* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.

Capital City

Indonesian Rupiah (Rp)


WIB, WIT and WITA (GMT +7/8/9)

Employment Cost

10.24% – 11.74%

Annual Leave

12 days

In-demand Specialties*
Programming, Tech Support, Data Entry

The Ultimate Guide to Hiring Employees in Indonesia

Simplify hiring employees in by partnering with Playroll. Our Employer of Record (EOR) handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance. While you maintain control of day-to-day tasks and responsibilities.


Key Considerations Before Hiring In Indonesia

Employing in Indonesia requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. Grow your team in Indonesia with our Employer of Record solution, ensuring streamlined, compliant business expansion with no entity.

Playroll allows you to hire employee's in Indonesia quickly, easily and we even automate tax document collection, benefits, payroll and more.

Good To Know

Indonesia's abundant workforce, ranked fourth globally in population, offers a diverse talent pool conducive to remote team building.

The country's youthful demographics and tech-savvy workforce make it an appealing destination for businesses seeking dynamic professionals.

Proficiency in English among Indonesians further enhances its attractiveness for companies targeting English-speaking markets.

Moreover, Indonesia's cultural values emphasizing teamwork and respect for authority contribute to a positive work environment conducive to collaboration.


Fundamental Aspects of Employment in Indonesia

In Indonesia, employment is governed by Law No. 13 of 2003 on Manpower. Contracts must be in Indonesian using the Latin alphabet, with the Indonesian version being legally binding. Employment contracts should outline:

  • Employee details
  • Position and type of work
  • Salary details
  • Contract period

Probationary Period in Indonesia

Indonesian labor laws do not mandate probationary periods, but employers have the discretion to incorporate them into their hiring practices to evaluate employee suitability, commonly lasting around 3 months.

Working hours in Indonesia

In Indonesia, standard working hours are either 7 hours per day, totaling 40 hours per week for six-day workers, or eight hours per day, amounting to 40 hours per week for five-day workers.

Overtime in Indonesia


Navigating Key Aspects of Payroll in Indonesia

Indonesia has a robust and complex payroll and tax system, and as an employer, it pays to understand payroll process basics.

1 January - 31 December

Fiscal Year in Indonesia

1 January - 31 December is the 12-month accounting period that businesses in Indonesia use for financial and tax reporting purposes.

Payroll Cycle in Indonesia

The payroll cycle in Indonesia is usually monthly, with employees being paid on or before the last working day of each calendar month.
1,118.62 IDR p/h

Minimum Wage in Indonesia

The minimum wage for employees in Indonesia is typically 1,118.62 IDR per hour, amounting to ~1,798,979 IDR per month for a typical 40 hour work week.

Minimum wages and salaries in Indonesia

The minimum wage per month in Indonesia is determined by local government regulations and exhibits a range from 1,798,979 IDR in Central Java to 4,416,186 IDR in DKI Jakarta.

Bonus Payments in Indonesia

In Indonesia, employees are entitled to the mandatory Tunjangan Hari Raya (THR) bonus, equivalent to one month's salary, ahead of significant religious holidays (Hari Raya Idul Fitri for Muslims, Christmas for others). THR comprises the base salary and a fixed monthly allowance, adjusted for those with less than a year of service. Additional bonuses are not mandatory.

Comprehensive Overview of Employment Taxes in Indonesia

Understanding the tax obligations for both employers and employees is crucial when operating in Indonesia's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Indonesia.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 10.24% – 11.74% on top of the employee salary in Indonesia.

Tax Rate Tax Type

Employee Payroll Tax Contributions

In Indonesia, the typical estimation for employee payroll contributions cost is around 4%.

Tax Rate Tax Type

Individual Payroll Tax Contributions

In Indonesia, employment taxes operate under the Pay As You Earn system. Individual income tax rates in the country vary from 5% to 30%, and the calculation follows a progressive rate structure as follows:

Tax Rate Income Bracket

Pension in Indonesia

Pensions in Indonesia are administered through the BPJS Manpower Social Security Program, which consists of Old Age Insurance (mandatory contributions from both employers and employees) and Pension Insurance (where only employers contribute). Participation in these programs is mandatory under Indonesian employment law to ensure financial support for retirement.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Indonesia tailored to your needs.

Easily navigate payroll, taxes and contributions with Playroll.

Grow your distributed workforce today!

Understanding the Protocols for Termination of Employment in Indonesia

When it comes to terminating employment in Indonesia, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process

In Indonesia, prior to termination, employers are required to engage in negotiations with employees or labor unions to explore alternatives. If termination becomes necessary, clear written explanations for the reasons must be provided. Valid grounds for employee dismissal in Indonesia include:

  • Violation of the employment agreement
  • Imprisonment of the employee
  • Extended illness of the employee for more than 12 months
  • Unjustified absence from work for more than five days, after being notified twice

Notice Period

In Indonesia, there is no legally mandated minimum notice period. However, customary notice periods for employer-initiated terminations are as follows:

  • During the probation period: 7 days
  • Minimum notice period: 30 days
  • For employee-initiated terminations, the minimum notice period is also 30 days.

Severance Pay

Severance pay is mandatory, if applicable, and is determined based on the employee's length of service as follows:

  • Less than 1 year of employment: 1-month wage
  • 1 year or more but less than two years: 2 months' wage
  • 2 years or more but less than 3 years: 3 months' wage
  • 3 years or more but less than four years: 4 months' wage
  • 4 years or more but less than 5: 5 months' wage
  • 5 years or more but less than 6: 6 months' wage
  • 6 years or more but less than 7: 7 months' wage
  • 7 years or more but less than 8: 8 months' wage
  • 8 years or more: 9 months' wage

Annual Leave Entitlements and Company Policies in Indonesia

The annual leave entitlement in Indonesia is 12 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays in Indonesia

Annually, the government in Indonesia has the authority to determine whether public holidays that coincide with weekends will be rescheduled to a weekday or forfeited altogether.

Holiday Date

Paid Time Off in Indonesia

Maternity Leave in Indonesia

Paternity Leave in Indonesia

Sick Leave in Indonesia

Parental Leave In Indonesia

Indonesia's Benefits Built Into Playroll

Competitive benefits package in Indonesia

Playroll is committed to providing tailored, competitive benefits packages that are designed not only to attract but also retain top talent worldwide. Our global team of benefits experts build custom local packages to ensure your employees in Indonesia's needs are met. Typically our packages contain some or all of the following benefits.

Health Insurance
Pension or 401k
Life and Disability Insurance
Vision Insurance
Dental Insurance
Discounts & Perks

Playroll Supplementary Benefits For Employment In Indonesia

Make your benefits package in Indonesia a talent magnet with Playroll's local plans. We offer benefits that are compliant, comprehensive, and flexible — all at competitive rates. Speak with our local territory experts to explore the localized benefits we can offer you, while you scale your team.

  • Health Insurance
  • Pension
  • Death Benefit
  • Workman's Compensation
  • Background Checks
  • IT Equipment Sourcing

Statutory benefits for employment in Indonesia

Playroll allows you to provide localized benefits for employees in Indonesia within minutes. All in one manageable online dashboard. If you'd like specific information about our benefits packages in Indonesia create an account or contact our global expansion team, today.

Playroll Benefit Services

Playroll's Expertise in Facilitating Work Visas for Indonesia

At Playroll we're all about empowering employees to work anywhere, making mobility possible for global teams. We sponsor visas and hire the employee for you, so you don’t have to worry about payroll, taxes, and more.

It's important to note, visa support can be complicated. There are many variables that affect whether sponsorship is possible, including one’s nationality, education, marital status, and the immigration policy for the country in question.

Unfortunately, this means we can’t support visas everywhere - with that being said, we handle the entire visa process in-house, and dig into your situation to give you an overview of what to expect if we're able to help with visa sponsorship in Indonesia.

Playroll Immigration Support

Integrated EOR Platform

Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.

Accelerated Immigration Timeline

By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.

Hire in 50+ Countries

Accelerated Immigration Timeline

Acquiring a visa without an entity has never been easier, leverage Playroll's global coverage to sponsor and hire employees.

Playroll Visa Services

Hiring International Employees is Complex.

Playroll makes it easy!