For small businesses with turnover up to Rp4.8 billion: the 0.5% final tax on gross turnover, the Rp500 million that individuals earn tax-free, and when monthly payments start.
Small businesses can pay income tax as a flat 0.5% of gross turnover instead of the normal rates on profit. It is a final tax: you pay it monthly by the 15th of the following month, and there is nothing more to pay on that income when you file your annual return. There are no deductions for costs, which is why it suits businesses with healthy margins and simple books.
PP 20/2026, in force from 22 April 2026, replaced PP 55/2022 and rewrote who can use the scheme:
| Taxpayer | Can use 0.5%? | Time limit |
|---|---|---|
| Individual | Yes | No limit while turnover stays within Rp4.8bn |
| PT Perorangan (single-person company) | Yes | No limit while criteria are met |
| Cooperative | Yes | 4 tax years (existing co-ops keep their original period) |
| CV, firma, regular PT, BUMN/BUMDes | No — use normal corporate tax | — |
The previous seven-year limit for individuals had expired for many early users at the end of 2024. Under the transitional rules, individuals and PT Perorangan who were using 0.5% in 2024 or 2025 can continue in 2026. The Rp500 million tax-free turnover for individuals is unchanged. The Rp4.8 billion threshold now includes husband and wife combined and any PT Perorangan they set up, to stop splitting a business to stay under the limit.
Not always. At 0.5% of turnover the tax equals a 25% tax on profit if your margin is 2%, or 5% tax on profit at a 10% margin. A business with very thin margins, losses, or turnover below about Rp500 million plus PTKP may pay less under normal rates with proper bookkeeping. You can choose normal rates by notifying DJP; once you do, you cannot return to 0.5%.
Eligibility depends on your registration date and history under PP 23/2018 and PP 55/2022. Confirm your position with DJP or a registered tax consultant.