Talent Wiki - Indonesia
Your quick guide on talent and labor compliance norms in Indonesia
Capital
Jakarta
Currency
Indonesian Rupiah (IDR)
Languages
Bahasa Indonesia (Official), Javanese, Sundanese
Payroll Frequency
Monthly
GDP per Capita
$4691.24
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
Local Universities
The top local universities in Indonesia are as follows:
Universitas Indonesia
RANKING
Local: 1
World : 398
Universitas Gadjah Mada
RANKING
Local: 2
World : 422
Universitas Brawijaya
RANKING
Local: 3
World : 661
Institut Teknologi Bandung
RANKING
Local: 4
World : 709
Universitas Airlangga
RANKING
Local: 5
World : 795
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 | 1542.76 USD |
| General Manager | 21,500,000 IDR | 1382.05 USD |
| Business Development Manager | 19,900,000 IDR | 1279.20 USD |
| Financial Analyst | 15,600,000 IDR | 1002.79 USD |
| Business Analyst | 15,500,000 IDR | 996.36 USD |
| Project Manager | 13,900,000 IDR | 893.51 USD |
Talent Sourcing Tips
Top Local Job Boards:
Indeed, Jobindo.com, JobStreet.com
Number of LinkedIn users:
22,172,000
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 (2023)
| Date | Name | Type |
| 1 Jan | New Year’s Day | Public Holiday |
| 22 Jan | Lunar New Year’s Day | Public Holiday |
| 23 Jan | Lunar New Year Joint Holiday | Joint Holiday |
| 18 Feb | Ascension of the Prophet Muhammad (Tentative Date) | Public Holiday |
| 22 Mar | Bali’s Day of Silence and Hindu New Year (Nyepi) | Public Holiday |
| 23 Mar | Joint Holiday for Bali’s Day of Silence and Hindu New Year (Nyepi) | Joint Holiday |
| 7 Apr | Good Friday | Public Holiday |
| 21-26 Apr | Idul Fitri Joint Holiday | Joint Holiday |
| 1 May | International Labor Day | Public Holiday |
| 18 May | Ascension Day of Jesus Christ | Public Holiday |
| 1 Jun | Pancasila Day | National holiday |
| 2 Jun | Joint Holiday before Waisak Day | Joint Holiday |
| 4 Jun | Waisak Day (Buddha’s Anniversary) | Public Holiday |
| 29 Jun | Idul Adha (Tentative Date) | Public Holiday |
| 19 Jul | Islamic New Year 1445 Hijri | Regular holiday |
| 17 Aug | Independence day | Regular holiday |
| 28 Sep | Birthday of Prophet Muhammad | Regular holiday |
| 25 Dec | Christmas Day | Regular holiday |
| 26 Dec | Christmas Day Holiday | Collective 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
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 IDR 4,641,854 per month.
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
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
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 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.
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.
