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Payroll and Benefits Guide Indonesia

Last updated: Feb 28, 2022

Currency
Indonesian Rupiah (IDR)
Employer Taxes
10.24% - 11.74%
Payroll Frequency
Monthly
Employee Costs
4%
Capital
Jakarta
Date Format
dd/mm/yyyy
Fiscal Year
1 January - 31 December
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Contribution

Employer Employer Payroll Contributions
0.24% – 1.74%
Work Accident (JKK)
3.70%
Old Age Benefit (JHT)
0.30%
Death/Life Insurance (JKM)
2.00%
Pension (JP)  (applied on salary up to 9,559,600 IDR Monthly)
4.00%
Health Insurance (BPJS) (maximum of 480,000 IDR)

*(not mandatory if the company offers a better health insurance)

10.24% – 11.74%
Total Employment Cost
Employee Employee Payroll Contributions
2.00%
Old Age
1.00%
Pension
1.00%
Health Insurance (maximum of 120,000 IDR)
4.00%
Total Employee Cost
Employee Income Tax (Monthly ETR)*
0%
Up to 5.4M IDR
0.25%
5.4M – 5.65M IDR
0.50%
5.65M – 5.95M IDR
0.75%
5.95M – 6.3M IDR
1.00%
6.3M – 6.75M IDR
1.25%
6.75M – 7.5M IDR
1.50%
7.5M – 8.55M IDR
1.75%
8.55M – 9.65M IDR
2.00%
9.65M – 10.05M IDR
2.25%
10.05M – 10.35M IDR
2.50%
10.35M – 10.7M IDR
3.00%
10.7M – 11.05M IDR
3.50%
11.05M – 11.6M IDR
4.00%
11.6M – 12.5M IDR
5.00%
12.5M – 13.75M IDR
6.00%
13.75M – 15.1M IDR
7.00%
15.1M – 16.95M IDR
8.00%
16.95M – 19.75M IDR
9.00%
19.75M – 24.15M IDR
10.00%
24.15M – 26.45M IDR
11.00%
26.45M – 28M IDR
12.00%
28M – 30.05M IDR
13.00%
30.05M – 32.4M IDR
14.00%
32.4M – 35.4M IDR
15.00%
35.4M – 39.1M IDR
16.00%
39.1M – 43.85M IDR
17.00%
43.85M – 47.8M IDR
18.00%
47.8M – 51.4M IDR
19.00% 51.4M – 56.3M IDR
20.00% 56.3M – 62.2M IDR
21.00% 62.2M – 68.6M IDR
22.00% 68.6M – 77.5M IDR
23.00% 77.5M – 89M IDR
24.00% 89M – 103M IDR
25.00% 103M – 125M IDR
26.00% 125M – 157M IDR
27.00% 157M – 206M IDR
28.00% 206M – 337M IDR
29.00% 337M – 454M IDR
30.00% 454M – 550M IDR
31.00% 550M -695M IDR
32.00% 695M – 910M IDR
33.00% 910M – 1400M IDR
34.00% 1400M IDR and above
20.00% Non residents are taxed at a flat rate.

*The income tax rates presented above are relevant for category A citizens ( single with zero or one dependent or married with no dependents) the tax rates might be lower depending on marital status and number of dependents.

*Every December, the annual tax is calculated and compared with the cumulative monthly tax payments submitted to the government.

Employer taxes

Highest
Lowest

Employee taxes

Highest
Lowest

Minimum Wage

General

The minimum wage requirement varies based on the local government regulations ranging from 2,036,947 IDR in Central Java to 5,067,381 IDR in DKI Jakarta.

Hourly wages for part-time workers

Indonesia has sought to reform its labor laws through the Omnibus Law and has since abolished the sectorial minimum wage through Government Regulation 36 of 2021 and introduced an hourly wage for part-time workers.

The formula for determining the hourly wage: Hourly wage = monthly wage/126

To calculate the daily wage:

Six working days/week: Daily wage = monthly wage/25

Five working days/week: Daily wage = monthly wage/21

The employer and employee are allowed to set their agreement, but the final salary should not be lower than the calculation using the aforementioned formulas.

MINIMUM WAGE (PER MONTH)

Highest
Lowest

Payroll

Payroll Cycle

The payroll cycle in Indonesia is generally monthly and is usually paid on the last working day as agreed within the employment contract.

13th Salary

In Indonesia, there is a mandatory religious holiday bonus called Tunjangan Hari Raya (THR), an additional one month’s salary payment made prior to the longest religious holiday (Hari Raya Idul Fitri for Muslim workers and Christmas for other faith workers). THR includes a base salary and fixed monthly allowance, but does not have to cover other payments such as bonuses. THR is prorated for employees who have not completed a full year of service.

Authority Payments

Authority Payment

Paid To

Due Date

Method

Payroll Tax

Indonesian Tax Office

10th of the following month

E-filing system provided by Indonesian Tax Office (ITO)

Social Security

Social security

15th of the following month

Health Tax

Health agency

10th of the current month – new joiners need to be registered by the 10th

Working Hours

General

The working hours are arranged as follows:

  • Employees with 6 work days a week- 7 hours a day, 40 hours a week.
  • Employees with 5 work days a week – 8 hours per day, 40 hours a week.

These working hours rules do not apply to certain businesses and are usually regulated with a ministerial decision.
On working days, an employer shall arrange a rest period during work for its employees of not less than half an hour after the employee has been working for no more than four consecutive hours.

Overtime

For overtime regulations under the EoR model please visit the EoR page. The general guidelines for overtime in Indonesia are as follows:

All work above the standard working week is to be paid as overtime and is regulated by the employment contract/collective agreements. The maximum number of overtime hours is 4 per day and 18 per week. Overtime worked during weekdays is paid at 150.00% of the regular hourly wage for the first overtime hour, increasing to 200.00% for every subsequent overtime hour.
Suppose employees work overtime on a weekly rest day or any public holiday scheduled for a weekly rest day while working a six-day workweek. In that case, the overtime pay is calculated as follows:

  • For the first to the 7th hour of overtime, the employee is entitled to 200.00% of the regular hourly wage
  • For the 8th hour of overtime, the employee is entitled to 300.00% of the regular hourly wage
  • For the 9th to 10th hour of overtime, the employee is entitled to 400.00% of the regular hourly wage

If employees work overtime on a weekly rest day when working a six-day work week, the overtime pay is calculated as follows:

  • For the first to the 5th hour of overtime, the employee is entitled to 200.00% of the regular hourly wage
  • For the 6th hour of overtime, the employee is entitled to 300.00% of the regular hourly wage
  • For the 7th to the 8th hour of overtime, the employee is entitled to 400.00% of the regular hourly wage

If employees work overtime on a weekly rest day or a public holiday working a five-day workweek, the overtime pay is calculated as follows:

  • For the first to the 8th hour of overtime, the employee is entitled to 200.00% of the regular hourly wage
  • For the 9th hour of overtime, the employee is entitled to 300.00% of the regular hourly wage
  • For the 10th to the 11th hour of overtime, the employee is entitled to 400.00% of the regular hourly wage

Leave

Annual Leave (vacation)

Paid leave in Indonesia is set in the employment contract as at least 12 days of paid annual leave per year after completing one full year of employment. Employees who have been working for six consecutive years for the same employer are entitled to one month of leave in the seventh year of service and one month of leave in the eighth year of service.

Public Holidays

Each year the government may decide if public holidays falling on weekends will be moved to a weekday or will be lost.

Date Day Holiday Notes
1 Jan 2024 Monday New Year 2024
8 Feb 2024 Thursday Isra Mi’raj
10 Feb 2024 Saturday Chinese New Year
11 Mar 2024 Monday Bali’s official day of Silence – Hindu New Year Federal Territory – Capital City
29 Mar 2024 Wednesday Good Friday
31 Mar 2024 Sunday Easter Sunday
10 Apr 2024 Wednesday Idul Fitri
11 Apr 2024 Thursday Idul Fitri
1 May 2024 Wednesday International Labour Day
9 May 2024 Saturday The Ascension of Jesus Christ
23 May 2024 Thursday Vesak 2567
1 Jun 2024 Saturday Five Principle Day
17 Jun 2024 Monday Idul Adha
7 Jul 2024 Sunday Islamic New Year
17 Aug 2024 Saturday Indonesian National Independence Day
16 Sep 2024 Wednesday Birthday of the Prophet Muhammad
25 Dec 2024 Wednesday Christmas Day

Sick Days

When employees are sick or injured, they are entitled to paid sick leave provided they show a medical confirmation of their ill health. Employees can also have long-term sick leave lasting for longer than one year. A doctor should recommend such leave in writing.

Payment to employees on prolonged sick leave is as follows:

  • 100.00% in the first four months paid by the employer
  • 75.00% in the fourth to eighth months paid by the employer
  • 50.00% in the eighth to twelfth months paid by the employer
  • 25.00% of wages from one year until termination, paid by the employer

Maternity Leave

Employees are entitled to three months of fully paid maternity leave. The maternity leave is paid at 100.00% of the regular salary rate of pay.

Paternity Leave

New fathers are entitled to two days’ leave for the birth of their child or a miscarriage.

Parental Leave

Employees are entitled to paid child leave in the following circumstances:

  • 2 days paid leave for the circumcision of the employee’s child
  • 2 days paid leave for the baptism of the employee’s child
  • 2 days paid leave for the marriage of the employee’s child
  • 2 days paid leave for the death of the employee’s child

Other Leave

Employees are entitled to up to two days of paid leave due to the death of their spouse, one day of paid leave for the death of their parents or parent-in-law, the death of their children, or the death of their children-in-law. If a member of the employee’s household dies, they shall be entitled to one day of paid leave.

Vacation Days
Public Holidays
Highest
Lowest

PAID MATERNITY LEAVE (DAYS)

Highest
Lowest

Termination

Termination Process

Before an employee can be terminated, the employer must make a genuine effort to avoid the termination by negotiating with the employee and/or the employee’s labor union to find an accommodation such as a change in working hours, improved working methods, or coaching.
If termination cannot be avoided, the employer must explain the reasons for termination clearly in writing to the employee and/or the employee’s labor union.
If the employee believes the termination is unjust, the decision can be challenged in the Labor Court, which will give the final ruling.
The reasons for which employees can be discharged from work are as follows:

  • The employee violates the employment agreement
  • The employee is imprisoned
  • The employee is ill for more than 12 months
  • The employee is absent from work for more than five days without a valid reason, provided he or she has been notified twice
  • The employee has reached retirement age

Not all reasons for employees’ dismissal should be related to their misbehavior. The employer can discharge employees for several business-related reasons:

  • There can be a change in the company’s status, its merger with another business, or the acquisition of its ownership
  • The employer becomes insolvent
  • The employer has suffered continuous losses for two years consecutively as proven by financial reports
  • The employer is closing the business permanently.

Notice Period

Notice periods within Indonesia are generally 30 days, although employers can specify longer notice periods within the employment contract.

Severance Pay

In Indonesia, severance pay is mandatory if applicable and is determined by the employee’s length of service:

  • Less than 1 year of employment – 1-month wage
  • 1 year or more, but fewer than two years – 2 months’ wage
  • 2 years or more but fewer than 3 years – 3 months wage
  • 3 years of more, but fewer than four years – 4 months’ wage
  • 4 years or more, but fewer than 5 – 5 months’ wage
  • 5 years or more, but fewer than 6 – 6 months’ wage
  • 6 years or more, but fewer than 7 – 7 months’ wage
  • 7 years or more, but fewer than 8 – 8 months’ wage
  • 8 years or more – 9 months’ wage

Probation Period

The probation period in Indonesia for permanent employees is generally set at three months.

Common Benefits

  • Meal allowance per month around IDR 100.000 – 190.000 (taxable)
  • Commuting expenses (from and to the office are around IDR 2.000.000 – 3.000.000 per month (taxable)
  • Gym membership is between IDR 300.000 – 500.000 per month (taxable)
  • Internet coverage is between IDR 200.000 – 500.000 per month (taxable)

VISA

VISA

The government of Indonesia provides visa exemptions to nationals of 169 countries, including the United States, Canada, Australia, and Singapore.
Previously, for a foreign employee to enter Indonesia for work, they would need an individual work permit (IMTA). This has now been replaced with a notification from the Ministry of Manpower. Once an employee or business has obtained a notification, they can apply for an Indonesian visa. Foreigners will be issued a Visa Telex (visa index 312), which allows them to work and travel to Indonesia.
There are two types of visas for foreign nationals who intend to live and work in Indonesia.
Izin Tinggal Terbatas or Electronic ITAS (e-ITAS) where employers need to apply for an ITAS on behalf of future employees. The ITAS grants employees the right to stay in Indonesia as well as open a bank account. They can also stay in the country and after three years, apply for a permanent residency. Before applying for the ITAS, the employee must also get a Visa Izin Tinggal Terbatas (VITAS) – an Indonesian limited-stay permit visa.
The Kartu Izin Tinggal Tetap (KITAP) is a visa an employee can also apply for which grants the employee a permanent residence permit (KITAP), but this is only available to people who have held an ITAS for three or more years.

VAT

General

The standard rate of VAT in Indonesia is 11.00% and the VAT will increase to 12% by 1 January 2025.

Stay up to date on payroll & employment law changes

Version History

February 4, 2024
Income tax rate have been updated
April 19, 2022
The standard rate of VAT in Indonesia increased to 11.00%
February 28, 2022
Payroll contributions and personal income tax rates have been updated.
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Questions & Answers

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Kim W.
Kim W.
2 years ago

Is Tunjangan Hari Raya payment paid to all types of workers?

Erez Greenberg
Erez Greenberg
2 years ago
Reply to  Kim W.

Hi Kim, Yes, Tunjangan Hari Raya payment must be paid to all employees whether they have become permanent employees, contract employees, or part-time employees.

Patsy Lee
Patsy Lee
10 months ago
Reply to  Erez Greenberg

May I ask if the THR received by employees, subjected to tax deduction?

Enny Shmurin
Admin
Enny Shmurin
5 days ago
Reply to  Patsy Lee

Yes, the same as salary.

Jared
Jared
2 years ago

What is the minimum number of days I have to allow an employee to take off consecutively using their annual leave?

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Jared

Hi, if your employee would like to use their annual consecutively, the minimum number of days you must approve is 6.

Lim N.
Lim N.
2 years ago

How do we do pro-rate annual leave for Indonesian employees who left the employer in the middle of the calendar year?

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Lim N.

Hi Lim, this would depend on how long the employee has been employed, however, you would need to calculate the monthly accrual amount and multiply it by the number of months completed.

Lim N.
Lim N.
2 years ago

Are there any criteria for a male employee to be entitled to paternity leave of 2 days? Must the employee work with the employer for a minimum of 3 months?

Anoop
Anoop
1 year ago

My father worked more than 3 years in indonesia as a machenical engineer later they passed away because of heartattack in company area. What is the compensation in this situation???

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Anoop

According to Article 166 of Law Number 13 of 2003 concerning Manpower (“Labor Law”), in the event that an employment relationship ends due to the death of an employee, the heirs will be paid an amount that is equal to twice the severance pay based on the years of service.

In addition to two times the severance pay, heirs are eligible for a one-time service payment, which consists of three months’ wages and compensation for entitlements that should have been received. This includes:

-Unused annual leave
-Some transportation costs
-Housing allowances and medical and health care allowances are calculated at 15% of severance pay and/or reward for years of service.
-The rest of the compensation is determined by individual work agreements, enterprise rules, and regulations, or collective agreements.

Kate
Kate
1 year ago

As a foreign company in Indonesia, how to find the reference from any local companies on monthly allowance for sales people

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Kate

Which allowances are you referring to?

Kitti
Kitti
1 year ago
Reply to  Erez Greenberg

Thank you for reply.
I meant
1. Petro
2. Car depreciation (in case employee owns car)
3. Car maintenance

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Kitti

There are no rules around petrol reimbursement etc – it is left to each company to decide their policy.

joy
joy
1 year ago

if the employee is working as seaman/offshore on rotational basis (1 month working, 1 month on leave) are they still entitled for 12 days of paid annual leave per year?

Enny Shmurin
Admin
Enny Shmurin
17 days ago
Reply to  joy

Hello, unfortunately, we’re unable to advise on this specific working set-up.

Vinod
Vinod
9 months ago

Hi Need Help! Does contribution to Pension Fund mandatory in *Indonesia*? If *Yes*, what is the *minimum percentage* contribution defined for *employer and employee*?

Enny Shmurin
Admin
Enny Shmurin
9 months ago
Reply to  Vinod

Hello. This information can be found on the Countrypedia which shows the mandatory pension contribution of 2% (with max IDR 191,192) from the ER and 1%  (with max IDR 95,596) from the EE.  

Tyler
Tyler
8 months ago

Are employers required by law to provide their employees payslips showing amount deducted for taxes, BPJS, and any reimbursement claims?

Enny Shmurin
Admin
Enny Shmurin
8 months ago
Reply to  Tyler

Hello, it is a standard that all of these items would be included on the employee’s pay slip.

Sharon
Sharon
3 months ago

How is compensation determined for an employee who passes away from natural causes while at home?

Last edited 3 months ago by Sharon
Enny Shmurin
Admin
Enny Shmurin
2 months ago
Reply to  Sharon

We recommend to contact directly the employer and communicating with the relevant Indonesian government agencies, such as BPJS Ketenagakerjaan and BPJS Kesehatan, can help clarify entitlements and procedures under such circumstances.

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Payroll and Benefits Guide
in Indonesia

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

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Public Holidays Calendar

Indonesia
Download:
CSV
PDF
ICS
Date Day Holiday Notes
1 Jan 2024 Monday New Year 2024
8 Feb 2024 Thursday Isra Mi’raj
10 Feb 2024 Saturday Chinese New Year
11 Mar 2024 Monday Bali’s official day of Silence – Hindu New Year Federal Territory – Capital City
29 Mar 2024 Wednesday Good Friday
31 Mar 2024 Sunday Easter Sunday
10 Apr 2024 Wednesday Idul Fitri
11 Apr 2024 Thursday Idul Fitri
1 May 2024 Wednesday International Labour Day
9 May 2024 Saturday The Ascension of Jesus Christ
23 May 2024 Thursday Vesak 2567
1 Jun 2024 Saturday Five Principle Day
17 Jun 2024 Monday Idul Adha
7 Jul 2024 Sunday Islamic New Year
17 Aug 2024 Saturday Indonesian National Independence Day
16 Sep 2024 Wednesday Birthday of the Prophet Muhammad
25 Dec 2024 Wednesday Christmas Day