Religious Bonuses for Employees in Bali, Indonesia

Staying compliant with regulations is essential when running a business in Bali. In this article, we delve into Indonesia's policies on staff bonuses.

The Indonesian Ministry of Manpower has introduced a new policy regarding annual bonuses, mandating that employers provide their workforce with religious bonuses, known as Tunjangan Hari Raya (THR), at least seven days before the start of the religious holiday.

These bonuses are applicable to all employees who have worked continuously for at least one month, regardless of their employment status (whether they have a fixed-term or permanent contract).

For employees with 12 months or more of continuous service, the standard religious bonus is equivalent to one month's salary. For those employed for more than one month but less than 12 months, the bonus is prorated based on their length of service.

Employers also have the option to offer bonuses exceeding the statutory norms. According to the Ministry of Manpower guidelines, companies can specify higher THR amounts in employment contracts, internal regulations, collective labour agreements, or customary company practices, while ensuring compliance with legal requirements.

Employees who have worked continuously for 12 months or more are entitled to receive a religious bonus equal to one month's salary. This bonus is calculated by averaging their salary over the past 12 months leading up to the religious holiday. For employees with a service duration of more than one month but less than 12 months, the bonus is prorated based on the average salary earned during their employment period.

Temporary workers who have daily labour agreements, as well as those working on the lump-sum payment bases, are also entitled to religious bonuses. The amount is determined by averaging their earnings over the last 12 months prior to the religious holidays.

The THR requirement also extends to certain export-oriented labour-intensive industrial enterprises that implement flexible shift durations, affecting salary rates (Regulation 5/2023). In such cases, THR is calculated based on the last salary before any adjustments.

As for the religious holidays eligible for THR, they typically include Ramadan for Muslims, Christmas for Christians, and Nyepi for Hindus. Considering Indonesia's diverse religious landscape, it's important to be aware of your employees' religious affiliations to identify the relevant holidays for your workforce.

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