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Employer of Record (EOR) in Indonesia

What you'll learn

  • Country Introduction
  • Employment Terms
  • Minimum Wage and Working Hours
  • Statutory Leave Laws
  • Termination Process
  • Additional Information
Indonesia Introduction

Indonesia is an island country in Southeast Asia between the Indian Ocean and Pacific Ocean. The country consists of over 17,000 islands, including Sumatra, Bali, Java, Sulawesi, and parts of Borneo and New Guinea — more than half of the population lives in Java, which is the world’s most populated island. Indonesia is the only G20 member in Southeast Asia, and has the largest economy in the region.

Employment Terms

The minimum wage requirement in Indonesia is around IDR 4,600,000. Working hours are 40 hours per week, either 7 hours a day for 6 days per week, or 8 hours per day for 5 days a week. Overtime is regulated by the contract or collective agreements, with a maximum of 18 hours per week. Overtime is paid at between 150% and 400% of the regular salary.

Types of Leave

Parental Leave

Pregnant employees are entitled to 3 months of paid maternity leave, usually split as 6 weeks before and 6 weeks after. The leave is paid at the full salary. Fathers are entitled to 2 days of leave for the birth of their child.

Sick Leave

Employees are entitled to paid sick leave as long as they can provide medical proof. The leave can last for 1 year if the sickness persists. Sick leave payments are as follows:

  • 100% in months 1-4
  • 75% in months 5-8
  • 50% in months 9-12
  • 25% until reinstatement/termination

Paid Leave

There are 16 public holidays in Indonesia, and employees are entitled to at least 12 days of paid time off after 1 year at their company. Once an employee reaches 6 years at their company the leave becomes 1 month, and after 8 years it becomes 2 months.

Employees can also request paid leave for their bereavement or their children’s special occasions, such as baptism, circumcision, or marriage.

Termination Process


Before reaching the decision to terminate an employee, the employer has to make a genuine effort to avoid the termination by negotiating with the employee. They need to try to find an accommodation such as coaching, a change in working hours, or better working methods.

If this has been done and termination still cannot be avoided, the employer must explain the reasons for termination in writing and provide notice. If the employee who has been dismissed believes the termination is unjust, they can challenge the decision in the Labor Court, who will give the final ruling.

Notice Period

Notice periods are generally 30 days, but employers can determine longer notice periods within their employment contracts.

Severance Pay

Severance pay is determined by how long the employee has worked at the company:

  • 0-1 years = 1 month wages
  • 1-2 years = 2 months wages
  • 2-3 years = 3 months wages
  • 3-4 years = 4 months wages
  • 4-5 years = 5 months wages
  • 5-6 years = 6 months wages
  • 6-7 years = 7 months wages
  • 7-8 years = 8 months wages
  • 8+ years = 9 months wages

Employees who resign and have at least 5 years of tenure are entitled to separation pay that is determined in their employment agreement and/or labor agreements.

Additional Information

Indonesia has a mandatory holiday bonus made before called the Tunjangan Hari Raya (THR) bonus, paid out before the longest religious holiday in Indonesia.

Indonesian Rupiah (IDR)
Capital City:
275 Million
Cost of Living Rank:
VAT (Valued Added Tax):
Employer TaxES
10.24% - 11.74%

★  0.24%-11.74% - Work Accident Insurance

★  3.7% - Old Age Insurance

★  0.3% - Death Insurance

★  2% - Pension

★  4% - Health Insurance

Get Started in 3 Steps


Remote candidate

You've sourced a full-time employee or contractor located in a country where your company is not incorporated.


Cost Calculation

Pass us the details of your candidate and we will let you know exactly what it costs to employ your candidate in that country.


Onboarding & Admin

Sit back and relax as we onboard your new team member and take care of all the local compliances and admin work.

Same-day onboarding
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Available in 180+ countries
How Remofirst employs in Indonesia

It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.

How employees in Indonesia get paid
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. Remofirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees in Indonesia are paid on time in Indonesian Rupiah (IDR). To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Full-time Employees vs Global Contractors

Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.

Dependable support for employees
Whenever the employee or employer has a question about benefits, Visas, or anything else related to international employment in Indonesia, they can speak with our customer support team to get answers from our team of experts.