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Indonesia Employment Guide

Your quick guide on talent and labor compliance norms in Indonesia




Indonesian Rupiah (IDR)


Bahasa Indonesia (Official), Javanese, Sundanese

Payroll Frequency


GDP per Capita


Employer Tax

10.24% - 11.74%

Talent Overview

Indonesia is the largest economy in Southeast Asia. It is also one of the world’s most populous countries, ranking at 4th place. This has led to the country being one of the world’s biggest consumer markets (in terms of population size) and being one of the largest in terms of purchasing power parity.

Major economic hubs:

Jakarta, Bandung, Central Java (Surabaya, Semarang, Yogyakarta)

Skills in demand:

Software Developer, Data Scientist, Full stack Engineer

Map 26

Local Universities

The top local universities in Indonesia are as follows:

Uni2 36

Universitas Indonesia


Local: 1

World : 420

Uni1 36

Universitas Gadjah Mada


Local: 2

World : 616

Uni3 37

Universitas Brawijaya


Local: 3

World : 702

Uni 4 Indo

Institut Teknologi Bandung


Local: 4

World : 813

Uni4 36

Universitas Airlangga


Local: 5

World : 920

Salary Data

Some of the common jobs in Indonesia along with their salary are listed below:

Job Title Average Monthly Salary (IDR) Average Monthly Salary (USD)
Financial Manager 24,000,000 IDR 1,596 USD
General Manager 21,500,000 IDR 1,429 USD
Business Development Manager 19,900,000 IDR 1,323 USD
Financial Analyst 15,600,000 IDR 1,037 USD
Business Analyst 15,500,000 IDR 1,030 USD
Project Manager 13,900,000 IDR 924 USD


Talentsource 71

Talent Sourcing Tips

Top Local Job Boards:


Number of LinkedIn users:


Top Recruitment Agencies:

Michael Page Indonesia, Alliance Recruitment Agency, Robert Walters Indonesia

Employing in Indonesia

The vast labor market in Indonesia gives businesses a lot of opportunities for expanding in the country. However, when onboarding employees from Indonesia, it is vital to gain familiarity with the country’s employment regulations. The following sections will guide you through the labor process in the country.

Employee Contract

Employment contracts use the Indonesian language using Latin alphabets. Dual language contracts can be prepared but one must be written in the Indonesian Language.

Probation period

Employees in Indonesia are given a probationary period of up to 3 months

Public and Provincial Holidays

Date Name Type
1 Jan New Year’s Day Public Holiday
8 Feb Ascension of the Prophet Muhammad (Tentative Date) Public Holiday
9 Feb Lunar New Year Joint Holiday Public Holiday
10 Feb Lunar New Year’s Day Public Holiday
8 Mar Maha Shivaratri Hindu Holiday
11 Mar Bali’s Day of Silence and Hindu New Year (Nyepi) Public Holiday
12 Mar Joint Holiday for Bali’s Day of Silence and Hindu New Year (Nyepi) Public Holiday
25 Mar Holi Hindu Holiday
29 Mar Good Friday Public Holiday
31 Mar Easter Sunday Public Holiday
8 Apr Idul Fitri Joint Holiday Public Holiday
9 Apr Idul Fitri Joint Holiday Public Holiday
10 Apr Idul Fitri Public Holiday
11 Apr Idul Fitri Joint Holiday Public Holiday
12 Apr Idul Fitri Joint Holiday Public Holiday
15 Apr Idul Fitri Joint Holiday Public Holiday
1 May International Labor Day Public Holiday
9 May Ascension Day of Jesus Christ Public Holiday
10 May Joint Holiday for Ascension Day Public Holiday
23 May Waisak Day (Buddha’s Anniversary) Public Holiday
24 May Joint Holiday for Waisak Day Public Holiday
1 Jun Pancasila Day National holiday
17 Jun Idul Adha (Tentative Date) Public Holiday
18 Jun Joint Holiday for Idul Adha Public Holiday
7 Jul Muharram / Islamic New Year (Tentative Date) Public Holiday
17 Aug Indonesian Independence Day Public Holiday
19 Aug Raksha Bandhan Hindu Holiday
26 Aug Janmashtami Hindu Holiday
7 Sep Ganesh Chaturthi Hindu Holiday
15 Sep Maulid Nabi Muhammad (The Prophet Muhammad’s Birthday) (Tentative Date) Public Holiday
3 Oct Navaratri Hindu Holiday
12 Oct Dussehra Hindu Holiday
25 Dec Christmas Day Public Holiday
26 Dec Boxing Day Public Holiday

Employee Leaves

Type of Leave Time Period Mandatory
Annual Leave 12 days  Yes
Sick Leave 0 days As per the employment contract
Maternity Leave 6 months Yes



Payroll 1

Payroll Cycle

Salaries in Indonesia can be paid weekly, bi-weekly, or monthly depending on the employment contract.

Payroll 2

Minimum Wage

The minimum Wage in Indonesia is IDR 4,641,854 per month.

Payroll 3

Overtime Pay

Employees are not permitted to work more than 3  hours a day and 14 extra hours per week. Below are the rates for overtime work:

  • Weekdays, 1st hour – 150% of the hourly salary
  • Weekdays, subsequent hours – 200% of the hourly salary


13th Month Pay

The 13th-month pay is mandatory for Indonesian employees.

Employee Benefits

Indonesian employees may be given the following supplemental benefits on top of their leave benefits, social security and yearly bonus:

  • Health Insurance
  • Pension Plan
  • Meal Allowance
  • Transportation Allowance
  • THR payment


Employer Payroll Tax

Type of Contribution Contribution Rate
Occupational accident insurance 0.24% – 1.74%
Life insurance 0.30%
Old age benefits 3.70%
Pension plan 2.00%
Health Insurance 4.00%

Employee Payroll Tax

Type of Contribution Contribution Rate
Old age benefits 2%
Pension plan 1%
Health Insurance 1%

Employee Income Tax

Taxable Income Tax Rate
0 – 60 million IDR 5%
60 million IDR – 250 million IDR 15%
250 million IDR – 500 million IDR 25%
500 million IDR – 5 billion IDR 30%
5 billion IDR and above 35%

Severance pay is taxed separately in Indonesia, as given below:

Taxable Income Tax Rate
0 – 50 million IDR 0%
50 million IDR – 100 million IDR 5%
1000 million IDR – 500 million IDR 15%
500 million IDR and above 25%


The standard VAT rate has traditionally been 11% in Indonesia.

Offboarding & Termination

If an employer wants to terminate its employees, it has to obtain approval from the Industrial Relations Court (IRC) by filing a lawsuit, or if they signed a Mutual Termination Agreement, then the Mutual Termination Agreement should be registered with the IRC.

The Labor Law prohibits an employer from dismissing an employee for the following reasons:

  • The employee joins in matrimony;
  • The employee is absent due to illness for less than 12 months consecutively;
  • The employee performs a role in a trade union.

Probationary employees are given up to 30 days of the notice period. On the other hand, employees after probation are given up to 3 months.

Depending on the reasons for employment termination, employers need to pay standard severance, long service pay, compensation pay, and/or separation pay

Duration of employment Severance pay Long service pay
Less than 1 year 1 month None
More than 1 year, less than 2 years 2 months None
More than 2 years, less than 3 years 3 months None
More than 3 years, less than 4 years 4 months 2 months
More than 4 years, less than 5 years 5 months 2 months
More than 5 year , less than 6 years 6 months 2 months
More than 6 years, less than 7 years 7 months 3 months
More than 7 years, less than 8 years 8 months 3 months
More than 8 years, less than 9 years 9 months 3 months
More than 9 years, less than 12 years 9 months 4 months
More than 12 years, less than 15 years 9 months 5 months
More than 15 years, less than 18 years 9 months 6 months
More than 18 years, less than 21 years 9 months 7 months
More than 21 years, less than 24 years 9 months 8 months
More than 24 years 9 months 10 months


Visa and Immigration

An Indonesian work permit and work visa is required for foreign employees working in the country. The validity of these documents can be 3 months to a year and may be renewable.

Visa 72
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Minimum Wage

Overtime Pay

Visa & Immigration