Hire employees in Indonesia, hassle-free

Quick Overview

Currency: Indonesian Rupiah (IDR)

Capital: Jakarta

Official language: Bahasa Indonesia

Payroll Cycle: Monthly

Statutory Holidays

Paid Time Off

In Indonesia, employees are entitled to 12 days of paid leave after one year of employment.

Public Holidays

Indonesia celebrates 15 national public holidays

• New Year's Day
• Good Friday
• Labor Day
• Independence Day
• Christmas Day
• Chinese New Year
• Isra Mi'raj
• Bali Hindu New Year
• Hari Raya Idul Fitri
• Ascension Day of Jesus Christ
• Waisak Day
• Pancasila Day
• Idul Adha
• Islamic New Year
• Prophet Muhammad's Birthday

General Taxation

Individual Income Tax

The individual income tax depends on many variables, such as marital status, level of income, etc. The average ranges from 5% to 30%

Employer Cost

Approximately, 9.75% of employee salary.

Additional information

Employment Contract Details

Employment contracts must be written and in Bahasa using the Latin alphabet. If an employment agreement is in both Indonesian and a foreign language, the Indonesian version prevails if there are differences in interpretation.

Probation Period

The minimum probation period is 3 months and the maximum is 2 years.

Minimum Wage Requirements

Minimum wages varies from region to region, it ranges from IDR 2,213,000 to IDR 4,280,000

Maximum working hours and overtime

The working hours are arranged as follows:

• Employees with 6 workdays a week work 7 hours a day and 40 hours a week.
• Employees with 5 workdays a week work 8 hours per day and 40 hours a week.

These rules for working hours do not apply to certain businesses and are usually regulated with a Ministerial decision.

Bonus and expense payments

Employers are required to pay the Tunjangan Hari Raya (THR) or religious allowance. The THR is paid to workers who have been working for longer than 3 months. Workers who have been working for a consecutive 12-month period are entitled to a minimum THR amount of one month's salary.

Parental Leave

• Maternity leave: employees are entitled to take 3 months of fully paid maternity leave. 1.5 months should be taken prior to the birth and 1.5 months post-natal.
• Paternity Leave: employees are entitled to 2 days' paid paternity leave.

Sick Leave

While a set number of sick days don't exist in Indonesia, the employer can reduce an employee's salary based on the time they've been out. The employer, not the government, covers sick pay. The structure for sick leave is as follows:

• For the first 4 months, an employee gets 100% of their salary
• After 4 months, their pay is reduced by 25%
• An employer can terminate employment after 12 months of sick leave

Termination requirements for employees in

Rules concerning severance pay differ based on reasons for the dismissal/employment termination. Employers can't dismiss an employee at will. The employer will need to file a lawsuit unless a mutual agreement is made with the employee, if the dismissal is not due to the employee's fault (dismissal without cause), the employee is entitled to two times the severance pay amount plus the standard service appreciation pay and compensation.

Notice Period

There's no notice of termination under Indonesian labor law. However, common practice is to provide 1 month's notice.

Employees can resign with 30 days of notice.