Employment agreements can be for fixed term or open ended. According to the Labor Code, fixed term contracts must be in writing and in Indonesian language using Latin alphabet.
It is important if the contract must be also in another language, that the translation matches the Indonesian version as in case of a dispute, the Indonesian version is considered to be right. If the contract is open ended, the parties can agree to the terms and conditions orally. However it is common practice to have a written contract in any case.


Salaries are paid monthly. Paydays vary depending on the employer.

HR & Labor

Full time employment is considered 40 hours per week. Employees work either six days a week, seven hours per day or five days a week, eight hours a day.
Employees are entitled to work maximum of three hours of overtime per day or fourteen hours a per week. Overtime is 1/173 per hour of their regular monthly wages.After working four consecutive hours, employee is entitled to 30 minutes of break.


Employee must obtain a VITAS (limited stay visa) which gives them the right to work in Indonesia.
The visa lasts from six months to two years. The employee has seven days upon arrival to apply for the permit at the Immigration Office.

Minimum Wage

There is no official national minimum wage. It is decided individually in each of the provinces.

Public Holidays

August 17: Independence Day
September 1: Idul Adha
September 21: Muharram
December 01: Maulidur Rasul
December 25: Christmas Day

January 01: New Years Day
February 16: Chinese New Year
March 17: Bali's Day of Silence and Hindu New Year
March 30: Good Friday
April 14: Ascension of the prophet Muhammad
May 01: Labour Day
May 10: Ascension Day of Jesus Christ
May 29: Waisak Day
June 01: Five principle Day
June 13: Shared Leave by Government Decree
June 14: Shared Leave by Government Decree
June 15: Idul Fitri
June 16: Idul Fitri
June 18: Shared Leave by Government Decree
June 19: Shared Leave by Government Decree
August 17: Indonesian National Independence Day
August 22: Idul Adha
September 11: Islamic New Year
November 20: Birthday of the Prophet Muhammad
December 24: Shared Leave by Government Decree
December 25: Christmas Day

Pension Fund

The government regulations on BPJS-TK programs (effective 1 July 2015) provided information on
pension contribution rates and other details regarding pension, work accident, death, and old age insurance programs.

These were finally signed and issued by President Jokowi on 30 June 2015.

The highlight is the new pension insurance program (2% from the employers and 1% from the employee, with a max salary cap of IDR 7,000,000/month).

The employer contributes:
Work accident - 0.24% - 1.74% (depending on the industry)
Death / life insurance - 0.3%
Old age - 3.7%
Pension - 2%
Health - 4%

The employee contributes:
Work accident - none
Death / life insurance - none
Old age - 2%
Pension - 1%
Health - 1%

Severance Payments

The amount of severance pay varies depending on the type of dismissal. If the employee was dismissed with a cause they are entitled to one month’s average wages as severance pay and service appreciation pay which includes two month's’ salary for the first three years in the company. Afterwards for every three years in the company, one month’s average salary is added to the service appreciation pay up to 24 years.
If the employee is dismissed without a cause, they receive two times the average severance payments.

Advance Notice

Employees are expected to provide a written termination letter and one months notice.

Termination Procedure

To terminate an an employee, employers should provide a written termination letter and one months notice or one months pay.

Employer can terminate an employee with or without a cause. Also if the employee has been unable to work for over six months due to legal reasons, the employer can terminate them. Employers can also terminate employees if they have been absent without a reason for over five working days.

Sick Days

Employees who provide a written statement from a doctor of their illness are entitled to receive
- 100% of wages the first 4 months of illness
- 75% of wages from 4-8 months of illness
- 50% of wages from 8-12 months of illness
- 25% of wages from 12th month of illness

Vacation Days

Employees have twelve days of vacation after working in the company for one consecutive year.

Additional Employee Withholdings

1) Health Care
2) Work Accidents
3) Provident Fund
4) Death Benefit

1) Employer contributes 3%.
2) Employer contributes between 0.25 - 0.75%.
3) Employer contributes 3.7%
4) Employer contributes 0.3%

1) Employee contributes 2%.
2) Employee contributes 0%
3) Employee contributes 2%
4) Employee contributes 0%


VAT is 10% standard rate.