Indonesia, located between the Indian Ocean and the Pacific Ocean along the equator between Asia and Australia, is divided into 34 provinces. The country consists of 17,508 islands, and is the world’s fourth-most-populous country. It is also the world’s third-largest democracy and the world’s largest archipelagic state.

Some of the industries that have helped maintain the steady growth of Indonesia’s economy include; the fintech industry, the petrochemical industry, the infrastructure industry, the agriculture industry, and the healthcare sector.

 

*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Indonesia.

Hauptstadt :
Jakarta
Währung :
Indonesian Rupiah (Rp, IDR)
Gesprochene Sprachen :
Indonesian
Einwohnerzahl :
273.5 million (2020 est.)
Mindestlohn :
Varies across regions
Lebenshaltungskostenindex :
$$ (97 of 139 countries)
Payroll Frequency :
Bi-weekly/Monthly
Mehrwertsteuernormalsatz :
11%
reales BIP-Wachstum :
3.7% (2021 est.)

Statutory Holidays

The holidays mentioned below are valid for the year 2022.

 

Date
Holiday Name
Extra Information
January 1
New Year’s Day
February 1
Chinese New Year
Movable
February 28
Isra Mi'raj
Movable
March 3
Bali Hindu New year
Movable
April 15
Good Friday
Movable
April 29
Lebaran Holiday
Movable
May 1
Labor Day
May 2-3
Hari Raya Puasa
Movable
May 4-6
Cuti Bersama
May 16
Weisak Day
Movable
June 1
Pancasila Day
July 9
Idul Adha
Movable
July 30
Islamic New Year
Movable
August 17
Independence Day
October 28
Prophet Muhammad's Birthday
Movable
December 25
Christmas Day

Contract Sharing Time


The approximate time for sharing the contract with an employee in Indonesia is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.

NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.

What You Need To Know


  • Fixed employment contracts cannot be established for any job for more than five years.
  • Workers employed on an indefinite basis are generally entitled to severance, long-service pay, and compensation of rights on termination of employment, but eligibility for long-service pay is subject to a minimum of three years of service.
  • Work performed on public holidays attracts payment of up to four times the usual wage.

Labor Conditions


Working Hours

The standard working hours are arranged either as seven hours per day and 40 hours per week for six working days in a week or eight hours per day and 40 hours per week for five working days in a week. Employees working six days per week are entitled to one day of rest per week whilst those who work five days per week get two days of rest.

 

Overtime

Any work performed beyond seven hours per day and 40 hours per week in a six-day work week or eight hours per day and 40 hours per week in a five-day workweek is considered overtime work.   

Overtime must be paid at 1.5 times the normal hourly rate for the first hour and two times the normal rate for the subsequent hours. Overtime is calculated based on an employee’s monthly wage. The wage per one hour is equal to 1/173  of the employee’s monthly wage.

 

Probation Period

Working agreements for an unspecified period can require a probation period of three months at the maximum.

Termination Notice Period
Termination StatusNotice Period
During ProbationNo later than 7 days 
Termination by the employer post probationNo later than 14 days 
Employee ResignationNo later than 30 days

 

 

Leave / Time Off

Annual Leave

Paid leave in Indonesia is set in the employment contract with at least 12 days of paid annual leave per year after completing one full year of employment. 

Sick Leave

An employee who is not able to perform work due to illness is entitled to paid leave in the below manner:

 

Duration of SicknessWage Entitlement
The first four months100% of wages
5th to 8th months75% of wages
9th to 12th month50% of wages
Subsequent months25% of wages

Parental Leave

Maternity Leave

Female employees are entitled to take three months’ fully paid maternity leave, of which one and half months are taken prior to the birth, and the other one and half months are taken post-natal, or a period as stated in the medical statement issued by a doctor.

 

Paternity Leave

An employee whose wife gives birth to a baby or suffers a miscarriage is entitled to two days of paid leave from work.

Other Types of Paid Leave

Reason for LeaveLeave Duration
Employees’ wedding3 days
Wedding of their child2 days
Circumcision of their son2 days
Baptism of their child2 days
Their wife giving birth or suffering a miscarriage2 days
The death of their parents, in-laws, spouse, children, or son or daughter in law2 days
The death of any family member who stayed in the same household1 day
Menstruation leave2 days

Unpaid Leave

There is no statutory provision for unpaid leave.

Statutory Benefits

All employees in Indonesia, including expatriates who work for a minimum of six months in the country, must participate in and make contributions to the National Social Security System (Sistem Jaminan Sosial Nasional  or „SJSN“), which is administered by the Social Security Administration Board (Badan Penyelenggara Jaminan Sosial  or „BPJS“). 

An overview of employer contributions toward statutory benefits is presented in the table below.

 

BenefitsEmployer Contribution
Working accident protection0.24 to 1.74%
Life insurance0.3%
Old age saving3.7%
Healthcare4%
Pension2%

 

Health Insurance

Employers contribute 3% toward mandatory health insurance.

Indonesia has compulsory universal healthcare which is funded through payroll taxes and the general budget. Employers are required to enroll their employees in this system.

Other Insurances

Accident Insurance

The contribution is fully paid by employers and ranges from 0.24% to 1.74% of wages, depending on the level of risk and protection.

Employment injury insurance (Jamsostek occupational injuryJKK) covers accidents at work, occupational diseases arising out of employment, and travel accidents that occur while traveling to and from work following the usual route.

Unemployment Insurance

To be eligible for unemployment benefits, participants must have participated in the government’s social security programs, the Social Security Administrator for Health (BPJS Kesehatan) for healthcare, and the Workers Social Security (BPJS Ketenagakerjaan) for pensions.

0.46% of the monthly wages is paid to the Job Loss Scheme program, in which 0.22% is contributed by the government and the remaining 0.24% from the employer. Importantly, the employer’s contribution is taken from the re-composition of the life insurance and work compensation components of the pension program.

Public Pension

There are two types of mandatory pension premia in the BPJS manpower social security package:

  • Firstly, there is the Old Age Insurance facility, for which both the company and the employee are mandated to deposit a monthly contribution; and
  • Secondly, there is the Pension Insurance facility, for which only the company makes a monthly contribution.

Employers pay 3.7% for old-age insurance and 2% for the pension insurance.

Other Statutory Benefits

Life Insurance

Employers contribute 0.3% towards life insurance.

Upon the death of the participant, their heirs can claim the benefits.

Disclaimer

The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

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