Talent Wiki - Indonesia

Your quick guide on talent and labor compliance norms in Indonesia

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Capital

Jakarta

Currency

Indonesian Rupiah (IDR)

Languages

Bahasa Indonesia (Official), Javanese, Sundanese

Payroll Frequency

Weekly, fortnightly or monthly

GDP per Capita

$4,700

Employer Tax

10.24% - 11.74%

Supplementary Guide for Employment and Expansion in Indonesia

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

Local Universities

The top local universities in Indonesia are as follows:

Universitas Gadjah Mada

RANKING

Indonesia : 1

World : 331

Universitas Indonesia

RANKING

Indonesia : 2

World : 360

Universitas Brawijaya

RANKING

Indonesia : 3

World : 488

Universitas Airlangga

RANKING

Indonesia : 4

World : 533

Universitas Pendidikan Indonesia

RANKING

Indonesia : 5

World : 688

Salary Data

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

No.	Job Title	Salary Range (in IDR)	Salary Range (in USD)
1	Accounting Manager	9,220,000 - 27,800,000	630.18 - 1,900.12
2	Financial Manager	11,500,000 -37,700,000	786.02 - 2,576.78
3	Business Development Manager	9,170,000 - 31,700,000	626.77 - 2,166.68
4	Developer/Programmer	5,870,000 - 20,300,000	401.21 - 1,387.50
5	IT Manager	6,320,000 - 19,900,000	431.97 - 1,360.16

Talent Sourcing Tips

Top Local Job Boards:

Indeed, Jobindo.com, JobStreet.com

Number of LinkedIn users:

21,072,000

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
Date	Name	Type
1 Jan	New Year's Day	Public Holiday
1 Feb	Lunar New Year's Day	Public Holiday
28 Feb	Ascension of the Prophet Muhammad	Public Holiday
3 Mar	Bali's Day of Silence and Hindu New Year (Nyepi)	Public Holiday
18 Mar	Holi	Hindu Holiday
15 Apr	Good Friday	Public Holiday
29 Apr	Idul Fitri Joint Holiday	Joint Holiday
1 May	International Labor Day	Public Holiday
2 May	Idul Fitri	Public Holiday
3 May	Idul Fitri Holiday	Public Holiday
4 May	Idul Fitri Joint Holiday	Joint Holiday
5 May	Idul Fitri Joint Holiday	Joint Holiday
6 May	Idul Fitri Joint Holiday	Joint Holiday
16 May	Waisak Day (Buddha's Anniversary)	Public Holiday
26 May	Ascension Day of Jesus Christ	Public Holiday
1 Jun	Pancasila Day	National holiday
9 Jul	Idul Adha (Tentative Date)	Public Holiday
30 Jul	Muharram / Islamic New Year (Tentative Date)	Public Holiday
17 Aug	Indonesian Independence Day	Public Holiday
8 Oct	Maulid Nabi Muhammad (The Prophet Muhammad's Birthday) (Tentative Date)	Public Holiday
25 Dec	Christmas 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	12 weeks	Yes

Payroll

Payroll Cycle

Salaries in Indonesia can be paid weekly, fortnightly, or monthly depending on employment contract.

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Minimum Wage

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

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Overtime Pay

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

Weekdays, 1st hour - 150% of hourly salary
Weekdays, subsequent - 200% of hourly salary

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Health Examination Clause

Bonus

13th Month Pay

The 13th month pay is mandatory for Indonesian employees.

Recognized religious holidays are the following:

~Eid-il-Fitri for Muslims
~Christmas for Catholics and Protestants
~Nyepi for Hindus
~Vesak for Buddhists
~Chinese New Year for Confucianism

An employee working for more than 12 months is entitled to 1 month’s salary. Otherwise, the THR is pro-rated according to months of service (service period/12) x 1 month’s salary.

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
~Employee loans
~THR payment

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Taxes

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	5%
IDR 60 million - IDR 250 million	15%
IDR 250 million - IDR 500 million	25%
IDR 500 million - IDR 5 billion	30%
IDR 5 billion and above	35%

Severance pay is taxed separately in Indonesia.

VAT

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

Offboarding & Termination

Termination Process

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.

Notice Period

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

Severance Pay

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	Wage paid (months)
< 1 year	1 month
< 2 years	2 months
< 3 years	3 months
< 4 years	4 months
< 5 years	5 months
< 6 years	6 months
< 7 years	7 months
< 8 years	8 months
≥ 8 years	9 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.

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Talent Wiki - Indonesia

Supplementary Guide for Employment and Expansion in Indonesia