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In Indonesia, employee leave entitlements remain a frequent source of confusion for both employees and employers. Differences in interpretation around leave types, duration, eligibility, and paid status often lead to internal disputes, compliance gaps, and even legal risks for companies.
As Indonesia enters 2026, the workforce landscape is becoming more complex, driven by hybrid work models, flexible contracts, and growing employee awareness of labor rights.
In this context, understanding employee leave can no longer be separated from broader compliance obligations, including statutory contribution in Indonesia, which are closely tied to employment status and benefits. Without a clear and up-to-date reference, employers risk misapplying leave policies, while employees may unknowingly forfeit rights guaranteed by law.
Employee leave falls into two main categories: mandatory leave, which is regulated by the government, and optional leave, which can be an extra perk for employees.
In Indonesia, Law No. 13 of 2003 on Manpower states that every employee is entitled to one day of leave per month, which can accumulate to 12 days per year.
Beyond this basic entitlement, companies may have their own policies regarding leave. For example, some companies only allow employees to take leave after they’ve worked for a full year. While this isn’t required by law, it can influence whether candidates choose to join your company.
Policies on unused leave also vary. Some companies allow leave to roll over from year to year, while others cancel unused leave at the end of the year. Some even offer a cash payout for unused leave. How you handle these policies can affect your ability to attract and retain top talent.
Long service leave is a type of extended leave given to employees who have shown loyalty to the company, usually after six consecutive years of service.
The specifics of long service leave depend on each company’s policies and are usually outlined in the employment contract. If it’s not mentioned, employees can check with HR to find out more.
In the seventh and eighth years, employees may take one month of leave each year. However, this leave must be used within six months of being granted, or it will be forfeited.
Because health is unpredictable, offering sick leave is a must, especially when an employee provides a doctor’s note. While sick leave isn’t regulated by the government, it’s a standard practice that most companies follow.
Female employees who are expecting or have recently given birth are entitled to 1.5 months of leave before their due date and 1.5 months after delivery, according to Law No. 13 of 2003, Article 82. This leave must be supported by a doctor’s certificate.
Emergency leave is given for urgent personal matters, especially those involving family. This type of leave is outlined in Article 93, Paragraph 4 of Law No. 13 of 2003.
Examples include:
Collective leave is usually given to all employees and is mandated by the government.
According to a circular from the Minister of Manpower and Transmigration No. SE. 302/MEN/SJ-HK/XII/2010, collective leave is part of the employee’s annual leave entitlement.
Under Indonesian labor law (Law No. 13 of 2003 on Manpower, Article 81), female employees are entitled to menstrual leave on the first and second day of menstruation if they experience pain and are unable to work.
This leave must be paid in full and cannot be deducted from annual leave. The implementation is typically based on company policy or employment agreements, but employers are legally required to respect this right when the condition is met.
There are two optional leave that employee can take:
Sabbatical leave is a longer break that employees can use for research, skill refreshment, or just to rest and travel.
Some companies, like The Smart Local, one of Singapore’s largest lifestyle portals, offer sabbatical leave to give their employees time off to recharge.
Companies with high-demand periods or major events often compensate employees with additional leave, separate from their annual leave.
For example, after launching a new product or during big sales events like 12.12 (National Shopping Day), companies like Lazada offer extra leave days to their employees as a way to thank them for the hard work.
Offering leave is no longer seen as a loss; many companies now encourage their employees to take time off. Some even reward top performers with extra leave.
But why is this so important? Here are some of the benefits that offering leave can bring to your company.
Taking time off and resting can significantly boost employee productivity.
A survey by The Corporate Executive found that employees who feel well-rested work 21% harder than those who work non-stop without breaks. This highlights the importance of rest if you want your employees to perform at their best.
Employee healthcare costs are often covered by the company through health insurance claims. In the long run, employees who balance work and rest are less likely to get sick, which can help lower the healthcare costs your company has to cover.
Employees can tell whether their company cares about them as people, not just as workers.
If you provide leave that matches the hard work they put in, they’ll feel valued and will be more likely to appreciate and stay loyal to your company. This can also lead to positive word-of-mouth, as employees share their positive experiences with others. Remember, a company’s reputation isn’t just about its products or services, it’s also about how it treats its employees.
Glints TalentHub is our complete talent solution that covers all aspects of talent acquisition, management, and development. Our team can help you access the extensive talent pool across Southeast Asia and build great teams quickly and affordably. Simply schedule a call with us and our dedicated experts will be thrilled to guide you in your journey towards building a borderless team.
This article is brought to you by Glints TalentHub. Leading companies are actively building their borderless teams in Southeast Asia, Taiwan, and beyond. However, the prospect of going borderless can be daunting due to complex regulations and cultural ambiguities. With Glints TalentHub, you’ll have a dedicated team of in-market legal, HR, and talent experts by your side at every step of the way.
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