Minister of Manpower Circular Letter No. M/3/HK.04.00/III/2026: Mandatory Payment of Religious Holiday Allowance (THR) in 2026

THR Online driver Ojol

The Ministry of Manpower of the Republic of Indonesia has issued Circular Letter No. M/3/HK.04.00/III/2026 concerning the Implementation of Religious Holiday Allowance (Tunjangan Hari Raya or “THR”) Payments for Employees in 2026 (“Circular Letter 3/2026”).  The issuance of this circular letter forms part of the Government’s annual practice of reminding employers of their obligation to provide THR to employees ahead of major religious holidays, particularly the upcoming Eid al-Fitr. 

While Circular Letter 3/2026 does not introduce new legal norms, it reiterates the mandatory nature of THR payments under Indonesian employment regulations, including Government Regulation No. 36 of 2021 on Wages, and Minister of Manpower Regulation No. 6 of 2016 on Religious Holiday Allowance.  

 

Key Requirements under Circular Letter 3/2026 

  1. Employee Eligibility
    THR must be provided to employees who have completed at least 1 (one) month of continuous service. 
    THR payments apply to either: 

    • Indefinite-Term Employment Agreements (Perjanjian Kerja Waktu Tidak Tertentu – PKWTT); or 
    • Fixed-Term Employment Agreements (Perjanjian Kerja Waktu Tertentu – PKWT).  
  2. Payment Deadline
    THR must be paid no later than 7 (seven) days before the relevant religious holiday celebrated by the employee.

    THR Calculation

    The THR amount is determined based on the employee’s length of service: 

    • Employees with 12 months or more of continuous service are entitled to 1 (one) month’s wages. 
    • Employees with at least 1 month but less than 12 months of service are entitled to a proportional amount, calculated based on their length of service.  

      For employees whose wages are calculated based on daily wages or output-based compensation, THR must be calculated based on the average wages received within the relevant reference period.

  3. Payment Must Be Made in Full
    THR may not be paid in installment, unless agreed otherwise. 
  4. Establishment of THR Complaint Posts
    Regional authorities are instructed to establish THR Posts (Posko THR), which serve as channels for employee consultation and complaints regarding THR payments.  

Business Impact for Employers 

Although Circular Letter 3/2026 does not introduce new regulatory obligations, it reinforces the Government’s expectation that companies strictly comply with THR payment requirements.  

Companies should therefore ensure timely payment of THR, verify employee eligibility and wage components to ensure accurate calculation, and anticipate potential employee complaints throught THR Posts established by authorities. 

 

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