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Good to know
Indonesia is one of the world’s largest producers of coffee, with Sumatra and Java known for their distinct coffee varieties.
Currency
Indonesian Rupiah (IDR)
Capital
Jakarta
Employee Costs
4%
Local Language
Indonesian
Employer Taxes
10%
Public Holidays
21 Days
Payroll Frequency
Monthly
Tax Year
1st Jan – 31st Dec
Are you ready to hire in Indonesia?
Indonesia boasts a vast and diverse labour pool, offering a wide range of skills and talents to meet your business needs. It’s location in Southeast Asia makes it a strategic hub for businesses looking to access the broader Asian market.
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Minimum Wage
The minimum wage according to local government regulations, ranges from 1,798,979 IDR in Central Java to 4,416,186 IDR in DKI Jakarta.
Working Hours
Standard Working Hours
The standard working hours in Indonesia can vary. Employees working a 6 day week usually work 7 hours a day over a 40 hour week. However, employees working a 5 day week will work 8 hours over a 40 hour week.
Overtime
Overtime hours worked on weekdays are compensated at 150.00% of the standard hourly wage for the initial overtime hour, escalating to 200.00% for each subsequent overtime hour.
Payroll
In Indonesia, the payroll schedule is monthly, and the agreed pay day is usually the last working day specified in the employment contract.
Leave
Paid time off
Paid leave entitlements in Indonesia are stated in the employment agreement, granting a minimum of 12 days of paid annual leave per year after completing 1 full year of employment.
Employees who serve 6 continuous years of service with the same employer are eligible for 1 month of leave during their 7th year of service and an additional month of leave in their 8th year of service.
Sick Pay
In cases of illness or injury, employees have the right to paid sick leave. However this is dependant upon the submission of medical documentation confirming their health condition.
Additionally, employees may be eligible for extended sick leave exceeding 1 year, which requires a written recommendation from a medical professional.
Maternity Leave
Employees have the right to 3 months of fully compensated maternity leave before the expected delivery date, and an additional 1 and a half months of leave after childbirth.
This maternity leave is remunerated at the rate of 100.00% of the standard salary.
Paternity Leave
New fathers are entitled to 2 days’ leave for the birth of their child.
Termination
Termination of Employment
Prior to initiating the termination of an employee, the employer is required to explore alternatives by engaging in negotiations with the employee and/or the employee’s labour union. These discussions aim to identify potential accommodations, which may include adjustments to working hours, enhancements in work arrangements, or providing coaching.
If termination becomes unavoidable, the employer must provide a comprehensive, written explanation of the termination reasons to the employee and/or the employee’s labour union.
Notice Period
The notice periods within Indonesia are generally 30 days, although employers can specify longer notice periods within the employment contract.
Probation Period
The probation period in Indonesia for permanent employees is on average 3 months.
Visa
Identify the type of visa that matches your purpose of travel. Common types include Tourist Visa, Business Visa, Social Visa, and more. The visa requirements and application process may differ for each type.
If you are eligible for Visa on Arrival (VoA), you can obtain a short-term visa upon arrival at certain Indonesian airports. Check if your nationality qualifies for VoA and its terms and conditions. Visa fees can vary depending on the visa type and your nationality.
Be aware of the visa expiration date and do not overstay. Overstaying can result in fines or other penalties.
VAT
The standard rate of VAT rate in Indonesia stands at 11.00%, and it is scheduled to rise to 12% effective from January 1, 2025.
