Expand your global workforce in Indonesia
Your guide to the employment landscape, working customs and local labor laws in Indonesia
Capital
Jakarta
Currency
Indonesian Rupiah (IDR)
Languages
Bahasa Indonesia (Official), Javanese, Sundanese
GDP per Capita
$5,388.34
Employer Tax
10.24% - 11.74%
Payroll Frequency
Monthly
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
Indonesia
Top local universities in Indonesia
Universitas Indonesia
RANKING
Local: 1
World : 420
Universitas Gadjah Mada
RANKING
Local: 2
World : 616
Universitas Brawijaya
RANKING
Local: 3
World : 702
Institut Teknologi Bandung
RANKING
Local: 4
World : 813
Universitas Airlangga
RANKING
Local: 5
World : 920
Top Local Job Boards:
Indeed, Jobindo.com, JobStreet.com
Number of LinkedIn users:
24,740,000
Top Recruitment Agencies:
Michael Page Indonesia, Alliance Recruitment Agency, Robert Walters Indonesia
Where to find talent
Top Local Job Boards:
Top Local Job Boards
Number of LinkedIn users:
Number of LinkedIn users
Top Recruitment Agencies:
Top Recruitment Agencies:
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 |
Employ in 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 |
| January 1 | New Year’s Day | National Holiday |
| January 27 | Ascension of the Prophet Muhammad | National Holiday |
| January 28 | Chinese New Year Joint Holiday | National Holiday |
| January 29 | Chinese New Year’s Day | National Holiday |
| March 28 | Joint Holiday for Bali’s Day of Silence and Hindu New Year (Nyepi) | National Holiday |
| March 29 | Bali’s Day of Silence and Hindu New Year (Nyepi) | National Holiday |
| March 31 | Idul Fitri | National Holiday |
| April 1 | Idul Fitri Holiday | National Holiday |
| April 2 | Idul Fitri Joint Holiday | National Holiday |
| April 3 | Idul Fitri Joint Holiday | National Holiday |
| April 4 | Idul Fitri Joint Holiday | National Holiday |
| April 7 | Idul Fitri Joint Holiday | National Holiday |
| April 18 | Good Friday | National Holiday |
| April 20 | Easter Sunday | National Holiday |
| May 1 | International Labor Day | National Holiday |
| May 12 | Waisak Day (Buddha’s Anniversary) | National Holiday |
| May 13 | Joint Holiday for Waisak Day | National Holiday |
| May 29 | Ascension Day of Jesus Christ | National Holiday |
| May 30 | Joint Holiday after Ascension Day | National Holiday |
| June 1 | Pancasila Day | National Holiday |
| June 6 | Idul Adha | National Holiday |
| June 9 | Joint Holiday for Idul Adha | National Holiday |
| June 27 | Muharram / Islamic New Year | National Holiday |
| August 17 | Indonesian Independence Day | National Holiday |
| September 5 | Maulid Nabi Muhammad (The Prophet Muhammad’s Birthday) | National Holiday |
| December 25 | Christmas Day | National Holiday |
| December 26 | Boxing Day | National 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 | 3-6 months | Yes |
Leave Compliance
Payroll in Indonesia
Payroll cycle
Salaries in Indonesia can be paid weekly, bi-weekly, or monthly depending on the employment contract.
Minimum wage
The minimum Wage in Indonesia is defined province-wise.
Read more
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
How taxes work
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 | 3.00% |
| Health Insurance | 4.00% |
Employee Payroll Tax
| Type of Contribution | Contribution Rate |
| Old age benefits | 2% |
| Pension plan | 2% |
| 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% |
VAT
The standard VAT rate has traditionally been 11% in Indonesia.
Bonus
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
Employee offboarding
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.
Your employment toolkit for Indonesia
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Overtime Pay
Minimum Wage
| Province | Monthly Minimum Wage (Indonesian Rupiah, IDR) |
| Aceh | 3,685,615.68 |
| Bali | 2,890,060.68 |
| Banten | 2,905,119.78 |
| Bengkulu | 2,670,039.14 |
| Gorontalo | 3,221,731.50 |
| Jakarta (Special Capital Region of Jakarta) | 5,396,760.77 |
| Jambi | 3,234,533.87 |
| Jawa Barat (West Java) | 2,191,136.51 |
| Jawa Tengah (Central Java) | 2,169,348.55 |
| Jawa Timur (East Java) | 2,305,985.18 |
| Kalimantan Barat (West Kalimantan) | 2,878,286.04 |
| Kalimantan Selatan (South Kalimantan) | 3,496,194.78 |
| Kalimantan Tengah (Central Kalimantan) | 3,473,621.04 |
| Kalimantan Timur (East Kalimantan) | 3,579,313.77 |
| Kalimantan Utara (North Kalimantan) | 3,580,160.45 |
| Kepulauan Bangka Belitung (Bangka Belitung Islands) | 3,876,600 |
| Kepulauan Riau (Riau Islands) | 3,623,653.98 |
| Lampung | 2,893,068.24 |
| Maluku (Moluccas) | 3,141,699.95 |
| Maluku Utara (North Maluku) | 3,408,000 |
| Nusa Tenggara Barat (West Nusa Tenggara) | 2,602,931.36 |
| Nusa Tenggara Timur (East Nusa Tenggara) | 2,328,969.69 |
| Papua | 4,285,847.55 |
| Papua Barat (West Papua) | 3,613,545 |
| Papua Tengah (Central Papua) | 4,285,847.55 |
| Papua Pegunungan (Highland Papua) | 4,285,847.55 |
| Papua Selatan (South Papua) | 4,285,847.55 |
| Papua Barat Daya (Southwest Papua) | 4,285,847.55 |
| Riau | 3,508,775.63 |
| Sulawesi Barat (West Sulawesi) | 3,104,430.27 |
| Sulawesi Selatan (South Sulawesi) | 3,657,525.24 |
| Sulawesi Tengah (Central Sulawesi) | 2,914,583.37 |
| Sulawesi Tenggara (Southeast Sulawesi) | 3,073,487.76 |
| Sulawesi Utara (North Sulawesi) | 3,775,425 |
| Sumatera Barat (West Sumatra) | 2,994,246.44 |
| Sumatera Selatan (South Sumatra) | 3,681,570.81 |
| Sumatera Utara (North Sumatra) | 2,992,559.48 |
| Yogyakarta | 2,264,080.31 |
Overtime Pay
Visa and Immigration