Payroll and Benefits Guide Indonesia
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
|
0.24% – 1.74%
|
Work Accident (JKK)
|
|
3.70%
|
Old Age Benefit (JHT) |
|
0.30%
|
Death/Life Insurance (JKM) |
|
3.00%
|
Pension (JP) (applied on salary up to 11,086,300 IDR Monthly)
|
|
4.00%
|
Health Insurance (BPJS) (maximum of 480,000 IDR) |
| 10.24% – 11.74% |
Total Employment Cost |
| Employee Payroll Contributions | |
|
2.00%
|
Old Age Benefit (JHT) |
|
1.00%
|
Pension (JP) (applied on salary up to 11,086,300 IDR Monthly)
|
|
1.00%
|
Health Insurance (BPJS)(maximum of 120,000 IDR monthly) |
| 4.00% |
Total Employee Cost |
| Employee Income Tax | Annual |
|
5.00%
|
Up to IDR 60 million
|
|
15.00%
|
IDR 60 million – 250 million
|
|
25.00%
|
IDR 250 million – 500 million |
|
30.00%
|
IDR 500 million – 5 billion
|
|
35.00%
|
Above IDR 5 billion
|
| 20.00% | Non- residents are taxed at a flat rate on Indonesian-sourced income. |
*Every December, the annual tax is calculated and compared with the cumulative monthly tax payments submitted to the government.
Employer taxes
Employee taxes
Minimum Wage
Important update:
General
The minimum wage requirement varies based on the local government regulations ranging from IDR 2,169,348 per month in Central Java to IDR 5,729,876 per month in DKI Jakarta.
Hourly wages for part-time workers
Indonesia has sought to reform its labor laws through the Omnibus Law and has since abolished the sectorial minimum wage through Government Regulation 36 of 2021 and introduced an hourly wage for part-time workers.
The formula for determining the hourly wage: Hourly wage = monthly wage/126
To calculate the daily wage:
Six working days/week: Daily wage = monthly wage/25
Five working days/week: Daily wage = monthly wage/21
The employer and employee are allowed to set their agreement, but the final salary should not be lower than the calculation using the aforementioned formulas.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
The payroll cycle in Indonesia is generally monthly and is usually paid on the last working day of the month as agreed within the employment contract.
13th Salary
In Indonesia, there is a mandatory religious holiday bonus called Tunjangan Hari Raya (THR), an additional one month’s salary payment made prior to the longest religious holiday (Hari Raya Idul Fitri for Muslim workers and Christmas for other faith workers). THR includes a base salary and fixed monthly allowance, but does not have to cover other payments such as bonuses. THR is prorated for employees who have not completed a full year of service.
Authority Payments
|
Authority Payment |
Paid To |
Due Date |
Method |
|
Payroll Tax |
Indonesian Tax Office |
10th of the following month |
E-filing system provided by Indonesian Tax Office (ITO) |
|
Social Security |
Social security |
15th of the following month |
|
|
Health Tax |
Health agency |
10th of the current month – new joiners need to be registered by the 10th |
Working Hours
General
The working hours are arranged as follows:
- Employees with 6 work days a week- 7 hours a day, 40 hours a week.
- Employees with 5 work days a week – 8 hours per day, 40 hours a week.
These working hours rules do not apply to certain businesses and are usually regulated with a ministerial decision.
On working days, an employer shall arrange a rest period during work for its employees of not less than half an hour after the employee has been working for no more than four consecutive hours.
Employers are required to track the working time of all employees, regardless of their position, to ensure proper overtime compensation.
Overtime
- Maximum Ordinary Hours: The standard working week is 40 hours (Manpower Law Article 77). This is split into one of two patterns:
- 8 hours per day for a 5-day workweek.
- 7 hours per day for a 6-day workweek.
- Overtime Limit (Working Days): Overtime work is limited to a maximum of 4 hours per day and 18 hours per week (excluding work performed on weekly rest days or public holidays).
- Consent and Obligation: Overtime work requires the employer’s written instruction and the written (or digital) consent of the employee. The employer is obligated to provide adequate rest periods and a meal of at least 1,400 kilocalories if the overtime lasts 4 hours or more.
- Exemptions: Managerial employees (thinkers, planners, executors, and controllers of company operations) who receive a higher wage are often exempted from overtime pay provisions, provided this exemption is explicitly regulated in a contract or company regulation.
Mandatory Overtime Pay Rates
Overtime pay is highly structured and varies significantly based on the total hours worked and whether it falls on a normal workday or a designated rest day/holiday. The calculation basis for the hourly wage is typically $\frac{1}{173}$ of the monthly salary.
Overtime on Normal Working Days:
| Hours Worked (Beyond 7/8 hours per day) | Minimum Premium Rate (Statutory) | Total Pay Rate |
| First Hour of Overtime | 1.5 times the hourly wage. | 150% |
| Subsequent Hours of Overtime | 2 times the hourly wage. | 200% |
Overtime on Weekly Rest Days or Statutory Holidays:
The compensation structure for work on a rest day or public holiday is tiered and escalates quickly. The following rates are applied to every hour worked on that day, up to the daily limits:
| Hours Worked (On Rest Day/Holiday) | Minimum Premium Rate (Statutory) | Total Pay Rate |
| First 8 Hours (or 7 hours for 6-day week) | 2 times the hourly wage. | 200% |
| Ninth Hour | 3 times the hourly wage. | 300% |
| Tenth, Eleventh, and Twelfth Hours | 4 times the hourly wage. | 400% |
Leave
Annual Leave (vacation)
Paid leave in Indonesia is set in the employment contract as at least 12 working days of paid annual leave per year after completing one full year of employment.
Employees who have been working for six consecutive years for the same employer are entitled to one month of leave in the seventh year of service and one month of leave in the eighth year of service.
PTO carryover
In Indonesia, statutory annual leave (minimum 12 days per year) is meant to be taken within the leave year. The law does not grant an automatic right to carryover, but unused statutory leave cannot simply be forfeited by policy. Carryover is typically allowed by agreement or company policy, and unused leave must be paid out on termination.
- For EOS, according to Article 156 of Law No. 13/2003 and Article 3 of the Manpower Regulation No. 6/2016, this leave must generally be taken within 6 months after it becomes due.
- For GoGlobal, PTO carryover is allowed
Public Holidays
Each year the government may decide if public holidays falling on weekends will be moved to a weekday or will be lost.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 16 January 2026 | Friday | Isra Mi’raj of Prophet Muhammad | Standard holiday |
| 17 February 2026 | Tuesday | Chinese New Year | Standard holiday |
| 19 March 2026 | Thursday | Nyepi (Day of Silence) | Standard holiday |
| 21 March 2026 | Saturday | Eid al-Fitr (Day 1) | Standard holiday |
| 22 March 2026 | Sunday | Eid al-Fitr (Day 2) | Standard holiday |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 5 April 2026 | Sunday | Easter Sunday | Standard holiday |
| 1 May 2026 | Friday | International Labor Day | Standard holiday |
| 14 May 2026 | Thursday | Ascension of Jesus Christ | Standard holiday |
| 27 May 2026 | Wednesday | Eid al-Adha | Standard holiday |
| 31 May 2026 | Sunday | Vesak Day | Standard holiday |
| 1 June 2026 | Monday | Pancasila Day | Standard holiday |
| 16 June 2026 | Tuesday | Islamic New Year | Standard holiday |
| 17 August 2026 | Monday | Independence Day | Standard holiday |
| 25 August 2026 | Tuesday | Prophet Muhammad’s Birthday | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
Sick Days
When employees are sick or injured, they are entitled to paid sick leave provided they show a medical confirmation of their ill health. Employees can also have long-term sick leave lasting for longer than one year. A doctor should recommend such leave in writing.
Payment to employees on prolonged sick leave is as follows:
- 100.00% in the first four months paid by the employer
- 75.00% in the fourth to eighth months paid by the employer
- 50.00% in the eighth to twelfth months paid by the employer
- 25.00% of wages from one year until termination, paid by the employer
Maternity Leave
Employees are entitled to 3 months of fully paid maternity leave, with 1.5 months used before the expected delivery date and 1.5 months used after the birth. The maternity leave is paid by the employer at 100% of the regular salary rate of pay.
Mothers can take up to an additional three months of maternity leave if there are health complications for the mother or newborn, supported by a medical certificate. The first four months are paid at 100% of the salary, and the remaining two months are paid at 75% salary.
Women who experience a miscarriage are entitled to 1.5 months of paid leave, which can be extended with a medical certificate.
Paternity Leave
Male employees are entitled to 2 days leave for the birth of their child or a miscarriage. This leave is paid by the employer at 100% salary.
Parental Leave
Employees are entitled to Family Care Leave to care for a sick family member, with a maximum of 2 days per incident and up to 14 days per year. This leave is unpaid, but some companies may provide paid leave.
Other Leave
- Bereavement Leave: Employees are entitled to up to 2 days of paid leave due to the death of their spouse or child. 1 day of paid leave is given for the death of their parents, parent-in-law, children-in-law or member of the their household.
- Marriage Leave: 3 days paid leave for marriage or 2 days paid leave for the marriage of the employee’s child.
- Circumcision Leave: 2 days paid leave for the circumcision of the employee’s child.
- Baptism Leave: 2 days paid leave for the baptism of the employee’s child
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
In Indonesia, employers cannot dismiss employees at will. Termination of an employment contract by the employer must be based on valid reasons as specified in the Indonesian Manpower Law and other relevant regulations. The burden of proof for the validity of the termination rests with the employer. If the employee believes the termination is unjust, the decision can be challenged in the Labor Court, which will give the final ruling.
Valid reasons include violation of the employment agreement, the employee is ill for more than 12 months, the employee is absent from work for more than five days without a valid reason, provided he or she has been notified twice and a change in the company’s status, its merger with another business, or the acquisition of its ownership. It might be possible to dismiss based on poor performance but the process is strictly regulated and requires adherence to specific procedures including a documented Performance Improvement Plan (PIP) and three consecutive warning letters over a period of six months if the employee fails to improve.
Before an employee can be terminated, the employer must make a genuine effort to avoid the termination by negotiating with the employee and/or the employee’s labour union to find an accommodation such as a change in working hours, improved working methods, or coaching.
If termination cannot be avoided, the employer must explain the reasons for termination clearly in writing to the employee and/or the employee’s labour union.
| Salary payment interval / date | Final payment on termination | Bank account payment requirement |
|---|---|---|
| Wages are generally paid monthly, typically on or by the last working day of the month, unless the employment contract states otherwise. | Upon termination, the employer must pay all earned wages and entitlements (e.g., severance, compensation for fixed-term contract early termination) under the Manpower Law (Law No. 13 of 2003, as amended) and Government Regulation No. 35/2021. For fixed-term contracts terminated early the employee may be entitled to “balance of contract pay”. | The law allows wages to be paid in monetary form, and bank transfer is permitted if the employee has provided an account. |
Notice Period
Employers must generally give a written notice of termination at least 14 working days before the effective date of termination. For termination during a probationary period, the notice period is reduced to 7 working days or payment can be given in lieu of notice.
Employees must provide a minimum of 30 days written notice before their last working day.
Severance Pay
In Indonesia, severance pay is mandatory in certain circumstances such as company restructuring, bankruptcy, force majeure events not resulting in closure and early termination of a Fixed Term contract. Severance is paid at an amount determined by the employee’s length of service, according to the following:
- Less than 1 year of employment – 1-month wage
- 1 year or more, but fewer than 2 years – 2 months’ wage
- 2 years or more but fewer than 3 years – 3 months wage
- 3 years of more, but fewer than four years – 4 months’ wage
- 4 years or more, but fewer than 5 – 5 months’ wage
- 5 years or more, but fewer than 6 – 6 months’ wage
- 6 years or more, but fewer than 7 – 7 months’ wage
- 7 years or more, but fewer than 8 – 8 months’ wage
- 8 years or more – 9 months’ wage
Probation Period
The maximum permitted probationary period is 3 months and it cannot be extended further. There is no mandatory minimum period that is required to be used. Even when terminating during the probation period a valid reason for dismissal must be given.
Probationary periods can only be used in permanent employment contracts, Fixed-term contracts cannot include a probationary period.
Minimal Statutory Termination Costs
Compensation pay
(unused leave, housing/medical allowance = 15% of severance+service)
Notice Period: 14 working days before termination
Severance:
Based on reason for termination:
Redundancy/business closure → 0.5–2× severance + 1× service + compensation
Performance → 0.5× severance + 1× service + compensation
Mutual agreement → as per MTA
Common Benefits
- Meal allowance per month around IDR 100.000 – 190.000 (taxable)
- Commuting expenses (from and to the office are around IDR 2.000.000 – 3.000.000 per month (taxable)
- Gym membership is between IDR 300.000 – 500.000 per month (taxable)
- Internet coverage is between IDR 200.000 – 500.000 per month (taxable)
- Health Insurance
Immigration
The government of Indonesia provides visa exemptions to nationals of 169 countries, including the United States, Canada, Australia, and Singapore.
Previously, for a foreign employee to enter Indonesia for work, they would need an individual work permit (IMTA). This has now been replaced with a notification from the Ministry of Manpower. Once an employee or business has obtained a notification, they can apply for an Indonesian visa. Foreigners will be issued a Visa Telex (visa index 312), which allows them to work and travel to Indonesia.
There are two types of visas for foreign nationals who intend to live and work in Indonesia.
Izin Tinggal Terbatas or Electronic ITAS (e-ITAS) where employers need to apply for an ITAS on behalf of future employees. The ITAS grants employees the right to stay in Indonesia as well as open a bank account. They can also stay in the country and after three years, apply for a permanent residency. Before applying for the ITAS, the employee must also get a Visa Izin Tinggal Terbatas (VITAS) – an Indonesian limited-stay permit visa.
The Kartu Izin Tinggal Tetap (KITAP) is a visa an employee can also apply for which grants the employee a permanent residence permit (KITAP), but this is only available to people who have held an ITAS for three or more years.
VAT
General
The standard rate of VAT in Indonesia is 11%.
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Payroll and Benefits Guide
in Indonesia
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 16 January 2026 | Friday | Isra Mi’raj of Prophet Muhammad | Standard holiday |
| 17 February 2026 | Tuesday | Chinese New Year | Standard holiday |
| 19 March 2026 | Thursday | Nyepi (Day of Silence) | Standard holiday |
| 21 March 2026 | Saturday | Eid al-Fitr (Day 1) | Standard holiday |
| 22 March 2026 | Sunday | Eid al-Fitr (Day 2) | Standard holiday |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 5 April 2026 | Sunday | Easter Sunday | Standard holiday |
| 1 May 2026 | Friday | International Labor Day | Standard holiday |
| 14 May 2026 | Thursday | Ascension of Jesus Christ | Standard holiday |
| 27 May 2026 | Wednesday | Eid al-Adha | Standard holiday |
| 31 May 2026 | Sunday | Vesak Day | Standard holiday |
| 1 June 2026 | Monday | Pancasila Day | Standard holiday |
| 16 June 2026 | Tuesday | Islamic New Year | Standard holiday |
| 17 August 2026 | Monday | Independence Day | Standard holiday |
| 25 August 2026 | Tuesday | Prophet Muhammad’s Birthday | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
Is Tunjangan Hari Raya payment paid to all types of workers?
Hi Kim, Yes, Tunjangan Hari Raya payment must be paid to all employees whether they have become permanent employees, contract employees, or part-time employees.
May I ask if the THR received by employees, subjected to tax deduction?
Yes, the same as salary.
What is the minimum number of days I have to allow an employee to take off consecutively using their annual leave?
Hi, if your employee would like to use their annual consecutively, the minimum number of days you must approve is 6.
How do we do pro-rate annual leave for Indonesian employees who left the employer in the middle of the calendar year?
Hi Lim, this would depend on how long the employee has been employed, however, you would need to calculate the monthly accrual amount and multiply it by the number of months completed.
Are there any criteria for a male employee to be entitled to paternity leave of 2 days? Must the employee work with the employer for a minimum of 3 months?
My father worked more than 3 years in indonesia as a machenical engineer later they passed away because of heartattack in company area. What is the compensation in this situation???
According to Article 166 of Law Number 13 of 2003 concerning Manpower (“Labor Law”), in the event that an employment relationship ends due to the death of an employee, the heirs will be paid an amount that is equal to twice the severance pay based on the years of service.
In addition to two times the severance pay, heirs are eligible for a one-time service payment, which consists of three months’ wages and compensation for entitlements that should have been received. This includes:
-Unused annual leave
-Some transportation costs
-Housing allowances and medical and health care allowances are calculated at 15% of severance pay and/or reward for years of service.
-The rest of the compensation is determined by individual work agreements, enterprise rules, and regulations, or collective agreements.
As a foreign company in Indonesia, how to find the reference from any local companies on monthly allowance for sales people
Which allowances are you referring to?
Thank you for reply.
I meant
1. Petro
2. Car depreciation (in case employee owns car)
3. Car maintenance
There are no rules around petrol reimbursement etc – it is left to each company to decide their policy.
if the employee is working as seaman/offshore on rotational basis (1 month working, 1 month on leave) are they still entitled for 12 days of paid annual leave per year?
Hello, unfortunately, we’re unable to advise on this specific working set-up.
Hi Need Help! Does contribution to Pension Fund mandatory in *Indonesia*? If *Yes*, what is the *minimum percentage* contribution defined for *employer and employee*?
Hello. This information can be found on the Countrypedia which shows the mandatory pension contribution of 2% (with max IDR 191,192) from the ER and 1% (with max IDR 95,596) from the EE.
Are employers required by law to provide their employees payslips showing amount deducted for taxes, BPJS, and any reimbursement claims?
Hello, it is a standard that all of these items would be included on the employee’s pay slip.
How is compensation determined for an employee who passes away from natural causes while at home?
We recommend to contact directly the employer and communicating with the relevant Indonesian government agencies, such as BPJS Ketenagakerjaan and BPJS Kesehatan, can help clarify entitlements and procedures under such circumstances.
Our current salary increment date is 1 Apr every year, can i reschedule it to 1 Oct? is it a must to get employee consent? your advice is highly appreciated. thanks
Assuming this is a salary increase process run at the discretion of the company (i.e. not required by the law), then the company should be free to run it how and when they feel is best, as long as it does not contradict anything written in the employment contract.