. Moreover, managing your THR wisely will help you go through Ramadan and celebrate Eid with greater peace of mind and better financial planning.
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