Are Companies Required to Pay Religious Holiday Allowances (THR) to Freelancers?

Introduction

Ahead of Religious Holidays, many freelance workers or freelancers inquire about their entitlement to Religious Holiday Allowances (“THR”) from the companies for which they perform work. The issue centers on whether employers are required to pay THR to workers who do not hold permanent employee status and how employers should calculate the amount of THR payable to such workers. On 2 March 2026, the Ministry of Manpower issued Circular Letter Number M/3/HK.04.00/III/2026 on the Implementation of the Provision of Religious Holiday Allowances for Workers/Laborers in Companies in 2026 (“Minister of Manpower Circular Letter 3/2026”). Minister of Manpower Circular Letter 3/2026 ensures that employers fulfill their obligations to provide Religious THR to workers or laborers. This policy aligns with Minister of Manpower Regulation Number 6 of 2016 on Religious Holiday Allowances for Workers/Laborers in Companies (“MoM Regulation 6/2016”).

 

Religious Holiday Allowance (THR)

Article 1 point 1 of MoM Regulation 6/2016 defines Religious THR as non-wage income that employers are required to pay to workers/laborers or their families prior to a Religious Holiday.

 

Workers/Laborers

Furthermore, Article 1 point 4 stipulates that Workers/Laborers are any individuals who perform work in return for wages or other forms of remuneration. Workers in this context include various types of workers, including freelance workers, as long as they perform work and receive wages from an employer.

 

Requirements for Freelancers to Receive THR

Labor law requires employers to provide THR to workers regardless of their permanent employment status. Under Article 2 paragraph (1) of MoM Regulation 6/2016, employers must provide Religious THR to workers who have completed a continuous service period of one month or more. Article 2 paragraph (2) further stipulates that employers provide THR to workers who maintain an employment relationship based on either an indefinite-term employment agreement or a fixed-term employment agreement.

Point 1 letters a and b of Minister of Manpower Circular Letter 3/2026 reaffirm that freelance workers are entitled to THR because they are generally bound under a fixed-term employment agreement scheme. However, such freelance workers must have completed a continuous service period of at least one month.

Accordingly, companies must provide THR to freelancers if the following two main requirements are satisfied:

1. The freelancer has completed a continuous service period of 1 (one) month or more.
2. The freelancer maintains an employment relationship with the employer based on an Indefinite-Term Employment Agreement (PKWTT) or a Fixed-Term Employment Agreement (PKWT).

Therefore, freelancers such as freelance journalists, graphic designers, video editors, instructors/tutors, and content writers are entitled to THR as long as they satisfy the service period requirement and maintain an employment relationship (such as under a PKWT) with the company.

 

THR Calculation

Under Article 3 paragraph (3) letter a of MoM Regulation 6/2016 and Point 4 letter a of Minister of Manpower Circular Letter 3/2026, if a freelance worker has completed a service period of twelve months or more, the employer must calculate one month’s wages based on the average wages received by the worker during the last twelve months prior to the Religious Holiday.

Conversely, for freelance workers whose service period is less than twelve months, Article 3 paragraph (3) letter b of MoM Regulation 6/2016 and Point 4 letter b of Minister of Manpower Circular Letter 3/2026 stipulate that employers must calculate one month’s wages based on the average monthly wages received during the worker’s service period.

Furthermore, for workers whose wages are determined based on output units, Point 5 of Minister of Manpower Circular Letter 3/2026 instructs employers to calculate one month’s wages based on the average wages during the last twelve months prior to the holiday.

 

THR Payment Deadline and Prohibitions

Article 5 paragraph (4) of MoM Regulation 6/2016 requires employers to pay THR no later than seven days before the Religious Holiday. Point 2 of Minister of Manpower Circular Letter 3/2026 also encourages companies to provide THR earlier than this deadline. Employers must provide THR in monetary form using Indonesian rupiah as stipulated in Article 6 of MoM Regulation 6/2016.

In addition, Point 7 of Minister of Manpower Circular Letter 3/2026 prohibits employers from paying THR in installments. Accordingly, employers must pay THR in full. If employers neglect this obligation, Article 10 paragraph (1) of MoM Regulation 6/2016 imposes a fine of five percent of the total THR payable starting from the expiration of the payment deadline. The imposition of this fine does not eliminate the employer’s obligation to pay THR in full to the worker pursuant to Article 10 paragraph (2) of MoM Regulation 6/2016, and employers will also receive administrative sanctions if they intentionally fail to pay THR entirely in accordance with Article 11 paragraph (1) of MoM Regulation 6/2016.

 

Recommendations

As a mitigation measure against violations, the government has instructed the establishment of a Labor Task Force Command Post. Freelance workers whose companies fail to pay THR, pay it in installments, or calculate THR below the prescribed average wage provisions may proactively report such violations. Workers may access these integrated consultation and law enforcement services through the official website https://poskothr.kemnaker.go.id.

Confused by complicated legal provisions? Veritask offers its AI legal assistant, AIYU, which can help summarize the provisions you need in accordance with Indonesian laws and regulations, try it for free now!

 

Closing

Companies must provide Religious THR to freelance workers or daily freelance workers (freelancers) who satisfy the minimum service period requirement of one continuous month. Employers must calculate the THR amount for such freelance workers using the formula based on the average monthly wage and must pay it in full without an installment scheme using Indonesian rupiah. Employers must fulfill this payment obligation no later than seven days before the Religious Holiday in order to avoid the imposition of a five percent fine and other administrative sanctions.

 

References

1. Regulation of the Minister of Manpower Number 6 of 2016 on Religious Holiday Allowances for Workers/Laborers in Companies.
2. Circular Letter of the Minister of Manpower Number M/3/HK.04.00/III/2026 on the Implementation of the Provision of Religious Holiday Allowances for Workers/Laborers in Companies in 2026