Indonesia is the world’s largest island country with more than 270 million people. The official language is Indonesian, but there are more than 700 regional languages spoken across the country. Setting up payroll and maintaining compliance can be challenging, but here are a few things to know before you get started.

Payroll and Tax Regulations

  • The currency is the Indonesian Rupiah (IDR)
  • Minimum wages vary by region. The current minimum wage in Jakarta is IDR 4,416,854
  • Income tax ranges from 5% – 25% depending on income level
  • Mandatory payroll contributions for employees include old age, pension, and healthcare
  • There is a religious holiday bonus each year for Tunjangan Hari Raya, which is paid prior to the holiday

HR/Statutory Requirements

  • Overtime is paid at 100% for the first hour, and 200% for each subsequent hour
  • Paid time off is 12 days of annual leave after 1 year of service, up to 1 month of leave after 6 consecutive years of service
  • Female employees are given 3 months of maternity leave prior to the estimated delivery date and 1.5 months after delivery, paid at 100% of the regular salary
  • Fathers are provided with 2 days of paternity leave after the birth of a child
  • Severance pay can range from 1-9 months based on the length of service with the company
  • Visa exemptions are provided for 169 countries including the US

Holidays in Indonesia

  • New Years Day – January 1
  • Lunar New Year – February 1
  • Prophet’s Ascension – February 28/March 1
  • Good Friday – April 15
  • Lebaran – April 9-May 6
  • Labour Day – May 1
  • Vesak – May 16
  • Ascension Day – May 26
  • Pancasila Day – June 1
  • Ed Al-Adha – June 9
  • Islamic New Year – July 30
  • Independence Day – August 17
  • Mawlid – October 7
  • Christmas – December 25

To get started in Indonesia, or to simplify operations there, talk to our team. Our cloud-based payroll platform with customized reporting gives you real-time access to your payroll across countries and currencies. Our global expansion team is here to help get compliance under control and as regulations evolve you get automated updates. Click here to learn more about payroll and compliance in Indonesia.