Indonesia at a glance
Taxes in Indonesia
Employer Contributions
Total employer social security: ~10%–12%
| Contribution Type | Rate |
|---|---|
| Old-Age Savings (JHT) | 3.7% |
| Healthcare (BPJS Kesehatan) | 4% |
| Pension (JPN) | 2% |
| Work Accident Protection (JKK) | 0.24%–1.74% (risk-dependent) |
| Death Insurance (JKM) | 0.3% |
Total employer social security: ~10%–12%
| Contribution Type | Rate |
|---|---|
| Old-Age Savings (JHT) | 3.7% |
| Healthcare (BPJS Kesehatan) | 4% |
| Pension (JPN) | 2% |
| Work Accident Protection (JKK) | 0.24%–1.74% (risk-dependent) |
| Death Insurance (JKM) | 0.3% |
Income tax: 5%–35% | Social security: ~5%
| Contribution Type | Rate |
|---|---|
| Old-Age Savings (JHT) | 2% |
| Healthcare (BPJS Kesehatan) | 1% |
| Pension (JPN) | 1% |
| Annual Income (IDR) | Rate |
|---|---|
| Up to 60,000,000 | 5% |
| 60,000,001 – 250,000,000 | 15% |
| 250,000,001 – 500,000,000 | 25% |
| 500,000,001 – 5,000,000,000 | 30% |
| Over 5,000,000,000 | 35% |
Employer of Record in Indonesia
How Remote& EOR Works
Remote& acts as the legal employer of your Indonesian workers — managing BPJS contributions, payroll, tax filings, and employment contracts in accordance with the Manpower Law (Law No. 13/2003 as amended), while you direct the work.
| Party | Role |
|---|---|
| Your Company | Manages work tasks, performance, and team direction |
| Remote& | Runs payroll, files BPJS/PPh 21 income tax, administers statutory benefits, ensures Manpower Law compliance |
| Employee | Works for your company under a locally compliant Indonesian contract |
Ask Remi:
"Hire a senior software engineer in Jakarta — IDR 40,000,000/month, starting next quarter" Remi handles everything: contract, BPJS registration, tax ID enrollment, THR allowance calculation, and payroll.
Benefits in Indonesia
- BPJS Ketenagakerjaan (workers' social security): Mandatory. Covers old-age savings, pension, work accident, and death insurance. Employer contributions total ~6%–8%
- BPJS Kesehatan (health insurance): Mandatory national health insurance. Employer contributes 4%; employee contributes 1%
- THR (Tunjangan Hari Raya — holiday allowance): Mandatory annual payment of one month's salary for employees with 12+ months' service, paid before religious holidays (typically Eid al-Fitr for Muslim-majority workforce)
- 13th-month salary: Equivalent to the THR above
- Supplemental private health insurance
- Performance bonuses
- Company car or transportation allowance
- Education allowance
- Home office equipment
- Flexible working hours
- Childcare assistance
- Professional development support
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Paid Annual Leave | 12 days |
| Sick Leave | Full pay for first 4 months; 75% for months 4–8; 50% for months 8–12; 25% thereafter |
| Maternity Leave | 3 months (1.5 months before, 1.5 months after birth) |
| Paternity Leave | 2 days |
Employment conditions
Probation
Probation is only permitted for permanent employees (PKWTT contracts) and must not exceed 3 months from the start of employment. Fixed-term contracts (PKWT) may not include a probation period.
Anti-Discrimination
Every worker has the right to equal treatment without discrimination based on sex, ethnicity, race, religion, skin colour, or political orientation.
Employee Rights & Protections
Indonesian workers are entitled to: written employment contract, minimum wage compliance, 13th-month/THR payment, annual leave, anti-discrimination protection, anti-harassment protection, health and safety protections, and severance pay on termination.
Payments
End of employment in Indonesia
Termination must be based on valid legal grounds and follow applicable Manpower Law procedures. Employees are generally entitled to statutory benefits including:
- Severance pay (uang pesangon): Based on years of service, up to 9 months' salary
- Long-service award (uang penghargaan masa kerja): Based on tenure
- Compensation for rights (uang penggantian hak): Including unused leave, housing, and medical allowances
Employment termination for disciplinary reasons requires documented warnings and, in certain cases, approval from the Industrial Relations Court.
Frequently asked questions
Four paths: run payroll from HQ (generally not viable due to local employment and visa requirements); engage genuine independent contractors; establish a PT PMA or local entity for direct employment; or use Remote& as Employer of Record — covering BPJS, THR, and Manpower Law compliance.