Quick facts
Indonesia's economy is one of the largest in Southeast Asia, heavily relying on manufacturing, services, and natural resources. The country has a diverse workforce and a mix of traditional and modern labor practices. Below are key employment specifics to consider when hiring or working in Indonesia.
In Indonesia, employment contracts are typically classified into two types:
The probation period for indefinite-term employment contracts is typically up to three months. Fixed-term contracts do not include a probation period, making the termination process simpler.
Standard working hours are either 7 hours per day for a 6-day workweek, or 8 hours per day for a 5-day workweek, with a maximum of 40 hours per week. Overtime is compensated based on the employee's monthly wage:
Employees are entitled to 12 days of annual leave after completing 12 consecutive months of work. If not taken within the year, these days are forfeited. Additional leave includes 3 days for the employee’s marriage and 2 days for the marriage of a child.
Sick leave is paid as follows:
Salaries are generally paid weekly, bi-weekly, or monthly, but must be paid by the end of the month. The minimum wage varies by province, for example:
14 public holidays in Indonesia include:
Additionally, Islamic holidays like Idul Fitri and Idul Adha are widely observed.
Employers contribute to social security, including:
The maximum salary for certain contributions is capped at IDR 8,512,400 per month, with varying rates.
Employees are taxed based on their income, with individual rates as follows:
In addition, employees contribute to social security programs like health care (1%), pension (1%), and old-age benefit (2%).
A 30-day notice period is required to terminate an employment contract in Indonesia, as governed by the Labour Law.
Severance pay varies depending on the contract type:
International EOR (Employer of Record) and PEO (Professional Employer Organization) are services that enable businesses to compliantly hire, manage, and pay employees in foreign countries without the need for establishing a legal entity. EOR acts as the legal employer while PEO co-employs workers, handling administrative tasks such as payroll, taxes, and benefits.
Acvian does not handle time record submissions directly. It is the client’s responsibility to track and submit employee work hours. However, Acvian can offer guidance and best practices to ensure efficient time tracking and compliance with local labor laws.
Employees can view their payroll details through the monthly payslips they receive and also via our Acvian platform. These payslips contain information on earnings, deductions, taxes, and net pay, giving employees a clear overview of their monthly payroll. Please note that in some countries, employers are restricted from viewing payslips due to data protection regulations, and only employees can share their payslips. For more details on these regulations, please contact our specialists.
Acvian addresses payroll disputes promptly, working closely with both the client and the employee to investigate and resolve any issues.
Yes, Acvian requires advanced monthly payments for salaries and service to ensure timely and accurate payroll processing.
Yes, Acvian can provide consultations regarding labor and tax legislation. Our team of experts is well-versed in local regulations and can offer guidance to help your business maintain compliance, reduce risk, and navigate the complexities of international employment and taxation laws.
Acvian provides a diverse range of benefits, including but not limited to:
We can customize and offer many kinds of benefits requested by the client, ensuring that your employees receive the support and perks that align with your company culture and local regulations.
Acvian can provide private health insurance options as part of its comprehensive employee benefits package.
The monthly/yearly costs for an ‘average’ package vary depending on the specific plan and location. See our estimated price packages here. Acvian’s team can provide detailed cost breakdowns based on your requirements.
While Acvian doesn’t directly provide entity set-up services, we can introduce you to local lawyers who specialize in this area to assist you with your needs. See also, when it's better to set the entity or use the EOR.
Offboarding is managed by Acvian in a structured and compliant manner. We coordinate with your business to ensure all necessary documentation, exit interviews, and final payments are completed. Acvian also ensures adherence to local labor laws and regulations, including providing any required notice periods and managing the termination process.
Businesses typically need EOR and PEO services when they:
Yes, Acvian is fully compliant with GDPR regulations. We collect and process personal data in accordance with the law, ensuring that data is used only for general, allowed purposes such as marketing and other legitimate business activities.
Acvian can supply EOR services in over 180 countries, encompassing almost all European nations, the United States, and Canada, providing extensive coverage to support your business’s global expansion and workforce management needs. See our coverage here.
Under EOR, Acvian manages the payroll process by:
Explore the details here.
Yes, Acvian provides comprehensive support for expatriate EOR workers, including:
Explore in details here.
Expats support from Acvian encompasses a range of services designed to facilitate a smooth transition for employees working abroad. Key aspects include:
After onboarding, Acvian maintains an ongoing relationship with your business and employees, ensuring smooth payroll processing, managing tax and regulatory compliance, handling benefits administration, and providing support for any changes or issues that may arise in the employment lifecycle. This allows you to focus on your core business operations while Acvian manages your international workforce.
The onboarding process typically takes between 2 to 4 weeks, depending on the country and complexity of the employee’s situation. However, Acvian strives to expedite this process, ensuring a smooth and efficient transition for your personnel. See our story of the urgent employment project.
Yes, Acvian provides in-country or regional support for employee inquiries and assistance requests. We have dedicated managers in the countries where we support your employees, ensuring prompt and knowledgeable assistance tailored to local regulations and practices.
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