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Speed up your global expansion! Expand smartly in 150+ countries with the #1 rated EOR globally.
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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
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:
Local: 1
World : 420
Local: 2
World : 616
Local: 3
World : 702
Local: 4
World : 813
Local: 5
World : 920
Indeed, Jobindo.com, JobStreet.com
24,740,000
Michael Page Indonesia, Alliance Recruitment Agency, Robert Walters Indonesia
Top Local Job Boards:
Top Local Job Boards
Number of LinkedIn users:
Number of LinkedIn users
Top Recruitment Agencies:
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 |
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.
Employment contracts use the Indonesian language using Latin alphabets. Dual language contracts can be prepared but one must be written in the Indonesian Language.
Employees in Indonesia are given a probationary period of up to 3 months
| Date | Name | Type |
| 1 Jan | New Year’s Day | Public Holiday |
| 8 Feb | Ascension of the Prophet Muhammad (Tentative Date) | Public Holiday |
| 9 Feb | Lunar New Year Joint Holiday | Public Holiday |
| 10 Feb | Lunar New Year’s Day | Public Holiday |
| 8 Mar | Maha Shivaratri | Hindu Holiday |
| 11 Mar | Bali’s Day of Silence and Hindu New Year (Nyepi) | Public Holiday |
| 12 Mar | Joint Holiday for Bali’s Day of Silence and Hindu New Year (Nyepi) | Public Holiday |
| 25 Mar | Holi | Hindu Holiday |
| 29 Mar | Good Friday | Public Holiday |
| 31 Mar | Easter Sunday | Public Holiday |
| 8 Apr | Idul Fitri Joint Holiday | Public Holiday |
| 9 Apr | Idul Fitri Joint Holiday | Public Holiday |
| 10 Apr | Idul Fitri | Public Holiday |
| 11 Apr | Idul Fitri Joint Holiday | Public Holiday |
| 12 Apr | Idul Fitri Joint Holiday | Public Holiday |
| 15 Apr | Idul Fitri Joint Holiday | Public Holiday |
| 1 May | International Labor Day | Public Holiday |
| 9 May | Ascension Day of Jesus Christ | Public Holiday |
| 10 May | Joint Holiday for Ascension Day | Public Holiday |
| 23 May | Waisak Day (Buddha’s Anniversary) | Public Holiday |
| 24 May | Joint Holiday for Waisak Day | Public Holiday |
| 1 Jun | Pancasila Day | National holiday |
| 17 Jun | Idul Adha (Tentative Date) | Public Holiday |
| 18 Jun | Joint Holiday for Idul Adha | Public Holiday |
| 7 Jul | Muharram / Islamic New Year (Tentative Date) | Public Holiday |
| 17 Aug | Indonesian Independence Day | Public Holiday |
| 19 Aug | Raksha Bandhan | Hindu Holiday |
| 26 Aug | Janmashtami | Hindu Holiday |
| 7 Sep | Ganesh Chaturthi | Hindu Holiday |
| 15 Sep | Maulid Nabi Muhammad (The Prophet Muhammad’s Birthday) (Tentative Date) | Public Holiday |
| 3 Oct | Navaratri | Hindu Holiday |
| 12 Oct | Dussehra | Hindu Holiday |
| 25 Dec | Christmas Day | Public Holiday |
| 26 Dec | Boxing Day | Public Holiday |
| 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 |
Leave Compliance
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:
| 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% |
| Type of Contribution | Contribution Rate |
| Old age benefits | 2% |
| Pension plan | 1% |
| Health Insurance | 1% |
| 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% |
The standard VAT rate has traditionally been 11% in Indonesia.
The 13th-month pay is mandatory for Indonesian employees.
Indonesian employees may be given the following supplemental benefits on top of their leave benefits, social security and yearly bonus:
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:
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 |
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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Overtime Pay
Minimum Wage
Overtime Pay
Visa and Immigration
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Indonesia
