Remote’s guide to employing in Indonesia.
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.
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.
267,670,543 (est. 2018)
Ease of doing business
Cost of living index
VAT - standard rate
GDP - real growth rate
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.
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.
|Saturday, January 1, 2022||New Year|
|Tuesday, February 1, 2022||Chinese / Lunar New Year|
|Monday, February 28, 2022||Isra Mi'raj Prophet Muhammad|
|Thursday, March 3, 2022||Day of Silence Saka New Year|
|Friday, April 15, 2022||Good Friday|
|Sunday, May 1, 2022||International Labor Day|
|Monday, May 2, 2022||Eid al-Fitr 1442 H|
|Tuesday, May 3, 2022||Eid al-Fitr 1442 H|
|Monday, May 16, 2022||Vesak Day|
|Thursday, May 26, 2022||Ascension Day of Jesus Christ|
|Wednesday, June 1, 2022||Pancasila Day|
|Saturday, July 9, 2022||Eid al-Adha 1442 H|
|Saturday, July 30, 2022||New Hijri Year 1443 H|
|Wednesday, August 17, 2022||Indonesia Independence Day|
|Saturday, October 8, 2022||Birthday of Prophet Muhammad|
|Sunday, December 25, 2022||Christmas Day|
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.
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.
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:
In order to access specific information about our benefits packages in Indonesia, start onboarding your first employee with Remote today.
Learn how employment taxes 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
2% - Old Age
1% - Pension
1% - Health Insurance
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)
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.
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:
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.
Female employees are entitled to three months of paid maternity leave, starting six weeks before delivery.
Fathers can take two paid days off work after their partner’s delivery.
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.
There is no notice stipulated notice period but employers are generally expected to provide 30-days advance notice before terminating an employee.
Employees are entitled to severance pay that’s proportional to their tenure with an employer as defined below:
Probationary periods can only be set for employees on indefinite-term contracts and cannot exceed three months.