Currency
Indonesia Rupiah (IDR)
EOR IN Indonesia
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A guide to employing and growing your team in Indonesia
Fast and compliant market entry. Hire top local talent without the need for a legal entity
Indonesia is the largest economy in Southeast Asia, driven by a young, tech-savvy workforce and a rapidly expanding middle class. The country is a global hub for manufacturing, palm oil, and mining, while also becoming a significant player in the digital economy and startup ecosystem. The labor market is governed primarily by the Manpower Law No. 13/2003 and the Omnibus Law (Job Creation Law), which recently introduced reforms to streamline hiring and termination while maintaining core employee protections. Indonesia does not have a single national minimum wage; rates are set annually by provincial and district governments. For 2026, the provincial minimum wage in Jakarta is approximately IDR 5,729,876 per month, while rates in other provinces like Bali are around IDR 3,207,459.
Employer Contributions
Social Security (BPJS – Jamsostek & Health):
Pension: 2%
Old Age Security: 3.7%
Health Insurance: 4%
Work Accident Insurance: 0.24% – 1.74% (industry-based)
Death Benefit: 0.3%
Total Employer Contribution: ~10% to 12%
Employee Payroll Taxes
Pension: 1%
Old Age Security: 2%
Health Insurance: 1%
Total Employee Contribution: ~4%
Employee Income Tax Rates
Up to IDR 60,000,000: Taxed at 5%
Over IDR 60,000,000 to IDR 250,000,000: Taxed at 15%
Over IDR 250,000,000 to IDR 500,000,000: Taxed at 25%
Over IDR 500,000,000 to IDR 5,000,000,000: Taxed at 30%
Over IDR 5,000,000,000: Taxed at 35%
Statutory Leave
In Indonesia, employees are entitled to a minimum of 12 days of annual leave after completing 12 months of service. Public holidays typically range from 15 to 16 days annually, with the exact number varying each year. Leave cannot always be carried forward unless specified by company policy.
Pregnancy and Maternity Leave
In Indonesia, female employees are entitled to 3 months of maternity leave, with 1.5 months before childbirth and 1.5 months after childbirth. The leave is fully paid by the employer.
Paternity Leave
In Indonesia, male employees are entitled to 2 days of paid paternity leave, which may be extended based on company policy.
Work-Related Injury Leave
In Indonesia, parental or family leave may be granted for family-related events such as marriage or child baptism, as per labor law. Additional leave types include marriage leave (3 days), bereavement leave (2-3 days, depending on the relation), and menstrual leave (2 days per month, typically for the first and second day, if required). Sick leave is paid with medical proof, and its duration depends on the condition. Work injury leave is covered under BPJS employment insurance. Religious leave may be granted for pilgrimage (e.g., Hajj).
Termination Process
Termination in Indonesia must follow legal procedures under labor laws. Employers are generally required to provide valid reasons and, in many cases, obtain agreement from the employee or approval from industrial relations bodies. Severance payments are mandatory and depend on length of service, reason for termination, and applicable regulations.
Notice Period
Typically 30 days’ notice or payment in lieu
Specific terms may vary based on employment contract
Probation Period
Allowed only for permanent employees. Maximum 3 months. Must be clearly stated in the employment contract