Powering Payroll, Compliance & Workforce Management in Indonesia

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Indonesia at a Glance

Whether you're hiring your first employee or expanding an existing team, understanding the local employment landscape is essential. From visa requirements and statutory benefits to payroll taxes and regulatory oversight, this section provides a practical overview of what employers need to know to stay compliant and operate effectively in 

Indonesia
Work Permits & Visas
  • VITAS: Temporary stay visa, converted to KITAS (Limited Stay Permit) on arrival.
  • RPTKA: Employer authorization to hire foreign workers.
  • e-ITAS: Electronic limited stay permit; eligible for permanent residency (KITAP) after 3 years.
  • Payroll
    • Payroll Frequency: Commonly monthly, typically paid at month-end.
    • Income Components: Base salary, allowances, overtime, bonuses, and benefits in kind.
    • Deductions: Income tax, BPJS social security, and health insurance contributions.
    • Employer Contributions: 3.7% for old-age benefits, 0.24%–1.74% for work accident insurance, 0.3% for death benefits, 4% for health care.
    • Employee Contributions: 2% for old-age benefits, 1% for health care.
    • Minimum Wage: Set regionally; varies by province/city.
    Employment Contracts
    • Contracts may be permanent or fixed-term (up to 5 years, including extensions).
    • Probation Period: Up to 3 months for permanent contracts (not permitted for fixed-term).
    • Working Hours: 40 per week — either 7 hours × 6 days or 8 hours × 5 days. Overtime = 1.5x–2x base rate.
    • Termination: Notice requirements vary; generally 14 days’ written notice.
    • Severance: Calculated based on tenure, service pay, and compensation for rights.
    Employee Benefits
    • Annual Leave: Minimum 12 working days after 12 months’ service.
    • Sick Leave: Paid per medical certification; extended illness may result in graduated pay reductions after 4 months.
    • Maternity Leave: 3 months (1.5 before birth, 1.5 after) with full pay.
    • Paternity Leave: 2 days paid.
    • Social Security: BPJS covers pensions, accidents, health care, and death benefits.
    • Religious Holiday Allowance (THR): One month’s salary paid before major religious holiday.
    Tax Overview
    • Tax Residency: Resident if in Indonesia ≥183 days in 12 months or present with intent to stay.
    • Tax Year: Jan 1 – Dec 31.
    • Progressive rates from 5% to 35% based on annual taxable income.
    • Worldwide income taxed for residents; non-residents taxed on Indonesia-sourced income.
    Personal Income Tax
    Indonesia — Personal Income Tax Rates
    Taxable Income (IDR/year) Rate of Tax
    Up to 60,000,0005%
    60,000,001 – 250,000,00015%
    250,000,001 – 500,000,00025%
    500,000,001 – 5,000,000,00030%
    Above 5,000,000,00035%

    Residents are taxed on worldwide income; non-residents on Indonesian-sourced income only.

    Full Country Guide

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    Indonesia

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    Compliance

    Stay ahead of legal changes. We ensure your payroll and employment practices remain fully compliant with

    Indonesia

    's laws

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    Indonesia