Indonesia, located between the Indian Ocean and the Pacific Ocean along the equator between Asia and Australia, is divided into 34 provinces. The country consists of 17,508 islands, and is the world’s fourth-most-populous country. It is also the world’s third-largest democracy and the world’s largest archipelagic state.
Some of the industries that have helped maintain the steady growth of Indonesia’s economy include; the fintech industry, the petrochemical industry, the infrastructure industry, the agriculture industry, and the healthcare sector.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Indonesia.
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Capital :
Jakarta
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Currency :
Indonesian Rupiah (Rp, IDR)
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Languages spoken :
Indonesian
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Population :
273.5 million (2020 est.)
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Minimum wage 2023 :
Varies across regions
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Cost of Living index :
$$ (97 of 139 countries)
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Payroll Frequency :
Bi-weekly/Monthly
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VAT - standard rate :
11%
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GDP - real growth rate :
3.7% (2021 est.)
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The holidays mentioned below are valid for the year 2024.
The approximate time for sharing the contract with an employee in Indonesia is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
The standard working hours are arranged either as seven hours per day and 40 hours per week for six working days in a week or eight hours per day and 40 hours per week for five working days in a week. Employees working six days per week are entitled to one day of rest per week whilst those who work five days per week get two days of rest.
Any work performed beyond seven hours per day and 40 hours per week in a six-day work week or eight hours per day and 40 hours per week in a five-day workweek is considered overtime work.
Overtime must be paid at 1.5 times the normal hourly rate for the first hour and two times the normal rate for the subsequent hours. Overtime is calculated based on an employee’s monthly wage. The wage per hour is equal to 1/173 of the employee’s monthly wage.
Working agreements for an unspecified period can require a probation period of three months at the maximum.
| Termination Status | Notice Period |
| During Probation | No later than 7 days |
| Termination by the employer post probation | No later than 14 days |
| Employee Resignation | No later than 30 days |
Paid leave in Indonesia is set in the employment contract with at least 12 days of paid annual leave per year after completing one full year of employment.
An employee who is not able to perform work due to illness is entitled to paid leave in the below manner:
| Duration of Sickness | Wage Entitlement |
| The first four months | 100% of wages |
| 5th to 8th months | 75% of wages |
| 9th to 12th month | 50% of wages |
| Subsequent months | 25% of wages |
Female employees are entitled to take three months’ fully paid maternity leave, of which one and half months are taken prior to the birth, and the other one and half months are taken post-natal, or a period as stated in the medical statement issued by a doctor.
An employee whose wife gives birth to a baby or suffers a miscarriage is entitled to two days of paid leave from work.
| Reason for Leave | Leave Duration |
| Employees’ wedding | 3 days |
| Wedding of their child | 2 days |
| Circumcision of their son | 2 days |
| Baptism of their child | 2 days |
| Their wife giving birth or suffering a miscarriage | 2 days |
| The death of their parents, in-laws, spouse, children, or son or daughter in law | 2 days |
| The death of any family member who stayed in the same household | 1 day |
| Menstruation leave | 2 days |
There is no statutory provision for unpaid leave.
All employees in Indonesia, including expatriates who work for a minimum of six months in the country, must participate in and make contributions to the National Social Security System (Sistem Jaminan Sosial Nasional or “SJSN”), which is administered by the Social Security Administration Board (Badan Penyelenggara Jaminan Sosial or “BPJS”).
An overview of employer contributions towards statutory benefits is presented in the table below.
| Benefits | Employer Contribution |
| Worker Accident Benefit | 0.24 to 1.74% |
| JSHK – Worker Accident Insurance | 0.24% |
| Life insurance | 0.3% |
| Old age savings | 3.7% |
| Healthcare | 4% |
| Pension | 2% (maximum IDR 191,192) |
Employers contribute 3% toward mandatory health insurance.
Indonesia has compulsory universal healthcare which is funded through payroll taxes and the general budget. Employers are required to enroll their employees in this system.
Worker Accident Benefit: This refers to the worker accident benefit under Social security (BPJS Ketenagakerjaan) in Indonesia. The contribution is fully paid by employers and ranges from 0.24% to 1.74% of wages, depending on the level of risk and protection.
JSHK – Worker Accident Insurance: JSHK is refer to worker accident statutory insurance under Jakarta district Government in Indonesia. Employers pay 0.24%.
To be eligible for unemployment benefits, participants must have participated in the government’s social security programs, the Social Security Administrator for Health (BPJS Kesehatan) for healthcare, and the Workers Social Security (BPJS Ketenagakerjaan) for pensions.
0.46% of the monthly wages is paid to the Job Loss Scheme program, in which 0.22% is contributed by the government and the remaining 0.24% from the employer. Importantly, the employer’s contribution is taken from the re-composition of the life insurance and work compensation components of the pension program.
There are two types of mandatory pension premia in the BPJS manpower social security package:
Employers pay 3.7% for old-age insurance and 2% for the pension insurance.
Employers contribute 0.3% towards life insurance.
Upon the death of the participant, their heirs can claim the benefits.
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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