Indonesia Employment Guide

Your essential guide to the workforce, working customs, and labor rules in Indonesia

Access essential insights to manage employment smoothly, stay compliant, and build a thriving team

Capital

Jakarta

Time Zone

Jakarta UTC+7

Currency

Rupiah (IDR)

languages

Bahasa Indonesia, English and others

Payroll

Monthly

Employers Tax

10.24% - 11.74%

Employer of Record (EOR)

Professional Employer Organization (PEO)

Employment Law

Payroll & Tax

Compensation & Benefits

Talent Landscape

Indonesia is the 4th most populous country in the world and boasts the largest digital economy in Southeast Asia. This means there are over 260 million young, high-potential talent that are digital natives. The country also has the most unicorns in the region. The sheer volume of talent, coupled with a thriving tech ecosystem, is ushering in a next-gen workforce who are equipping themselves with a variety of soft and hard skills to keep pace with market trends.

In-Demand Roles

Full Stack Developer

Backend Developer

Frontend Developer

Sales Manager

Web Developer

Working Culture

Respectful social hierarchy

Indonesians usually don’t address their superiors by their first name; instead, they add titles in front of their name when talking to them. It is polite to call senior colleagues ‘bapak/pak’ (sir) or ‘ibu/bu’ (ma'am); for example, Indonesians might address a middle-aged male senior manager as Pak [name]. Peers can be called ‘mas’, ‘mbak’, or ‘kak’.

Non-confrontational communication style

The work culture in Indonesia is peaceful with little conflict. Employees avoid talking back to their bosses, preferring to follow directions and keep them happy. Criticism is usually kept private and low-key to protect the pride of others.

Prioritize manners and gratitude

Indonesians maintain good manners at the workplace, believing a supportive, harmonious workplace is key to productivity. They also never forget their ‘thank yous’ — it’s good manners to express gratitude after receiving help from a colleague.

Strong religious influence

As a Muslim-majority country, a culture of modesty and gratitude is prevalent in the Indonesian archipelago. This influences business attire as well as office norms. Employers should provide concessions when it comes to Friday prayers, Ramadan working hours, and Eid bonus payouts.

Average Salary

Job Position

Avg Monthly Salary (USD)

*3-5 Years of Experiences

Tech Engineering

Software Engineer

$1,000

AI Engineer

$700

Business Development & Sales

Business Development Officer

$750

Sales Manager

$580

Product

Product Manager

$675

Data

Data Analyst

$600

Data Scientist

$650

Marketing & PR

Marketing Associate

$380

Marketing Manager

$650

Public Relations Manager

$515

Corporate Services

Human Resources Generalist

$380

Accountant

$380

Administrative Officer

$290

Job Position

Avg Monthly Salary (USD)

*3-5 Years of Experiences

Tech Engineering

Software Engineer

$1,000

AI Engineer

$700

Business Development & Sales

Business Development Officer

$750

Sales Manager

$580

Job Position

Avg Monthly Salary (USD)

*3-5 Years of Experiences

Product

Product Manager

$675

Data

Data Analyst

$600

Data Scientist

$650

Job Position

Avg Monthly Salary (USD)

*3-5 Years of Experiences

Marketing & PR

Marketing Associate

$380

Marketing Manager

$650

Public Relations Manager

$515

Job Position

Avg Monthly Salary (USD)

*3-5 Years of Experiences

Corporate Services

Human Resources Generalist

$380

Accountant

$380

Administrative Officer

$290

Payroll

Monthly Minimum Wage by Province (IDR & USD)

Province

Monthly Minimum Wage (IDR)

(USD)

DKI Jakarta

5,067,381

$325

Papua

4,024,270

$258

North Kalimantan

3,361,653

$215

Bangka Belitung

3,640,000

$233

North Sulawesi

3,545,000

$227

Aceh

3,460,672

$222

South Sumatra

3,456,874

$221

Riau Islands

3,402,492

$218

West Papua

3,393,000

$217

East Kalimantan

3,360,858

$215

North Sulawesi

3,545,000

$227

Riau

3,294,625

$211

South Kalimantan

3,282,812

$210

Central Kalimantan

3,261,616

$208

North Maluku

3,200,000

$205

Jambi

3,037,121

$195

Gorontalo

3,025,100

$194

Province

Monthly Minimum Wage (IDR)

(USD)

DKI Jakarta

5,067,381

$325

Papua

4,024,270

$258

North Kalimantan

3,361,653

$215

Bangka Belitung

3,640,000

$233

North Sulawesi

3,545,000

$227

Aceh

3,460,672

$222

South Sumatra

3,456,874

$221

Riau Islands

3,402,492

$218

West Papua

3,393,000

$217

East Kalimantan

3,360,858

$215

North Sulawesi

3,545,000

$227

Riau

3,294,625

$211

South Kalimantan

3,282,812

$210

Central Kalimantan

3,261,616

$208

North Maluku

3,200,000

$205

Jambi

3,037,121

$195

Gorontalo

3,025,100

$194

Maluku

2,949,953

$189

West Sulawesi

2,914,958

$187

Southeast Sulawesi

2,885,964

$185

Bali

2,813,672

$180

West Sumatra

2,811,449

$180

North Sumatra

2,809,915

$180

Central Sulawesi

2,736,698

$175

Banten

2,727,812

$175

Lampung

2,716,497

$174

West Kalimantan

2,702,616

$173

Bengkulu

2,507,079

$161

West Nusa Tenggara

2,444,067

$157

East Nusa Tenggara

2,186,826

$140

East Java

2,165,244

$139

Special Region of Yogyakarta

2,125,897

$136

West Java

2,057,495

$132

Central Java

2,036,947

$130

Province

Monthly Minimum Wage (IDR)

(USD)

Maluku

2,949,953

$189

West Sulawesi

2,914,958

$187

Southeast Sulawesi

2,885,964

$185

Bali

2,813,672

$180

West Sumatra

2,811,449

$180

North Sumatra

2,809,915

$180

Central Sulawesi

2,736,698

$175

Banten

2,727,812

$175

Lampung

2,716,497

$174

West Kalimantan

2,702,616

$173

Bengkulu

2,507,079

$161

West Nusa Tenggara

2,444,067

$157

East Nusa Tenggara

2,186,826

$140

East Java

2,165,244

$139

Special Region of Yogyakarta

2,125,897

$136

West Java

2,057,495

$132

Central Java

2,036,947

$130

Basic Compensation

In Indonesia, payroll compliance involves tax payments and social security contributions which must be withheld by employers each pay cycle. The payroll reporting deadline is the 10th of the following month, and reports must be kept for at least 5 years. Payments must be made to employees and tax authorities from an country bank account.

Overtime Pay

The maximum allowable overtime is 4 hours per day or 18 hours per week. Overtime pay exemptions are applicable to employees in specific job classifications, typically at leadership levels. However, the company must establish and regulate which job levels are eligible for overtime, and in the absence of such designation, all levels should have the right to receive overtime pay.

Employment Law

Contracts

Employment agreements must be in Indonesian. There are two main types:

1. Permanent Employment (Indefinite Term) - PKWTT

May end due to resignation, retirement, termination (PHK), or death.
Contract roles can transition to permanent status upon completion.
Service time counts from contract start if transition is immediate; if there's a gap, it starts from permanent employment.

2. Contract Employment (Fixed Term) - PKWT

Defined by duration and specific tasks, excluding permanent roles.
Maximum duration: 5 years (including extensions).
Termination allowed upon task completion; early termination requires indemnity.
Contracts must be registered with the Ministry of Manpower.

Probation

Probation periods are exclusively applicable to Indefinite Term (Permanent) employment, with no provision for such periods in contract-based employment
A maximum probationary period of 3 months
Needs to be stated in the Employment Agreement

Public Holiday

Indonesia observes at least 14 public holidays annually, including a week off for Eid. Key holidays include:

Gregorian New Year
Islamic New Year
Chinese New Year
New Year in Balinese Calendar (Day of Silence)
Birth of the Prophet Mohammad
Good Friday
Labor Day
Vesak Day
Ascension of Christ
Ascension of Mohammad
August 17: Independence Day
End of Ramadan/Start of Syawal (Eid)
Feast of the Sacrifice
Christmas Day

Employee Leave

Special Leaves

Marriage Leave: 3 paid days
Child’s Wedding: 2 paid days
Child’s Circumcision: 2 paid days
Child’s Baptism: 2 paid days

Medical Leaves

Employees are entitled to sick leave upon providing a medical certificate. A medical certificate is mandatory for absences extending beyond 1 day due to illness.

Taxes

Employer Tax

Employers contribute 10.24% to 11.74% of employee salary towards employer tax
Employers also pay 22% corporate income tax per annum
Employees contribute 4% of basic salary and fixed allowances

Employee Tax

Income tax rates range from 5% to 35% depending on gross income

Contribution Type

Details

Employee Monthly Contribution

17% of monthly salaries, up to SGD 6,000

Skill Development Levy (SDL)

0.25% of total wages, with a minimum of SGD 2 and a maximum of SGD 11.25 per employee/month

Bonus

Tunjangan Hari Raya (THR)

Indonesia mandates Tunjangan Hari Raya (THR), a one-month salary bonus before major holidays (Idul Fitri for Muslims, Christmas for others). THR covers base salary and allowances, excluding bonuses. It is prorated for new hires

THR Bonus for Contract Employment

For employees with a 12-month contract, the compensation benefit is equivalent to 1 month’s salary. For contracts of a shorter duration, the amount is prorated, with a minimum of 1 month
Compensation benefits are disbursed after the contract concludes
If the contract concludes before the agreed timeframe, the company is still obligated to pay the compensation benefit based on the time of service completed by the employee
Expatriates are not eligible for compensation benefits

Termination

Termination with Notice

Termination notice must be provided in writing within 14 working days. For probationary employees, this is reduced to 7 working days.
Employees can review and accept or reject the termination letter. If rejected, they must respond in writing with reasons within 7 working days.

Severance Pay

Employees with over 3 years of service receive recognition pay based on years of service.
Compensation includes remaining annual leave and transportation allowance for relocation to a new job.

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