Hire Employees in Indonesia Without Setting Up a Company
Employ full-time staff in Indonesia in as fast as 5 business days. We become the legal employer, handle contracts, payroll in IDR, BPJS registration, THR, and all tax obligations — you manage your team.
What Is an Employer of Record in Indonesia?
An Employer of Record (EOR) is a local entity that legally employs workers in Indonesia on your behalf. RecruitGo's Indonesian entity becomes the legal employer — we sign the employment contract, register employees with BPJS (Indonesia's social security system), withhold and file income tax (PPh 21), and manage all mandatory labor reporting.
You retain full control over the employee's work, schedule, and responsibilities. They report to you, work on your projects, and function as part of your team. We handle everything that Indonesian employment law requires of an employer.
Without EOR: Setting up a PT PMA (foreign-owned company) typically takes 2 to 4 months. Under BKPM Regulation No. 5/2025, the minimum paid-up capital is IDR 2.5 billion (~USD 150,000), with a total investment plan exceeding IDR 10 billion (~USD 640,000) per business activity. See full EOR vs PMA comparison →
Who Should Use EOR in Indonesia?
What It Costs to Hire Through EOR in Indonesia
Your total cost has three components: the employee's gross salary, mandatory statutory contributions, and the EOR management fee.
| Component | Monthly (IDR) | Rate |
|---|---|---|
| Gross salary | 15,000,000 | — |
| BPJS Kesehatan (health) | 480,000 | 4% (capped at IDR 12M base) |
| JHT (old age savings) | 555,000 | 3.7% |
| JP (pension) | 221,726 | 2% (capped at IDR 11.09M) |
| JKK (work accident) | 36,000 | 0.24% (low risk) |
| JKM (death insurance) | 45,000 | 0.3% |
| THR provision | 1,250,000 | 8.33% (prorated monthly) |
| RecruitGo EOR fee | 1,633,773 | 10% of employer cost |
| Total monthly cost (incl. EOR) | ~19,221,499 | ~128% of gross |
* Rates based on 2026 regulations. JP contribution capped at IDR 11,086,300/month (effective March 2026). JKK rate shown is for low-risk industries (0.24%); rates range up to 1.74% depending on risk class. THR prorated monthly for budgeting. EOR fee is 10% of total employer cost (min USD 49.99, max USD 250). Use our EOR Cost Calculator for exact figures based on your salary.
How Hiring Works Through EOR
You tell us who you want to hire. We confirm salary, contract type (PKWT or PKWTT), location, and start date.
We draft a compliant employment contract, register the employee with BPJS Kesehatan and Ketenagakerjaan, and set up PPh 21 withholding.
We calculate and disburse salary, process all BPJS contributions, withhold and file PPh 21, and provide payslips. Before Lebaran, we calculate and pay THR.
We monitor regulatory changes — including the Omnibus Law (UU Cipta Kerja) and its implementing regulations — and adjust accordingly.
EOR vs PMA vs Contractors
| EOR | PT PMA | Contractor | |
|---|---|---|---|
| Time to first hire | 3–5 days | 2–4 months | Immediate |
| Setup cost | None | $5K–15K+ | None |
| Paid-up capital | None | IDR 2.5B (~$150K) | None |
| Total investment plan | None | >IDR 10B (~$640K) | None |
| Compliance risk | Handled by EOR | Your responsibility | High |
| Employee protections | Full | Full | None |
| Best for | Speed, compliance, no PMA needed | Permanent ops, local contracts | Short-term only |
⚠ Contractor warning: Indonesia has strict criteria for contractor relationships under PP 35/2021. If the person works set hours, reports to your managers, and does core business functions — that's legally an employee. Misclassification means backdated BPJS, tax penalties, and severance liability.
PKWT vs PKWTT: Contract Types in Indonesia
PKWT — Fixed-Term
Perjanjian Kerja Waktu Tertentu
PKWTT — Permanent
Perjanjian Kerja Waktu Tidak Tertentu
Income Tax (PPh 21)
Employers withhold income tax using the TER (Tarif Efektif Rata-rata) method, introduced in 2024. Monthly PPh 21 is filed by the 20th of the following month.
| Annual taxable income (IDR) | Rate |
|---|---|
| Up to 60 million | 5% |
| 60M – 250M | 15% |
| 250M – 500M | 25% |
| 500M – 5 billion | 30% |
| Above 5 billion | 35% |
BPJS: Indonesia's Mandatory Social Security
BPJS Kesehatan (Health Insurance)
5% of salary (4% employer, 1% employee), capped at IDR 12M/month salary base. Covers employee and up to 4 family members.
BPJS Ketenagakerjaan (Employment Insurance)
| Program | Coverage | Employer | Employee |
|---|---|---|---|
| JHT | Old-age savings | 3.7% | 2% |
| JP | Pension (capped at IDR 10.55M base) | 2% | 1% |
| JKK | Work accident | 0.24–1.74% | — |
| JKM | Death | 0.3% | — |
| JKP | Job loss (funded via JKK/JKM recomposition + govt) | — | — |
JKP note: The Job Loss Insurance program (0.36% of wages under PP 6/2025, reduced from 0.46%) is not an additional employer cost. It is funded through internal recomposition of JKK and JKM contributions (0.14% from JKK + 0.22% from government). Employers do not pay a separate JKP contribution.
Employee Benefits in Indonesia
* Sick leave is paid at reducing rates: 100% for first 4 months, 75% for months 4–8, 50% for months 8–12. Paternity leave is 2 days under the Manpower Law, with an additional 3 days under Law 4/2024 (Mother and Child Welfare Law), totalling up to 5 days.
Severance (Pesangon) in Indonesia
Termination is complex and expensive. Employers cannot unilaterally fire — bipartite negotiation and potentially the Industrial Relations Court are required.
| Years of service | Pesangon (months of salary) |
|---|---|
| < 1 year | 1 month |
| 1–2 years | 2 months |
| 2–3 years | 3 months |
| 3–4 years | 4 months |
| 4–5 years | 5 months |
| 5–6 years | 6 months |
| 6–7 years | 7 months |
| 7–8 years | 8 months |
| 8+ years | 9 months |
Total termination cost can reach 15+ months of salary including UPMK (long-service pay) and UPH (entitlement compensation). Your EOR manages this by setting aside monthly severance provisions.
Work Permits & Visas
Indonesian nationals hired through EOR need no work permits — only standard registration. For foreign employees, Indonesia requires:
Counterpart requirement: Each foreign worker must have an assigned Indonesian counterpart (pendamping) for knowledge and skills transfer. The employer must document this transfer process, and failure to comply can result in RPTKA revocation.
Frequently Asked Questions
The total cost is your employee's gross salary plus statutory contributions (~10–11% for BPJS), THR provisions (8.33% monthly), a severance reserve, and the EOR management fee. For a mid-level Jakarta role at IDR 15M/month, total loaded cost is approximately IDR 19–20M.
Typically 3–5 business days from signed agreement to the employee's official start date. This compares to 2–4 months for setting up your own PT PMA.
No. RecruitGo's Indonesian entity becomes the legal employer, so you don't need your own. You can operate in Indonesia immediately.
Yes, but it requires additional steps: an RPTKA (foreign worker plan), KITAS (work visa), and DKP-TKA compensation fund payment of USD 100/month. There is also a 1:10 ratio requirement. We handle the full process.
Through our parent company Emerhub Group, we set up your PT PMA and transfer all employees to your own entity. Most companies start with EOR for 2–12 months before transitioning.
Yes. THR (Tunjangan Hari Raya) is a mandatory religious holiday bonus equal to one month salary for employees with 12+ months of service, or prorated for shorter tenure. It is paid at least 7 days before the religious holiday.
