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Remote’s guide to employing in Indonesia.
Remote-Owned Local Entity
We own our own entity in the countries where we operate to shield your company from risk and provide you and your employees with the signature Remote experience.
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.
267,670,543 (est. 2018)
Ease of doing business
Cost of living index
VAT - standard rate
GDP - real growth rate
Companies have two broad options to legally employ in Indonesia. Either the organization must own a local entity in the country, or work with a global employment solution like Remote that fully owns its own legal entities in every country of operation. Managing payroll, benefits, taxes, and compliance in Bolivia can get complicated, especially without established local relationships.
Remote’s team of global HR experts make it easy for companies to employ workers in Indonesia with speed, security, and in full compliance with all applicable labor laws. We make sure you team members get paid accurately and on time. We also take on the responsibility and legal risks of international employment so you can focus on hiring great talent and growing your business.
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. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Indonesia.
Below are national public holidays applicable for all regions in this country. Remote customers have access to a detailed list of regional public holidays within the Remote platform. Sign up now to access all public holiday information.
|Saturday, January 1, 2022||New Year's Day|
|Tuesday, February 1, 2022||Chinese New Year|
|Monday, February 28, 2022||Isra 'Mi'raj (Ascension Day) of Prophet Muhammad|
|Thursday, March 3, 2022||Nyepi Day|
|Friday, April 15, 2022||Good Friday|
|Sunday, May 1, 2022||Labour Day|
|Monday, May 2, 2022||Eid Al-Fitr|
|Tuesday, May 3, 2022||Eid Al-Fitr|
|Monday, May 16, 2022||Waisak Day|
|Thursday, May 26, 2022||Ascension Day of Christ|
|Wednesday, June 1, 2022||Pancasila Day|
|Saturday, July 9, 2022||Eid Al-Adha|
|Saturday, July 30, 2022||Islamic New Year|
|Wednesday, August 17, 2022||Independence Day|
|Saturday, October 8, 2022||Birthday of Prophet Muhammad|
|Sunday, December 25, 2022||Christmas Day|
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.
For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.
At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).
Our benefits packages in Indonesia are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Learn how employment taxes affect your payroll and your employees’ paychecks in Indonesia.
0.24% - 1.74% - Work accident insurance
3.7% - Old Age
0.3% - Death benefit contribution
2% - Pension contribution
4% - Health insurance
2% - Old Age
1% - Pension
1% - Health Insurance
5% - Up to IDR 50M ($3450.55)
15% - 50M – 250M ($3450.55 - $17252.72)
25% - 250M – 500M ($17252.72 - $34505.45)
30% - Over 500M (Over $34505.45)
Employees who have worked for an employer for at least 12 months consecutively are entitled to 12 days of paid annual leave. Employers are obligated to respect any provisions pertaining to leave entitlement stipulated in an employee’s contract or negotiated under a collective bargaining agreement.
Employees are entitled to 15 public holidays off annually and must be compensated if required to work on a holiday. Employees who’re expected to a work on a public holiday will have their compensation structured as follows:
Indonesian labor laws offer essentially unlimited sick leave that extends until an employee is fully recovered or the term of the employment contract elapses. Over the course of an employee’s illness, they’re entitled to 100% of their wages for the first four months, 50% of their wages for the next four months, and 25% of their normal wages until the employee recovers.
Female employees are entitled to three months of paid maternity leave, starting six weeks before delivery.
Fathers can take two paid days off work after their partner’s delivery.
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.
There is no notice stipulated notice period but employers are generally expected to provide 30-days advance notice before terminating an employee.
Employees are entitled to severance pay that’s proportional to their tenure with an employer as defined below:
Probationary periods can only be set for employees on indefinite-term contracts and cannot exceed three months.