THR Dilemma of Online Drivers: How Is the Government Responding in 2025?

As Eid al-Fitr approaches, discussions on Religious Holiday Allowances or Tunjangan Hari Raya (“THR”) resurface, particularly regarding online drivers and couriers. While THR for formal employees is a legal obligation under labor law, gig workers like online drivers are not entitled to it. In response to this, the government issued a recommendation through Minister of Manpower Circular No. M/3/HK.04.00/III/2025 or Surat Edaran Menteri Ketenagakerjaan Nomor M/3/HK.04.00/III/2025 (“SE Menaker M/3/HK.04.00/III/2025“), encouraging platform companies to provide a Religious Holiday Bonus. Unlike THR, this bonus is not mandatory, and the amount varies based on company discretion, and driver and courier performance. While this initiative aims to provide financial support, its implementation remains entirely up to each platform.

As Eid al-Fitr approaches, discussions on THR have resurfaced. While THR for formal employees is well regulated under Indonesia’s employment laws, questions about its applicability to online drivers and couriers—who operate in the gig economy—have persisted. In response to these concerns, the government has introduced a new Religious Holiday “Bonus” specifically intended for at online drivers and couriers for the 2025 holiday season. But how exactly does this differ from the mandatory THR provided to formal employees?

Before delving deeper into the Religious Holiday Bonus for online drivers and couriers, it is important to first understand the traditional obligations of employers regarding THR for formal employees. When must the THR payment be made, and how is the amount calculated? Let’s explore the key details and distinctions below.

Employer Obligation to Provide THR to Employees

THR is an employer’s obligation that is mandatory to acknowledge the contributions of employees and to support their holiday expenses. The primary legal basis for providing THR is Minister of Manpower Regulation No. 6 of 2016 on Religious Holiday Allowances for Workers/Laborers in Companies (“MOMR 6/2016”). THR is classified as non-wage income that employers must pay to employees or their families before the relevant religious holiday. ¹

THR is paid annually, which is aligned with each employee’s religious holiday,² and must be disbursed no later than seven days before each religious holiday.³ For 2025, the deadline for employers to fulfill their THR payment obligations is clarified in Minister of Manpower Circular No. M/2/HK.04.00/III/2025 on the Implementation of Religious Holiday Allowances. Assuming Eid al-Fitr falls on March 31, 2025, the last date for THR payments to Muslim employees is March 24, 2025.

THR Amount and How to Calculate It

Under current regulations, the amount of THR paid depends on the employee’s employment status and length of service.

THR Amount for Permanent and Contract Employees
THR applies to employees either on a Permanent Employment Agreement (PKWTT) or a Fixed-Term Employment Agreement (PKWT), with the following conditions: ⁴
- Employees with a continuous service period of 12 months or more → Entitled to receive THR of at least 1 month’s full salary.
- Employees with a service periode of at least 1 month but less than 12 months → Entitled to receive THR that is calculated proportionally with the following formula:
  
  This regulation applies to all employees in an employment relationship, either permanent or fixed-term based, as long as they have worked continuously for at least one month.
THR Calculation for Employees with Special Wage Schemes
THR calculations vary for employees with different wage schemes, including:
- Freelance Daily Workers
  - Service period of 12 months or more → THR is calculated based on the average wage over the past 12 months.
  - Service period of less than 12 months → THR is calculated based on the average monthly wage during their work period.
- Employees Paid on a Performance-Based (Piece Rate) System
  THR is calculated based on the average wage over the past 12 months before the holiday. If the employee has worked for less than 12 months, the calculation is based on the average monthly wage during their work period.
- Employees with Special Agreements
  If the Employment Contract, Company Regulation or Collective Labor Agreement specifies a THR amount greater than the government-mandated minimum, then the THR must be paid according to those provisions.

Religious Holiday Bonus for Online Drivers and Couriers

In recent years, as Eid approaches, the question of whether online drivers and couriers are entitled to THR has consistently emerged as a pressing issue. As gig economy workers, their employment status is often the subject of debate in relation to existing labor laws.

Recently, the government addressed this issue through a Presidential Press Statement, emphasizing better protection and fair compensation for online drivers and couriers.⁵ This was soon reinforced through SE Menaker M/3/HK.04.00/III/2025, encouraging ride-hailing and delivery platforms to provide a Religious Holiday Bonus for registered drivers and couriers.

The key provisions of the circular include: ⁶

No Fixed Standard → Unlike THR, the Religious Holiday Bonus has no fixed amount such as one month’s salary calculation. Each platform determines the amount independently.
Performance-Based Calculation → High-performing drivers are entitled to a bonus of 20% of their average net income over the past 12 months, leading to variable amounts for each individual.
Discretionary Bonus for Other Drivers → Drivers who do not meet the high-performance criteria will receive a bonus based on the platform’s financial capacity.
No Legal Requirement for Full Payment → Since the Religious Holiday Bonus is not a legal obligation, platform companies have discretion over both the amount and eligibility criteria.

It is important to note that this bonus is not legally mandated. Unlike THR for formal employees, which must be provided under labor laws, the Religious Holiday Bonus remains a voluntary initiative subject to each platform’s discretion.

Legal Status of THR or Religious Holiday Bonus for Online Drivers and Couriers

Legally, online drivers and couriers are not classified as employees, making their entitlement to THR or bonuses a recurring debate. Under Law Number 13 Year 2003 concerning Employment as amended by Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation, an employment relationship must meet three key criteria: ⁷

Existence of Work → Online drivers and couriers perform work in the form of passenger transport and delivery services.
Existence of Command → In a formal employment relationship, directives come from an employer. However, in platform-based work, orders come from consumers via the application, giving drivers full autonomy over their working hours.
Existence of Wages → In a formal employment setting, employers pay a fixed salary. However, online drivers do not receive fixed wages; instead, they earn through a profit-sharing scheme with the platform and must pay application service fees to the company.

Since these three criteria are not fully met, we conclude that online drivers and couriers do not fall within the legal definition of workers under labor laws. The existing relationship is primarily based on a “partnership mechanism” (mitra), where drivers set their own hours, are not paid a salary, and their income is based solely on their performance.

That being said, we are of the view that the government shares a similar view, as they intentionally use different terminology. For employees, the government uses “allowance,” while for online drivers and couriers, they refer to it as a “bonus.”

Conclusion

Employers are legally obligated to provide THR to their employees, while the government encourages app-based companies to offer a Religious Holiday Bonus to online drivers and couriers. Although not legally binding, this initiative is designed to provide financial support to gig economy workers.

For further information on THR obligations, labor laws, or legal consultations, please contact us at ADCO Law.

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