Payroll Cycle
Minumum Wage
Overtime Pay
Visa Immigration

Talent Wiki - Indonesia

Your quick guide on talent and labor compliance norms in Indonesia
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Indonesian Rupiah (IDR)
Bahasa Indonesia (Official), Javanese, Sundanese
Payroll Frequency
Weekly, fortnightly or monthly
GDP per Capita
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


Indonesia : 1

World : 331

Universitas Indonesia


Indonesia : 2

World : 360

Universitas Brawijaya


Indonesia : 3

World : 488

Universitas Airlangga


Indonesia : 4

World : 533

Universitas Pendidikan Indonesia


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:


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
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 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


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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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.


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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