Indonesia
Make employment in Indonesia easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Indonesia, all in one easy-to-use platform.
- Capital City
Jakarta
- Currency
Indonesian rupiah (Rp, IDR)
- Languages
Indonesian
- Population size
267,670,543
- Remote-Owned Local Entity
Facts & Stats
- Capital City
Jakarta
- Currency
Indonesian rupiah (Rp, IDR)
- Languages
Indonesian
- Population size
267,670,543
- 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)
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.
Grow your team in Indonesia with Remote
Looking to employ workers in Indonesia? Companies hiring in Indonesia must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.
Remote can employ your team in Indonesia on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Indonesia team. You can also pay contractors now in Indonesia with Remote.
Risks of misclassification
Indonesia, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Indonesia may lead to fines and penalties for the offending company.
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.
Minimum Wage
Indonesian minimum wage rates are fixed at the provincial level and are reviewed annually. Currently, the minimum wage in Jakarta is IDR4,901,798.
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.
Onboarding Time
We can help you get a new employee started in Indonesia fast. The minimum onboarding time we need is only 15 working days.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.
16 Public holidays
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
Taxes in Indonesia
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Indonesia.
0.24% - 1.74%
Work accident insurance
3.7%
Old Age
0.3%
Death benefit contribution
2%
Pension contribution
4%
Health insurance
Types of leave
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.
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.