Yesterday we received an excellent series of posts from ‘Bernard’, who is very well-informed about taxation matters in Indonesia as they pertain to expats. What Bernard has confirmed, backing up the pioneering efforts of a TBI Bekasi teacher who took TBI to Manpower, is this very important piece of information. Expat teachers are entitled to receive a bonus one months’ salary at Lebaran or Christmas. Bernard explains that a lot of businesses merely pocket the expat salaries, expecting that expats won’t know their legal rights. In TBI Kuningan alone the expat salaries could often be in the Rp 150.000.000 range for a single month. That means from TBI Menara Kuningan alone, someone, or more likely a group of people, have been taking $15,000 every year that was supposed to go to expat teachers! You multiply this out of a number of years and you get one of the biggest ever scams in the whole TBI arsenal. Add in Riau, Dago and Sudirman and the amount soars much higher. At this point, the thing to do is to ask TBI where your THR pay went to. If you worked there all through 2012, you are entitled to a full months’ bonus salary. There are many illegal teachers inside TBI now, and their position is a legal ‘twilight zone’ on multiple levels, but legally employed teachers with a KITAS should now be asking questions. In the past hiring a lawyer has often focused minds at TBI Head Office. Here is Bernard’s informative post:

Indonesian law specifically states that ALL employees, regardless of national origin, must receive the 13th month bonus annually. The only available options are that companies can opt to pay Muslims at Idul Fitri and Christians at Christmas, and that the bonus may be pro-rated for employees who have been on payroll less than one year. The bonus is not performance based nor does it have anything to do with company profitability. Furthermore, the law requires companies to pay into the Jamsostek retirement system on behalf of all employees, unless an expat can prove that he or she is covered by a system in their home country. Upon termination, the employee has the option to take a full pay-out or roll it over into the next job.

Typically, what happens with expats is the employers assume ignorance of the law, so they show a paper payment of the annual bonus (and perhaps Jamsostek), but pocket the money rather than give it to the employee. Remedies for expats include hiring a lawyer to go after the money, which is pretty effective, as most employers roll over as soon as they are challenged. If not, the expat can contact KPK (corruption commission) and/or local media.

The law in this matter is quite clear and unambiguous. There is no room for weaseling out. It is fairly easy to find a lawyer to take a percentage of any money collected, and collection efforts can cover any amount of past obligations. Also, expats should carefully check their tax statements at this time of year to make sure they are not being charged tax on money they did not receive. It is very hard to hide this sort of thing and the tax statement is one place that is pretty obvious, since the employer will want to pocket the money but avoid the tax burden, as well as have a paper trail showing they paid the annual bonus.

Anyone who finds their tax report shows money paid that they did not receive should start raising holy hell about it, contact their tax office, find a lawyer, etc.