1.What is THR?

THR in Indonesia stands for "Tunjangan Hari Raya," which translates to "Holiday Allowance" or "Holiday Bonus." It is a traditional welfare system in Indonesia where employers provide additional compensation or bonuses to employees before Muslim holidays, such as Eid al-Fitr, to assist them in celebrating the holiday.

2.Do non-Muslim employees also receive THR?

Even if employees are not Muslims, some employers may provide similar allowances or benefits for the celebration of other holidays to encourage teamwork and happiness among employees. However, typically, such additional allowances or benefits are paid before major religious holidays such as Christmas for Christians or Diwali for Hindus.

3.What if an employee has no religious affiliation?

If there are no religious restrictions, some companies may also provide a general holiday allowance to encourage employees to celebrate and enjoy traditional cultural festivals or to provide them with additional incentives to enhance teamwork and employee satisfaction. Such benefits may be paid before specific ethnic, cultural, or national holidays to support employees' lives and social participation.

4.Is THR always equivalent to one month's salary regardless of the length of employment?

For employees who have completed one year of service, THR is equivalent to one month's salary. However, if the employment period is less than one year, the calculation is prorated, meaning the number of months worked divided by 12, multiplied by one month's salary.

In summary, THR in Indonesia can be understood as a statutory 13th-month salary, with the timing of payment dependent on the employee's religion and preferences.

Reference Sources

• Korn Ferry — Future of Work / Talent Crunch Research
• World Bank — Ease of Doing Business Reports
• International Labour Organization (ILO) — Global Employment Trends
• Local Government and Labor Ministry Publications (country-specific)