Everyone who has income and has met tax requirements must pay and report income tax, including influencers. In today’s digital age, digital monetization is a common practice. Influencers are an example of digital monetization actors who create content for social media. This makes many businesses promote through influencers. The influencer profession itself is classified as a freelance job that is quite busy being engaged in by various people, especially young people. Then what about the taxation aspect of an influencer?
Influencers use many social media platforms, such as Instagram, Tiktok, Youtube, and others, to get fees or remuneration for activities carried out on social media. Influencer income earned on fees or payments for these services comes from activities such as endorsements, paid promotions, brand ambassadors, paid reviews, and Google AdSense, which must be subject to and reported as income tax. Of course, the amount of influencer income is not always the same, this is based on various aspects such as the number of followers, the quality of the content posted on social media. The income of these influencers is now quite promising because one post can earn millions of rupiah, even hundreds of millions of rupiah. If every day there is some endorsement content that is uploaded on social media, it is possible that within a month you can earn tens or even hundreds of millions in income. Then how can the tax office find out about this?
The Directorate General of Taxes (DGT) has a system used to monitor taxpayer social media through the Social Network Analytics (SONETA) system. Through this system, DGT can view and compare income tax and VAT data on social media. DGT also optimizes DGT Enterprise search to analyze taxpayers, such as family members and assets under company ownership. Then what is the tax calculation mechanism?
The influencer profession is included in the individual taxpayers just like any other profession. Taxpayers who work as influencers are classified as art workers or artists. The imposition of income tax on arts workers as influencers is divided into two categories:
- Income Tax Article 21: If the influencer is in direct contact with the service user,
- Income Tax Article 23: If the influencer will be deducted under Income Tax Article 23 if the service user endorses the influencer through agent services. This is known as through a third party.
Regarding Income Tax Article 21, there are two types of tax payment processes, namely:
- Income Tax Article 21 is deducted, meaning that influencer service users will deduct Income Tax Article 21 and deposit it in the state treasury. That way, the influencer only has to report his annual tax return.
- Income Tax Article 21 is self-paid, meaning that the influencer service user does not collect Income Tax Article 21 for the services used. Thus influencers who get a service fee without being deducted from Income Tax Art must deposit Income Tax Art 21 themselves to the state treasury.
The following is the formula used to determine the tax basis (DPP) for the influencer profession in accordance with the Law on General Provisions and Tax Procedures (UU KUP) with the provisions for calculating net income:
A. Freelance Influencers
Influencers are freelancers who are not under the auspices of any agency and are required to maintain bookkeeping if the income earned is more than IDR 4.8 billion for a year.
Formula: Gross Income – Expenses -/+ Fiscal Correction
If an influencer’s income is less than IDR 4.8 billion for a year, he has to make a record.
Formula: Gross Income x Norm for Calculation of Net Income
B. Influencers in Agency Services
For influencers who are under the auspices of the agency (company), the calculation of this income tax deduction is the same as withholding tax under Article 21 which is generally done by companies for their employees. If the influencer only earns income from working relationships with withholding Tax Article 21/26 deductions and does not earn other income, here is the calculation formula:
Formula: (50% of the cumulative gross income – non taxable income per month) x Article 17 Income Tax Rate
If it turns out that the influencer also has other sources of income apart from working with the Income Tax 21/26 withholding agent, and earns other income, then the formula is:
Formula: 50% of the cumulative gross income x Article 17 Income Tax Rate
In calculating influencer income tax as an individual taxpayer, there are several choices of calculation methods, namely:
- Using the standard Individual Income Tax mechanism
The calculation of influencer income tax uses the Norm for Calculation of Net Income (NPPN) with the classification of business fields NPWP 90002 (art work activities) as referred to in Regulation of the Directorate General of Taxes Number PER-17/PJ/2015 concerning NPPN.
The NPPN method is only used by taxpayers whose gross income is less than IDR 4.8 billion a year. To use the NPPN method, a notification must be submitted to the DGT in advance.
- Using the normal income tax mechanism of the bookkeeping method
If an influencer is an individual taxpayer who runs a business and/or does freelance work by doing bookkeeping. Bookkeeping is the process of recording financial transactions, which include assets, liabilities, capital, income, and costs. Then, a personal income tax calculation rate will be charged in accordance with Article 17 paragraph (1) letter a the Income Tax Law by using the progressive personal income tax rate.
- 5% of taxable income up to IDR 60,000,000 per year
- 15% of taxable income, from IDR 60,000,000 to IDR 250,000,000
- 25% of taxable income, from IDR 250,000,000 to IDR 500,000,000
- 30% of taxable income, from IDR 500,000,000 to IDR 5,000,000,000
- 35% of taxable income above IDR 5,000,000,000
This is an explanation regarding the calculation of tax rates on income as an influencer.