Global Expansion Guide

Indonesia

Manage and pay your employees easily with BIPO in Indonesia and 170+ other markets. Build your international teams today with our global Employer of Record service!

Currency

Indonesian Rupiah (IDR)

Language

Bahasa Indonesia

Capital

Jakarta

Employer of Record Indonesia

Employment Contract

Statutory Contributions

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in Indonesia

Employer of Record
Indonesia

Employer of Record Indonesia

Embark on your business expansion in Indonesia with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the Indonesian market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

Employment Contract

1) Contracts shall include the contents below:

Name, age, gender and address of the employee
Name, address and business type of employer
The job description, work location and position of the employee
Salary and payment method
The obligations and rights of the employee and the employer
The commencement date of the employment and the place to signed the contract

2) Fixed-term Employment Contract

The duration of a fixed-term employment contract is 5 years, there is no legal requirements on extension times and duration of every fixed-term employment contract.
The fixed-term employment contract shall be drafted in Indonesian and English.
In the event of a conflict or disagreement between an employee and an employer, a bilingual contract is required.
In the absence of the above requirements, a fixed-term employment contract will be deemed as an indefinite employment contract under the law.

Statutory Contributions

Item	Detail	Employer Contribution	Employee Contribution
BPJS Healthcare (Health)	Medical Benefits	4%, Contribution ceiling: IDR 480,000	1%, Contribution ceiling: IDR 120,000
Old Age Saving (JHT)	Retirement Guarantee	3.7%	2%
Pension (JP)	Old Age Guarantee	2%, Contribution ceiling: IDR 200,846 N/A for foreign employees	1%, Contribution ceiling: IDR 100,423 N/A for foreign employees
Working Accident Insurance (JKK)	Working Accident Protection	Vary by industry risk categories, 0.24-1.74%	–
Death Insurance (JKM)	Survivor’s Pension	0.3%	–

Companies are legally required to pay employees’ religious holiday allowance/ Tunjangan Hari Raya (THR) according to their religious beliefs. THR shall be paid seven days in advance before the corresponding religious holiday begins.

Minimum Wage

Indonesia’s minimum wage has been increased by 6.5% on average in 2025.

Region	Minimum Wage（Rp）
Aceh	3,685,615
North Sumatra	2,992,559
West Sumatra	2,994,193
Riau	3,508,775
Riau Islands	3,623,653
Jambi	3,234,533
South Sumatra	3,681,570
Bangka Island	3,876,600
Bengkulu	2,670,039
Lampung	2,893,069
Banten	2,905,119
DKI Jakarta	5,396,760
West Java	2,191,232
Central Java	2,169,348
Yogyakarta Special Region	2,264,080
East Java	2,305,984
Bali	2,996,560
West Nusa Tenggara	2,602,931
East Nusa Tenggara	2,328,969
West Kalimantan	2,878,286
South Kalimantan	3,496,194
Central Kalimantan	3,473,621
East Kalimantan	3,579,313
North Kalimantan	3,580,160
Maluku	3,141,699
North Maluku	3,408,000
Gorontalo	3,221,731
North Sulawesi	3,775,425
Southeast Sulawesi	3,073,551
Central Sulawesi	2,914,583
South Sulawesi	3,657,527
West Sulawesi	3,104,430
Papua	4,285,848
West Papua	3,615,000

Public Holidays

The National Public Holidays in Indonesia in 2025 is shown as follows. Please refer to the announcement of the Indonesia government.

Holiday Name	Date
New Year’s Day	1 January 2025
Isra Mi’raj	27 January 2025
Chinese New Year	28 January 2025
Chinese New Year	29 January 2025
Bali Hindu New Year	28 March 2025
Bali Hindu New Year	29 March 2025
Hari Raya Idul Fitri	31 March 2025
Hari Raya Idul Fitri Holiday	1 April – 4 April 2025
Hari Raya Idul Fitri Holiday	7 April 2025
Good Friday	18 April 2025
Easter Day	20 April 2025
Labour Day	1 May 2025
Vesak Day	12 May 2025
Vesak Day Holiday	13 May 2025
Ascension Day of Jesus Christ	29 May 2025
Ascension Day of Jesus Christ Holiday	30 May 2025
Pancasila Day	1 June 2025
Eid al-Adha	6 June 2025
Eid al-Adha Holiday	9 June 2025
Islamic New Year	27 June 2025
Indonesian Independence Day	17 August 2025
The Prophet Muhammad’s Birthday	5 September 2025
Christmas Day	25 December 2025
Christmas Day	26 December 2025

Working Hours

Normal Working Hours

Indonesia adopts both 5-day per week and 6-day per week work schedules.

7 hours per day, 40 hours per week if the employee works 6 days per week; or
8 hours per day, 40 hours per week if the employee works 6 days per week

Rest Time

An employee who works 4 consecutive hours is entitled to at least a 30-minute break. This rest time is unpaid.
The employer shall provide extra paid breaks to employees to pray and worship according to their religions.
An employee, who works 6 days per week, is entitled to no less than one rest day; An employee, who works 5 days per week, is entitled to two rest days in a week

Night Work

Night working hours are regarded as work between 8:00 pm on one day and 6:00 am the next day.
Female employees are restricted from working at night under specific laws.

Overtime

An employee is entitled to overtime pay if his or her working hours exceeded 7 hours in a six-day workweek schedule or 8 hours in a five-day workweek schedule; or he or she works on rest days or public holidays.
Employees are allowed to work overtime only 4 hours per day, 18 hours per week by law effective from 1st of November, 2020.
When the employer issues a written overtime request, the employee should provide a written consent of the overtime hours.
Overtime pay rates are shown as follows:

Employee Type	Overtime Type	Overtime Hour	Overtime Pay Rates
5-day workweek & 6-day workweek employees	On a workday	The first hour	1.5 times the normal hourly rate
5-day workweek & 6-day workweek employees	On a workday	From the second to 4th hour	2 times the normal hourly rate
6-day workweek employees	On the shortest workday	The first 1-5th hours	2 times the normal hourly rate
6-day workweek employees	On the shortest workday	From the 6th hour	3 times the normal hourly rate
6-day workweek employees	On the shortest workday	From the 7th-8th hour	4 times the normal hourly rate
6-day workweek employees	On a full day rest day	The first 1-7th hours	2 times the normal hourly rate
6-day workweek employees	On a full day rest day	From the 8th hour	3 times the normal hourly rate
6-day workweek employees	On a full day rest day	From the 9th-10th hour	4 times the normal hourly rate
6-day workweek employees	On a non-full day rest day	The first 1-5th hours	2 times the normal hourly rate
6-day workweek employees	On a non-full day rest day	From the 6th hour	3 times the normal hourly rate
6-day workweek employees	On a non-full day rest day	From the 7th-8th hour	4 times the normal hourly rate
5-day workweek employees	On rest days	The first 1-8th hours	2 times the normal hourly rate
5-day workweek employees	On rest days	From the 9th hour	3 times the normal hourly rate
5-day workweek employees	On rest days	From the 10th-11th hour	4 times the normal hourly rate
6-day workweek employees	On a full-day public holiday	The first 1-7th hours	2 times the normal hourly rate
6-day workweek employees	On a full-day public holiday	From the 8th hour	3 times the normal hourly rate
6-day workweek employees	On a full-day public holiday	From the 9th-10th hour	4 times the normal hourly rate
6-day workweek employees	On a non-full-day public holiday	The first 1-5th hours	2 times the normal hourly rate
6-day workweek employees	On a non-full-day public holiday	From the 6th hour	3 times the normal hourly rate
6-day workweek employees	On a non-full-day public holiday	From the 7th-8th hour	4 times the normal hourly rate
5-day workweek employees	On public holidays	The first 1-8th hours	2 times the normal hourly rate
5-day workweek employees	On public holidays	From the 9th hour	3 times the normal hourly rate
5-day workweek employees	On public holidays	From the 10th-11th hour	4 times the normal hourly rate

Other Regulations

Indonesia allows employers to hire minor employees equal to or over fourteen years of age, with a maximum of 3 working hours per day.

Probationary Period

No more than 3 months for indefinite employment contracts. During the probationary period, the employer could dismiss employees without following the legal requirement of termination procedures.
Not allowed to stipulate a probationary period on fixed-term employment contracts.
The provisions of the probationary period will only take effect if they are clearly stated in the employment contract or a written mutual agreement by both the employer and the employee.

Leave

Statutory leave in Indonesia includes:

Type	Applicable to	Details
Paid Annual Leave	Employees employed ≥ 12 months	12 days
Sick Leave	All employees	Medical proof is required, wages will be reduced according to the length of sick leave.
Pregnancy and Maternity Leave	Female employees	3 months, with doctor’s certificate, could take another 3-month leave in addition.
Paternity Leave	Male employees	2 days, could be extended 3 days with the consent of the employer.
Emergency Leave (Urgent personal matters especially for family, e.g. bereavement leave, marriage leave, circumcision leave, etc.)	All employees	1-3 days

Termination and Compensation

Termination Notice

In principle, a 30-day notice period must be given to terminate an employment contract.

Compensation

For a fixed-term employment contract, the employee is eligible to one month’s salary for every completed employment year. The severance payment shall be prorated if the employee work more than one month, but less than 12 months, or more than 12 months for the employer: Service months / 12 * one month salary. It is not applicable to foreign employees.
The severance payment and compensation of indefinite employment include below three parts:

① Compensation benefits (UPH): medical, healthcare and housing compensation equals to 15% of ② & ③, cash out of unused annual leave, travel compensation.

② Severance payment (Uang Pisah / Pesangon)

Length of Employment	Compensation
＜ 1 year	One month salary
≥ 1 year，＜ 2 years	Two months’ salary
≥ 2 years，＜ 3 years	Three months’ salary
≥ 3 years，＜ 4 years	Four months’ salary
≥ 4 years，＜ 5 years	Five months’ salary
≥ 5 years，＜ 6 years	Six months’ salary
≥ 6 years，＜ 7 years	Seven months’ salary
≥ 7 years，＜ 8 years	Eight months’ salary
≥ 8 years	Nine months’ salary

③ Long service payment (UPMK)

Length of employment	Compensation
≥ 3 years，＜ 6 years	Two months’ salary
≥ 6 years，＜ 9 years	Three months’ salary
≥ 9 years，＜ 12 years	Four months’ salary
≥ 12 years，＜ 15 years	Five months’ salary
≥ 15 years，＜ 18 years	Six months’ salary
≥ 18 years，＜ 21 years	Seven months’ salary
≥ 21 years，＜ 24 years	Eight months’ salary
≥ 24 years	Ten months’ salary

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

Initial Consultation:
The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
Payroll Management:
We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with Singaporean regulations.
Contributions and Taxes:
Our expertise in managing local social security requirements ensures your business complies with in-country financial obligations.
Compliance with Minimum Wage and Working Hours:
We guarantee that your employment practices adhere to Indonesia’s minimum wage and working hours standards, safeguarding your business against potential legal issues.
Leave and Paid Time Off Management:
Implement and manage leave policies that comply with Indonesia’s laws, ensuring a fair and transparent leave management system for your employees.
Regulatory Compliance:
Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
Other services:
Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in Indonesia

Unlock your growth potential with BIPO’s Employer of Record service in Indonesia. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

What is an EOR company?

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees.

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from:

Compliance in the global markets where you operate
Reduced costs and risk mitigation
Overall workforce productivity, effectiveness, and efficiencies

Who should engage our EOR service?

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

Scale their global business and be fully operational in foreign markets quickly
Reduce financial and HR complexities while expanding internationally
Minimise time spent trying to understand local labour laws and foreign tax systems
Stay compliant across global markets while reducing HR and administrative workflows
Benefit from a centralised and intuitive cloud HR platform to manage international teams

Why should you engage an Employer of Record?

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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Global Expansion Guide

Indonesia

Currency

Language

Capital

Employer of Record Indonesia

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Normal Working Hours

Rest Time

Night Work

Overtime

Other Regulations

Probationary Period

Leave

Termination and Compensation

Termination Notice

Compensation

BIPO as your Employer of Record

Benefits of BIPO Employer of Record Service in Indonesia

Stay up to date with the latest employment regulations.

Frequently Asked Questions

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Global Payroll Outsourcing

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