Hire employees and contractors in Indonesia

Remote’s guide to employing in Indonesia.

  • Capital city

    Jakarta

  • Currency

    Indonesian rupiah
    (Rp, IDR)

  • Population size

    267,670,543
    (est. 2018)

  • Languages spoken

    Indonesian

  • Availability

    Remote-Owned Local Entity

    We own our own entity in the countries where we operate to shield your company from risk and provide you and your employees with the signature Remote experience.

Facts & Stats

Officially the Republic of Indonesia, Indonesia is a conglomerate of 17,000 islands, and is simultaneously the world’s 4th most populous nation and Southeast Asia’s most powerful economy, with a GDP valued at over $3.5 trillion.

Home to over 1,300 ethnic groups and 700 languages, Indonesia hosts one of the world’s most ethnically diverse population, its second-most biologically diverse, and a history of record economic growth over the past two decades.

  • Capital city

    Jakarta

  • Currency

    Indonesian rupiah
    (Rp, IDR)

  • Languages spoken

    Indonesian

  • Population size

    267,670,543 (est. 2018)

  • Ease of doing business

    Easy

  • Cost of living index

    37.44 (2021)

  • Payroll frequency

    Monthly

  • VAT - standard rate

    10%

  • GDP - real growth rate

    5.0 (2019)

Grow your team in Indonesia with Remote

Remote currently offers contractor payment and management services in Indonesia. We are busy building our own entity in the country to provide you with best possible employment solutions for your employees.

Remote’s global employment solution makes it easy for your company to employ workers in Indonesia quickly, efficiently, and in full compliance with all applicable labor laws. We take on the responsibility and legal risks of international employment so you can focus on hiring great talent and growing your business.

Risks
of misclassification

Indonesia, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.

Employing in Indonesia

Indonesia’s Labor Law of 2003 is the principal labor regulation that defines provisions for employee protections and workers’ rights at the federal level which are applicable to Indonesia’s workforce of 4.2 million.

Employees in Indonesia enjoy protections against discrimination based on age, religion, gender expression, and race.

Common questions that could come up during the hiring process include the minimum wage, overtime rates, and guaranteed paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Indonesia.

Public holidays

Date
Holiday Name
Saturday, January 1, 2022New Year
Tuesday, February 1, 2022Chinese / Lunar New Year
Monday, February 28, 2022Isra Mi'raj Prophet Muhammad
Thursday, March 3, 2022Day of Silence Saka New Year
Friday, April 15, 2022Good Friday
Sunday, May 1, 2022International Labor Day 
Monday, May 2, 2022Eid al-Fitr 1442 H
Tuesday, May 3, 2022Eid al-Fitr 1442 H
Monday, May 16, 2022Vesak Day
Thursday, May 26, 2022Ascension Day of Jesus Christ
Wednesday, June 1, 2022Pancasila Day
Saturday, July 9, 2022Eid al-Adha 1442 H
Saturday, July 30, 2022New Hijri Year 1443 H
Wednesday, August 17, 2022Indonesia Independence Day
Saturday, October 8, 2022Birthday of Prophet Muhammad
Sunday, December 25, 2022Christmas Day

Minimum Wage

Indonesian minimum wage rates are fixed at the provincial level and are reviewed annually. Currently, the minimum wage ranges from IDR 1,704,608 ($117.65) to IDR 4,276,349 ($295.15) per month in Jakarta, the capital city.

Payroll Cycle

For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.

Competitive benefits package in Indonesia

At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).

Our benefits packages in Indonesia are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:

  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Mental Health Support
  • Pension or 401(K)
  • Life and Disability Insurance

In order to access specific information about our benefits packages in Indonesia, start onboarding your first employee with Remote today.

Taxes in Indonesia

Learn how employment taxes affect your payroll and your employees’ paychecks in Indonesia.

  • Employer

    • 0.24% - 1.74% - Work accident insurance

    • 3.7% - Old Age

    • 0.3% - Death benefit contribution

    • 2% - Pension contribution

    • 4% - Health insurance

  • Employee

    • 2% - Old Age

    • 1% - Pension

    • 1% - Health Insurance

  • Personal income tax rates

    • 5% - Up to IDR 50M ($3450.55)

    • 15% - 50M – 250M ($3450.55 - $17252.72)

    • 25% - 250M – 500M ($17252.72 - $34505.45)

    • 30% - Over 500M (Over $34505.45)

Types of leave

Paid time off

Employees who have worked for an employer for at least 12 months consecutively are entitled to 12 days of paid annual leave. Employers are obligated to respect any provisions pertaining to leave entitlement stipulated in an employee’s contract or negotiated under a collective bargaining agreement.

Public holidays

Employees are entitled to 15 public holidays off annually and must be compensated if required to work on a holiday. Employees who’re expected to a work on a public holiday will have their compensation structured as follows:

  • 1st – 7th hour: 200% hourly wages
  • 8th hour: 300% hourly wages
  • 9th & 10th hour: 400% hourly wages

Sick leave

Indonesian labor laws offer essentially unlimited sick leave that extends until an employee is fully recovered or the term of the employment contract elapses. Over the course of an employee’s illness, they’re entitled to 100% of their wages for the first four months, 50% of their wages for the next four months, and 25% of their normal wages until the employee recovers.

Maternity leave

Female employees are entitled to three months of paid maternity leave, starting six weeks before delivery.

Paternity/Parental leave

Fathers can take two paid days off work after their partner’s delivery.

Other leave

  • Bereavement leave: employees are entitled to two days of paid leave for the death of any 1st or 2nd-degree relative or one day in the event of a household member’s death.
  • Religious observance: parents can request two days of paid leave to get their children circumcised or baptized.
  • Marriage leave: Employees can take three days off work to attend to their marriage rites, or two, if the employee’s child is getting married.
  • Adoption: adoptive parents can exercise the same leave entitlements as natural parents, i.e., three months paid leave for female employees and two days of paid leave for the father.

Employment termination

Termination process

Indonesian labor law is unique in that it places the onus on employers to go the extra mile to avoid terminating an employee by negotiating to offer better working conditions, coaching, etc.

That aside, employee contracts can be terminated if a just cause is established, such as dishonesty, negligence, fraud, work-related offenses, sustained illness over the course of 12 months, or business contingencies like redundancy or insolvency.

Notice period

There is no notice stipulated notice period but employers are generally expected to provide 30-days advance notice before terminating an employee.

Severance pay

Employees are entitled to severance pay that’s proportional to their tenure with an employer as defined below:

  • 1 months wages: Up to 1 year of employment
  • 2 months wages: Up to 1 year, but less than 2 years of employment
  • 3 months wages: Up to 2 years, but less than 3 years of employment
  • 4 months wages: Up to 3 years, but less than 4 years of employment
  • 5 months wages: Up to 4 years, but less than 5 years of employment
  • 6 months wages: Up to 5 years, but less than 6 years of employment
  • 7 months wages: Up to 6 years, but less than 7 years of employment
  • 8 months wages: Up to 7 years, but less than 8 years of employment
  • 9 months wages: 8 or more years of employment

Probation periods

Probationary periods can only be set for employees on indefinite-term contracts and cannot exceed three months.

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