One type of tax that must be paid is income tax. If you are already earning, you should know how to calculate this income tax.
Based on the applicable laws and regulations, that PPh (income tax) is imposed on all income in any form.
Both wages, honorarium, salaries, benefits, and various payments related to work, positions and services provided.
Income tax is imposed on income for one year for individuals and also business profits for entities which are often called corporate income tax .
Another example of income tax is gifts in the form of net assets and can be used to increase wealth or consumptive activities.
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For more details, you can learn through the Complete Guide and Simulation of Personal Income Tax (PPh) Reports .
How to Calculate Income Tax Easily
To be able to calculate the income tax that must be paid, the net income must be found first.
The way to calculate net income or net income is gross income minus costs for obtaining, collecting and also maintaining income or income.
You can calculate the amount of this income manually using excel or by using online accounting software .
That is, pension funds, bank credit as well as debt are included in it. After the amount of net income is found, proceed with the following steps.
1. Calculate PTKP (non-taxable income)
After obtaining the amount of net income in one year, you must calculate the amount of Non-Taxable Income.
The goal is to find out the amount of Taxable Income (PKP). Taxpayers whose income is equal to or below the PTKP are automatically not subject to PPh.
PTKP tax rate itself has been determined. PTKP rates that are important for you to understand include:
- Rp. 54. 000,000 in the name of an individual or individual taxpayer without dependents
- Rp. 4,500,000, additional tax payers who are married
- Rp. 54,000,000 for a wife whose income is added up with her husband’s income
- Rp. 4,500,000 additional per person and a maximum of three people, for blood family members of one straight line or adopted children who are fully dependent
2. Calculate Taxable Income (PKP)
The next step that must be taken as a way to calculate income tax is to calculate the PKP.
You can get the results of the calculation by means of net or net income minus Non-Taxable Income (PTKP).
Next, you just need to multiply the PKP results with the rate or percentage according to the provisions. The result of this multiplication is the amount of income tax that you have to pay
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Income Tax Rates
According to the method for calculating personal income tax above, after finding the PKP value, you just need to multiply it by the PPh percentage.
The percentage or rate of income tax is adjusted according to Law no. 46 of 2008, namely:
- A tax rate of 5% will be imposed on net income of less than 50 million
- A tax rate of 15% is imposed on net income whose value ranges from 50-250 million
- A tax rate of 25% is imposed on net income of 250-500 million
- Meanwhile, for income above 500 million, it will be multiplied by an income tax rate of 30%.
To facilitate the practice of calculating income tax, we make a calculation simulation as follows.
Wahyu is a private employee with one child. He has a gross income of 150 million rupiah each year. Wahyu also pays pension contributions of 1 million each month.
Then the way to calculate the income tax that Wahyu must pay each year is:
- Calculate net income (gross income-contributions), 150 million – (12x 1 million)= 138 million
- Calculate PTKP = Wahyu + wife + children = 54 million + 4,500,000 + 4,500,000 = 63 million
- Calculate Taxable Income (PKP) = Net income – PTKP = 138 million – 63 million = 75 million
- Calculate the income tax that Wahyu has to pay in a year. Because his salary is 75 million, the PKP is multiplied by the PPh rate of 15%. Then 75 million x 15% = 11,250,000
So, in one year, the amount of income tax that Wahyu has to pay is 11,250,000 rupiah.
Mistakes in How to Calculate Income Tax that Often Occur
When you understand the mechanism, actually calculating the nominal income tax that must be paid is quite easy to do.
However, some people often make fairly basic mistakes due to a lack of accuracy, which makes it complicated and wrong in the calculations.
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Here are some mistakes that often occur in calculating the amount of income tax that must be paid.
1. Wrong Use of Income Tax Rates
The first mistake that often occurs is the use of the wrong tax rate. Therefore it is important for you to understand the rates for income tax according to the provisions.
Do not let income below 50 million be subject to a tax rate of 15% which should be reserved for income above 50 million or vice versa.
Understand the applicable tax rate guidelines. Don’t forget to calculate the PKP correctly so that the amount of income tax payable is also correct.
2. Do not understand PTKP
PTKP or Non-Taxable Income is the value of income that is free or not subject to tax.
Therefore, taxpayers whose income is equal to or even below the PTKP value are not burdened with the obligation to pay income tax.
Therefore, make sure you don’t misunderstand or miscalculate the PTKP so that you don’t have to bear the obligation to pay income tax with an income equal to or below the PTKP.
This is because the provisions for imposing taxes on taxpayers have been adjusted to their basic needs in one year.
Make sure the number of dependents included is a maximum of three people. Thorough in filling out taxpayer information as well as dependents along with calculating the PTKP rate.
3. Does not Include Office Fees
For employees of state-owned enterprises, civil servants and private employees, of course they are no strangers to the term job costs in their profession.
The office fee in question is a fee to obtain, collect and also maintain income.
Generally the cost of this position is 5% of gross or gross income. This must be included in the calculation of income tax, because it affects the amount of tax that must be paid.
From the various explanations above, we can draw the conclusion that to be able to get a large income tax, you have to find net income first.
The net income in question can be obtained from the reduction of gross income for one year by contributions, fees and various other obligations.
The obligations in question are related to the acquisition and maintenance of your income.
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It doesn’t stop there, you also have to find the right PTKP nominal to then generate Taxable Income.
You can multiply the amount of taxable income by the tax rate according to the provisions based on the range of nominal income.
Make your tax calculations more accurate with an online tax application , because with the right income tax calculation, it will make it easier for you to carry out your obligations as an obedient taxpayer.
This method of calculating income tax will also help you make financial plans in the future so that you are more focused and less cluttered.