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Indonesia is a growing Southeast Asian labour market with a large workforce, competitive labour costs, and structured employment rules under the Omnibus Law and related regulations. Employers must follow wage standards, BPJS social security rules, and contract norms.
This guide summarizes everything you need to know before hiring or paying employees in Indonesia.
Currency
Languages
Minimum wage
Standard Working Hours
Probation period
Paid leave
Employment Cost
Hiring in IndonesiaWhen hiring in Indonesia, ensure compliance with provincial minimum wages, BPJS enrollments, employment contracts, and statutory leave. Explore salaries, benefits, payroll taxes, and legal requirements before hiring.
Learn more
Employment ContractsContracts can be permanent or fixed-term. All contracts must be in writing and specify:
Notice Periods:
Typically 30 days, depending on contract and termination type.
Termination of Employment:
Permitted for:
Severance rules apply under the Omnibus Law.
Learn more
Employee BenefitsMandatory Benefits
Leave Policies
Annual Leave:
12 days after 1 year of service
Sick Leave:
Paid leave based on medical certification
Parental Leave:
Healthcare
Taxes in IndonesiaIndonesia uses progressive income tax rates for residents.
Personal Income Tax:
5%–35% progressive
Employer Responsibilities:
Payroll in IndonesiaBase Salary
Must meet or exceed provincial minimum wage (UMR/UMP).
Payment Schedule
Monthly, typically end of month.
Additional Payments
Taxes and Social Security
BPJS Kesehatan:
Health insurance (employer & employee contribute)
BPJS Ketenagakerjaan:
Covers:
Taxes and Social SecurityBPJS Kesehatan:
Health insurance (employer & employee contribute)
BPJS Ketenagakerjaan:
Covers:
Payroll ReportingMonthly:
Annual:
Legal RegulationsIndonesia's labour rules are structured under:
Total Employment Cost:
Employer contributions add ~10–15% above gross salary.
Work Permits & Visas for Indonesia
Foreign workers require:
Employer of Record in IndonesiaEOR services in Indonesia enable companies to hire employees legally without establishing a local entity, while ensuring full compliance with Indonesian labor regulations. This allows businesses to enter the Indonesian market faster while reducing legal and administrative complexity.
Your EOR handles:
PEO Services in IndonesiaPEO services in Indonesia support companies with a local entity by managing HR operations and compliance, allowing employers to focus on business growth while maintaining adherence to local labor laws.
PEO services assist with:
| COUNTRY | TAXES / COSTS | NETPAY |
|---|---|---|
|
$52,600 | $430,820 |
|
$52,600 | $430,820 |
An Employer of Record (EOR) manages employment contracts, payroll processing, BPJS registrations, and local compliance.
Employees are paid monthly in IDR through payroll, with mandatory PPh 21 income tax deductions.
Yes, the Religious Holiday Allowance (THR) is legally required in Indonesia.
Minimum wages are set at the provincial (and sometimes city/regency) level and must be reviewed annually.
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