Criteria for Workers Eligible to Receive Religious Holiday Allowance (THR) and Its Amount

Religious Holiday Allowance (THR) is the employee’s most awaited benefit before Eid al-Fitr. This specific allowance is different from typical employee compensation, such as bonuses, incentives, or commissions, and must be granted to every employee in the company.

In March last year, the Ministry of Manpower (Kemnaker) released the Circular Letter (SE) No. M//HK.0400/III/2023 regarding the Implementation of Providing Religious Allowance in 2023 for Workers/Laborers in Companies. This regulation serves as a reference for the Heads of Employment Services in each province.

The circular letter includes every aspect relating to the implementation of providing religious holiday allowance for workers. It covers the criteria for eligible workers, the calculation, and the timeframe of payment.

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Religious Holiday Allowance  Recipient Criteria

Employees who have worked continuously for one month or more are eligible to receive the religious holiday allowance.

The intended employees are those who sign the permanent term contract (PKWTT) or the indefinite term contract (PKWT). They also include daily workers who meet the requirements for receiving the allowance according to laws and regulations.

The Calculation of Religious Holiday Allowance

Employees who have worked for 12 months or more receive an allowance equal to one month’s base salary.

For employees with less than 12 months of service, the allowance is pro-rated based on the work period. It is calculated by dividing the number of months worked by 12 and then multiplying by one month’s base salary.

For instance, a new employee who has been working for six months will receive an allowance equal to half of the base salary.

The allowance for daily workers is calculated based on the average wage received during 12 months before the religious holiday.

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A similar formula applies to workers whose wages are set based on units of output. For daily workers who have worked less than 12 months, the allowance is calculated by the average wage received every month during the period of employment.

The Timeframe of Religious Holiday Allowance Payment

The Ministry of Manpower doesn’t specify the exact date for allowance payment. Typically, companies must pay the religious holiday allowance no later than seven days before Eid al-Fitr.

According to the national calendar, the 2024 Eid al-Fitr 1 Shawwal 1445 H falls on April 10, 2024. This means that all companies are required to conduct allowance payments by April 3, 2024, at the latest.

The 7-days-prior regulation was created to support employees' need to prepare for religious holidays. The Ministry of Manpower further mandates that the religious holiday allowance must be paid in full, in a single cash payment, not in installments.

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Those are several regulations regarding the implementation of providing religious holiday allowance before Eid al-Fitr. This regulation is mandatory and binding for all companies or employers.

HR is typically responsible for this implementation of providing religious holiday allowance. Thus, employees can prioritize their focus on other tasks.

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