Kompas TV Layoffs: Tax Aspects of Severance Pay Every Employee Must Understand
In early 2025, the Indonesian media industry was rocked by a wave of layoffs at Kompas TV. For many affected employees, the news was not just about losing a job—it was about navigating the uncertainty of the future, emotionally and financially. One aspect that often escapes attention amid the anxiety of job loss is the tax implication of severance pay. Yet, understanding this can make a real difference in how former employees manage their finances post-layoff.
This article aims to provide clear, compassionate guidance on the taxation of severance pay in Indonesia. Whether you’re one of the former Kompas TV employees or simply someone looking to be informed, this guide is for you.
What Is Severance Pay?
Severance pay is compensation paid by an employer to an employee when their employment ends involuntarily—typically through layoffs or redundancy. Under Indonesian labor law, this is not just a courtesy; it is a legal obligation. Employers must provide severance pay, long service pay, and compensation for rights in accordance with the Job Creation Law (UU Cipta Kerja) and its amendments.
The total severance package can consist of:
Severance Pay (Uang Pesangon)
Long Service Award (Uang Penghargaan Masa Kerja)
Compensation Pay (Uang Penggantian Hak)
While this package offers a temporary financial cushion, it’s important to remember that the severance you receive is subject to taxation under Indonesian tax laws.
How Severance Pay is Taxed in Indonesia
The Directorate General of Taxes (DJP) classifies severance pay as a form of income. However, it is treated differently from regular monthly salary. According to Article 21 of the Income Tax Law (PPh 21), severance pay has its own tax treatment with specific non-taxable thresholds (PTKP).
As of the latest tax regulation (PMK No. 16/PMK.03/2010 and its updates), here’s how severance pay is treated:
1. Tax-Free Portion (Non-Taxable Threshold)
There is a non-taxable limit for severance pay. For example, the first Rp50,000,000 of severance may be tax-exempt. The actual figure can vary depending on your years of service and the type of payment (severance, long service, or compensation).
2. Progressive Tax on the Excess Amount
Any severance pay above the tax-free limit is subject to progressive tax rates, which are:
5% for income up to Rp50,000,000 after exemption
15% for income between Rp50,000,001 – Rp250,000,000
25% for income between Rp250,000,001 – Rp500,000,000
30% for income above Rp500,000,000
This is different from the tax rates applied to your regular monthly salary and must be calculated separately.
Who Is Responsible for Paying the Tax?
The employer—in this case, Kompas TV—is obligated to calculate, withhold, and pay the appropriate income tax on behalf of the employee at the time the severance is disbursed. The amount received by the employee is already net of tax unless otherwise stated.
However, employees should still:
Request a breakdown of their severance components
Keep documentation (e.g., slip of severance, tax calculation, and final payment details)
Check the accuracy of the tax withheld
What Happens After You Receive Severance Pay?
For most employees, the tax process ends once the severance is paid and taxed by the employer. However, if your severance is significant or you have other income sources during the same year (such as freelance work, side business, or investment income), it may affect your annual tax return (SPT Tahunan).
In this case:
You are required to report the severance income in your annual tax return
Any excess tax or underpayment can be calculated at year-end
Ensure all severance tax has been properly credited to your NPWP (Tax ID)
It’s advisable to consult a tax consultant if you’re unsure.
Why Understanding Severance Tax Matters
Losing a job is hard enough; you don’t want unexpected tax bills to make it worse. Knowing your rights and obligations regarding severance tax can help you:
Avoid overpaying or underpaying taxes
Prepare better for financial planning post-layoff
Make informed decisions on how to use your severance wisely
For example, if you plan to invest part of your severance, knowing how much is actually yours after tax helps with setting realistic goals. Or if you’re considering starting a freelance career, being aware of how severance interacts with future income can keep you tax-compliant.
The Human Side: Stories Behind the Numbers
Several former Kompas TV employees shared their experiences. One senior producer, who had been with the company for 12 years, mentioned that while the severance was fair, the lack of clear information about the tax made it harder to budget for the months ahead.
“I only realized after a week that part of the severance had gone to taxes. I wish I had known earlier—it would have helped me plan better,” she said.
Another junior reporter found comfort in learning that her severance was below the taxable threshold, meaning she received the full amount. “It was a relief,” she said. “That money helped cover rent and essentials while I looked for new work.”
Practical Tips for Laid-Off Employees
If you’ve recently been laid off, here’s what you should do regarding severance and tax:
1. Ask for Written Documentation
Request an official statement showing the breakdown of severance and taxes withheld.
2. Check Your NPWP Status
Ensure your tax identification number is active and linked to your severance payment.
3. File Your Annual Tax Return
Even if tax has been withheld, you may still need to report your severance in your annual SPT.
4. Consult a Tax Advisor
If your severance is significant or if you expect other income this year, consider professional tax advice.
5. Save Copies of All Tax Documents
These may be needed later, especially if you’re applying for a tax refund or auditing your finances.
In Closing: Empowerment Through Understanding
While layoffs like those at Kompas TV are undoubtedly challenging, employees can take control of their financial journey by understanding how severance pay works especially the tax implications. Tax laws can seem intimidating, but with the right information, you can navigate them confidently.
Let’s not just survive job loss—let’s use knowledge to emerge stronger.