🇮🇩 Indonesia · Employment & Labor
Hiring rules, employment contracts, payroll, social insurance, and EOR options.
Quick answer
Indonesian employment under the Manpower Law (as amended by the Job Creation Law) sets provincial minimum wages, a 40-hour week, 12 days' annual leave, and a religious-holiday allowance (THR). Severance follows a statutory formula; BPJS covers health and employment insurance, and disputes go to the Industrial Relations Court.
Indonesia employment is governed by labour rules, regional wage floors, payroll withholding, BPJS social security and immigration compliance for foreign workers. Employers should treat provincial/local wage and permit checks as location-specific.
- Indonesia does not use one single national minimum wage for payroll planning; UMP/UMK floors are set by province and city/regency.
- Formal employment usually connects workers to BPJS Ketenagakerjaan employment programmes and BPJS Kesehatan health coverage.
- Foreign-worker roles must match the manpower and immigration basis approved for the worker.
Step-by-step
- 1
Get a written contract
Get a written contract (permanent PKWTT or fixed-term PKWT); fixed-term contracts are limited to defined work.
- 2
Know your pay and hours rights
You must receive at least the applicable provincial/sectoral minimum wage; the standard is 40 hours a week, with overtime pay.
- 3
Understand leave and THR
You are entitled to 12 days’ annual leave after a year, plus the religious-holiday allowance (THR) paid before the main religious holiday.
- 4
Register for BPJS
You are enrolled in BPJS Health and BPJS Employment (covering work accidents, old age, pension and death).
- 5
Know severance and termination rules
Termination follows set procedures, with severance, service-appreciation and compensation pay calculated under the statutory formula.
- 6
Resolve disputes at the Industrial Relations Court
Attempt bipartite/mediation first, then the Industrial Relations Court.
Checklist
- Written contract (PKWTT / PKWT)
- Provincial/sectoral minimum wage
- 40-hour week + overtime pay
- 12 days' annual leave + THR
- BPJS Health + BPJS Employment
- Statutory severance formula on termination
- Anti-discrimination protections
- Dispute route (bipartite/mediation → Industrial Relations Court)
Official authorities
- Kemnaker
Official labour ministry portal for employment rules and notices.
- BPJS Ketenagakerjaan
Official employment social-security institution.
- BPJS Kesehatan
Official national health-insurance institution.
Frequently asked questions
What is THR?
Tunjangan Hari Raya is a mandatory religious-holiday allowance, usually equal to a month's pay, paid before the main religious holiday.
Is the minimum wage national?
No — minimum wages are set provincially (and sometimes by sector), so they vary across Indonesia.
How is severance calculated?
By a statutory formula combining severance pay, service-appreciation pay and compensation, based on years of service.
Official-information aggregation, not legal advice. Always verify on the authority's own site.