All about family life: 10 million Rupiah income.

What is the standard of living for Indonesian families with a monthly income of Rp 10 million?

Here we provide an illustration of a simple family's life with all the standard cost of living in Indonesia, in the full tax-burden version.

More or less, we will think about the problems of managing the family's finances and seek the right solution with the lifestyle we adopt.

This is what happens in the example of a family: a father earns a salary. Rp10 million per month before income tax, lives with his small family, namely a wife and one child. This family owns a small LCGC 1000 cc vehicle, one child attends a private elementary school, and the wife is a housewife. The small house is already owned and exempt from Land and Building Tax, using a 1300 VA electrical facility. And the father is a smoker, buying one pack a day.

Let us see how their standard household expenditures are, and how much indirect taxes they routinely pay.

After including the father's indulgence cost for a pack of SPM cigarettes (machine-made white cigarettes) priced at Rp30,000 per day, which in one month amounts to Rp900,000. With an excise tax on cigarettes of about 65%, the excise tax that must be paid for the father's enjoyment is Rp 585,000 per month.

Thus the total expenditure for consumption tax, ownership and enjoyment costs is Rp 1,963,500 per month.

Total Estimated Tax Per Month

• Total Indirect Tax = Rp1.378.500,- or approximately 13.79% of a Rp 10 million salary.
• Cigarette tax = Rp.585.000,- or approximately 5.85% of a salary of Rp10 million.
• It means 19,64% The share of their total monthly spending is income tax, consumption, ownership, & enjoyment or a total amounting to Rp 1,963,500.
• So, in other words, net income after deducting income tax burden, consumption, ownership and enjoyment is Rp 10 million – Rp 1,963,500 = IDR 8,036,500
• Household expenses for basic needs + lifestyle ≈ Rp6.7 million/month + Rp900 thousand = Rp7.6 million.
• The remaining money that can be used as savings amounts to Rp.8.036.500 – Rp.7.600.000 = IDR 436,500

Note

1. The numbers may vary depending on the location of the regional entertainment tax rate, the motor vehicle tax (PKB) for each province, and certain electricity subsidies.
2. Car tax when buying BBNKB is very large, but if it is divided evenly per year, it feels like an "additional monthly cost".
3. This family's expenditures do not include the child's school tuition (SPP).

If we look at the condition of this modest family:

• net income: Rp10,000,000
• Total expenditure: ± Rp9.563.500
• The remaining money after expenses and taxes.: Rp 436,500

Not yet included are the tuition fees for private school students. (Rp300,000 per month). If included, the remainder becomes ± Rp136,500 per month, very tight.

Situation Analysis

The largest share of expenses is in transportation and vehicles.

Vehicle tax, Pertamax gasoline, and other costs drain nearly 30–40% of the budget.

LCGC is indeed cheap to buy, but the annual tax burden remains high.

Spending on basic needs is quite high.

Supermarket, mall, and personal items amount to Rp3 million per month.

This purchase is subject to VAT, making it feel heavier.

There is almost no emergency money left.

Rp 136 thousand per month means this family is vulnerable when there are unexpected costs (health, home repairs, or additional school needs).

What should be done?

Evaluation of private vehicles

If it's only for the city's daily activities, you could consider using Subsidized fuel (Pertalite) or public transportation (MRT, KRL, LRT) to reduce the tax and gasoline burden.

Other alternatives: sell LCGC cars and using a motorcycle for daily needs leads to a drastic drop in tax burden and gasoline costs.

Adjust your monthly spending pattern

Minimize shopping at supermarkets/malls, shop more at traditional markets or local stores, which are sometimes cheaper and still healthy.

Set a personal spending limit (for example Rp500 thousand, not Rp1 million).

Prepare funds for your child's education.

Tuition fees may be small, but admission fees for high school or college are much larger.

Set aside at least Rp500 thousand–1 million per month for an education savings fund, even if you have to cut back on entertainment and mall trips.

Emergency fund and small investments

The remaining Rp 136 thousand is too little; it should be prioritized for emergency fund.

After tax and consumption burdens are deducted, aim to set aside at least 10% (Rp1 million) per month.

Entertainment is still allowed, but reduced.

Starting from Rp1 million for entertainment and Rp150 thousand for the cinema, it can be reduced to Rp500 thousand–Rp700 thousand.

The remaining funds can be redirected to savings.

Household Policy

With a salary of Rp10 million, This family actually falls into the middle-income category. in Indonesia. However, because taxes and consumption are high, finances feel tight.

The key is in transportation and shopping style.
If they can cut car and grocery costs, they could have savings of at least Rp1.5–2 million per month for their children's education and an emergency fund.

I hope this article will be useful for middle-income families; household spending must be calculated wisely.