Hire employees and contractors in Indonesia
Outstaffer’s guide to employing in Indonesia.
Facts & stats
Officially the Republic of Indonesia, Indonesia is a conglomerate of 17,000 islands, and is simultaneously the world’s 4th most populous nation and Southeast Asia’s most powerful economy, with a GDP valued at over $3.5 trillion.Home to over 1,300 ethnic groups and 700 languages, Indonesia hosts one of the world’s most ethnically diverse population, its second-most biologically diverse, and a history of record economic growth over the past two decades.
- Capital city
- Jakarta
- Currency
- Indonesian rupiah (Rp, IDR)
- Official Languages
- Indonesian
- Population size
- 267,670,543 (est. 2018)
- Ease of doing business
- Easy
- Cost of living index
- 37.44 (2021)
- Payroll frequency
- Monthly
- VAT - standard rate
- 10%
- GDP - real growth rate
- 10% (2019)
Tech Talent in Indonesia
Indonesia is emerging as a dynamic hub for tech talent in Southeast Asia. The country boasts a rapidly growing community of skilled software developers, engineers, and IT professionals. Indonesian universities are producing graduates with a strong technical foundation, and cities like Jakarta and Bandung are experiencing a surge in tech startups and innovation hubs. Indonesia's youthful population, coupled with a thriving digital economy, makes it an attractive destination for tech companies and entrepreneurs. Indonesian tech talent is known for its innovation and adaptability, playing a pivotal role in shaping the country's position as a significant player in the regional and global tech industry.
Grow your team in Indonesia with Outstaffer
Looking to employ workers in Indonesia? Companies hiring in Indonesia must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.
Outstaffer can employ your team in Indonesia on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Indonesia team. You can also pay contractors now in Indonesia with Outstaffer.
Minimum wage
Indonesian minimum wage rates are fixed at the provincial level and are reviewed annually. Currently, the minimum wage ranges from IDR 1,704,608 ($117.65) to IDR 4,276,349 ($295.15) per month in Jakarta, the capital city.
Payroll cycle
All employee payments are made bi-monthly by Outstaffer.com on your behalf and passed through to you.
Onboarding time
We can help you get a new employee started in Indonesia fast. The minimum onboarding time we need is only 19 working days.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Outstaffer platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. We have a payroll cut-off date of the 10th of the month unless otherwise specified.
Employing in Indonesia
Indonesia’s Labor Law of 2003 is the principal labor regulation that defines provisions for employee protections and workers’ rights at the federal level which are applicable to Indonesia’s workforce of 4.2 million.
Employees in Indonesia enjoy protections against discrimination based on age, religion, gender expression, and race.
Common questions that could come up during the hiring process include the minimum wage, overtime rates, and guaranteed paid time off.
To employ workers in Indonesia, contact Outstaffer to learn more about your options.
Risks of misclassification
Public holidays
Jan 1
New Year's Day
Feb 12
New Year (Tahun Baru Masehi)
Apr 23
Eid Al-Fitr. (Hari Raya Idul Fitri)
Jul 19
Islamic New Year (Tahun Baru Islam)
Jan 22
Chinese New Year (Tahun Baru Imlek)
Nov 27
International Labor Day (Hari Buruh Internasional)
Feb 18
Isra Mi’raj (Prophet’s Muhammad Ascension)
May 18
Ascension of Jesus Christ (Kenaikan Yesus Kristus)
Sep 28
Birthday of Prophet Muhammad
Mar 22
the Holy Day of Silence (Hari Suci Nyepi)
Jun 1
Pancasila Day (Hari Lahir Pancasila)
Dec 25
Christmas Day (Hari Raya Natal)
Apr 7
Good Friday (Wafat Yesus Kristus)
Jun 4
Vesak Day
Apr 22
Eid Al-Fitr (Hari Raya Idul Fitri)
Jun 29
Eid al-Adha (Hari Raya Idul Adha)
Competitive benefits package in Indonesia
Outstaffer supports our clients by offering competitive benefits packages that will help you attract and retain the best talent across the globe!
Our benefits specialists have done the research on norms and requirements in each local market and have crafted packages that will allow your employees to thrive, no matter what country they live in.Our benefits packages in India are tailored to fulfil the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Private health insurance
Supplemental dental insurance
Supplementary vision insurance
Supplemental maternity insurance
Supplemental screening & vaccine insurance
Additional paid holidays
Flexible work schedule
Employee engagement funds
Taxes in Indonesia
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Indonesia.
Employer taxes
Work accident insurance 2%
Pension contribution 3.7%
Old Age 4%
Health insurance 0.3%
Death benefit contribution
Types of leave
Statutory leave
Salaried employees in Australia are entitled to four weeks of paid annual leave each year. Shift workers receive an additional week of paid leave, for a total of five weeks per year.
Parental and maternity leave
Salaried employees in Australia are entitled to four weeks of paid annual leave each year. Shift workers receive an additional week of paid leave, for a total of five weeks per year.
Paid parental and maternity leave
Salaried employees in Australia are entitled to four weeks of paid annual leave each year. Shift workers receive an additional week of paid leave, for a total of five weeks per year.
Partner/paternity leave
Salaried employees in Australia are entitled to four weeks of paid annual leave each year. Shift workers receive an additional week of paid leave, for a total of five weeks per year.
Parental leave
Salaried employees in Australia are entitled to four weeks of paid annual leave each year. Shift workers receive an additional week of paid leave, for a total of five weeks per year.
Other leave
Salaried employees in Australia are entitled to four weeks of paid annual leave each year. Shift workers receive an additional week of paid leave, for a total of five weeks per year.
Employment termination
Termination process
Indonesian labor law is unique in that it places the onus on employers to go the extra mile to avoid terminating an employee by negotiating to offer better working conditions, coaching, etc.
That aside, employee contracts can be terminated if a just cause is established, such as dishonesty, negligence, fraud, work-related offenses, sustained illness over the course of 12 months, or business contingencies like redundancy or insolvency.
Notice period
There is no notice stipulated notice period but employers are generally expected to provide 30-days advance notice before terminating an employee.
Probation periods
Probationary periods can only be set for employees on indefinite-term contracts and cannot exceed three months.
Severance pay
Employees are entitled to severance pay that’s proportional to their tenure with an employer as defined below:
- 1 months wages: Up to 1 year of employment
- 2 months wages: Up to 1 year, but less than 2 years of employment
- 3 months wages: Up to 2 years, but less than 3 years of employment
- 4 months wages: Up to 3 years, but less than 4 years of employment
- 5 months wages: Up to 4 years, but less than 5 years of employment
- 6 months wages: Up to 5 years, but less than 6 years of employment
- 7 months wages: Up to 6 years, but less than 7 years of employment
- 8 months wages: Up to 7 years, but less than 8 years of employment
- 9 months wages: 8 or more years of employment
Get started with Outstaffer in three easy steps
01. Book a call or sign up
Book a call with one of our Solutions Managers or create your free account. It’s quick, easy, and you’ll be ready to get started in minutes.
02. Add your people
From new hires to your existing team, onboard them seamlessly with our simple-to-use self-serve platform
03. Dedicated onboarding
Our dedicated team is here to guide you every step of the way ensuring you’re confident, supported, and set up for success.