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Indonesian Rupiah is the official currency of Indonesia. Its currency symbol is Rp, IDR.
Estimated at 10% – 11% of employee’s salary
Emerald Technology can onboard employees within 48 hours.
Indonesian is the primary language, it is spoken by over 94% of the population.
The population of Indonesia is 276.4 Million (based on World bank numbers as of 2021).
Salaries are paid monthly. Employers are required to pay a 13th month salary.
To start growing your team in Indonesia, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary.
This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.
Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.
Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.
With a population of over 260 million people, Indonesia is the fourth most populous country in the world. The country has one of the fastest growing economies in Asia, with
an average growth rate of 5% per year.
The business climate in Indonesia is stable and favourable for foreign investors. The country has a well-developed infrastructure, including an efficient financial system and
efficient telecommunications which make it easy to conduct business activities.
However, conducting business in Indonesia poses some challenges, including language barriers and a lack of skilled workers.
Indonesia is one of the most popular places in the world to work remotely. The country has a strong economy with low unemployment, good internet access, and a friendly
culture. It also offers great benefits for remote workers, including a low cost of living and good health insurance.
Start growing your remote workforce now
| Health Insurance: | 4% |
| Social Security (Death in service, Long-term disability, Medical benefits, Worker's compensation insurance, maternity and paternity leave, pension and unemployment): | JHT - 3.7%, JP - 2%, JKK - 0.24%, JK - 0.03% |
Death In Service.
Long-Term Disability.
Short-Term Sickness.
Healthcare.
Worker's Compensation Insurance.
Maternity and Paternity.
Pension.
Unemployment.
Private Healthcare.
Contracts in Indonesia must include:
Contracts in Indonesia must be in writing in the local language and can be bilingual. The contract must include: KTP (Personal ID) NPWP (Tax ID) KK (Kartu Keluarga/ Family Card) BPJS Ketenagakerjaan & Kesehatan Photo Latest CV Bachelor Degree Certificate Local IDR bank account Reference letter
A probation period allows both an employer and employee to evaluate the employment match. The probation period can be implemented up to a maximum of three months.
Emerald Technology can onboard employees in Indonesia within 48 hours.
Employers are required to contribute 4% of employees’ salary to the Heath Care programme, with employees contributing 1%. For these contributions, salary is capped at IDR 8M per month.
The social security in Indonesia covers the below:
Under Indonesian law, businesses must give three month’s paid maternity leave to pregnant employees, at least half of which must be taken after the birth.
Fathers in Indonesia working in the public sector are eligible for one month’s paid paternity leave, while those in the private sector are granted two days.
Employees are entitled to 100% of their salary for their first four months of sickness. After this, their pay is reduced by 25% and an employer may terminate an employee who has been sick for 12 months. Sick pay is covered by the employer, not the government.
As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:
All documents included in the contract.
When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:
| Termination: | An employer can unilaterally dismiss an employee during their probation period or on the basis of disciplinary dismissal, performance, bankruptcy, acquisition or mergers, or inability to work on medical grounds. Outside of this, if an employer chooses to dismiss an employee, it must be with just cause, such as by mutual agreement, expiration of the contract, or on completion of assignment. There is no required notice period for employers in Indonesia. Employees may resign with 30 days’ notice. |
If an employee is made redundant, they are entitled to a payment based on years of continuous service.
| Severance: | Severance pay varies depending on the reason for dismissal: Standard severance pay: Employees that have worked less than a year are entitled to one month’s wage. Employees that have worked for more than one year are entitled to one month’s salary for each year of service (capped at nine months). Long Service Pay: Employees are entitled to two months’ salary after the first three years of service, followed by an additional one month’s salary for every three years of service thereafter (capped at 10 months for 24 years’ service). |
Full-time employees in Indonesia are entitled to a statutory minimum of 12 calendar days’ annual leave per annum, once they have completed 12 months’ continuous service.
Indonesia’s minimum wage is established by provincial and district authorities, which vary by province, district and sector. The Indonesian monthly minimum wage varies from IDR 1.1M in Central Java to 3.1M in Jakarta.
The standard working week is 40 hours per week, split across either six days (seven hours per day) or five days (eight hours per day). If employers require overtime, they must pay 1.5x the employee’s regular wages for the first hour and 2x their regular wages for every hour after. The maximum overtime permissible is three hours per day or 14 hours per week. Senior level positions are excluded from overtime regulations.
Salary payments in Indonesia are usually paid monthly and on the last working day, or another date stated in the employment contract.
There is a statutory requirement to pay employees a 12th month salary which is called THR – a religious holiday pay to reflect the religious diversity in the country.
The individual income tax ranges from 5% – 30%.
Similar to other countries, Indonesia has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.
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