Easily Hire, Manage, and Pay Your Employees in Indonesia
RecruitGo's Employer of Record service in Indonesia enables employers to hire top Indonesian talent quickly and compliantly — without the cost and delay of setting up a PT PMA. You focus on growth; we handle BPJS, PPh 21, and labor law compliance.
Why Foreign Companies Hire in Indonesia
Indonesia is the fourth most populous country in the world and the largest economy in ASEAN. GDP growth has held steady at around 5% annually, driven by domestic consumption, a booming digital economy, and government investment in infrastructure and manufacturing. The workforce is young (median age 29), increasingly skilled in technology, and concentrated in major cities like Jakarta, Surabaya, Bandung, and Yogyakarta.
For foreign companies, Indonesia offers competitive labor costs, access to Southeast Asia's largest domestic market, and a growing pool of English-proficient professionals in tech, BPO, finance, and creative industries.
How RecruitGo Helps You Hire in Indonesia
Whether you need to hire your first employee without a local entity, run payroll for an existing Indonesian team, manage employee benefits, or relocate staff to Indonesia, RecruitGo has a specific service for each stage.
Employer of Record (EOR)
Hire employees in Indonesia without setting up a PT PMA. RecruitGo is the legal employer, handling contracts, BPJS registration, payroll, THR, and all compliance.
Payroll Service
Already have a PT PMA? We process monthly payroll in IDR, calculate PPh 21 withholding, remit all BPJS contributions, and file with the tax office on your behalf.
Employee Benefits
Design and administer benefit packages that meet Indonesian statutory requirements and attract top talent.
Visa and Relocation
Bringing foreign staff to Indonesia requires RPTKA approval, work permits, and KITAS. We manage the full immigration process.
Indonesia Employment Snapshot
A quick-reference table covering the essentials of hiring employees in Indonesia.
| Currency | Indonesian Rupiah (IDR) |
| Minimum wage (2025) | Varies by province. Jakarta: IDR 5,396,000/month. National average ~IDR 3.3M |
| Standard working hours | 40 hours/week (8 hrs x 5 days or 7 hrs x 6 days) |
| Overtime | Up to 4 hrs/day, 18 hrs/week. Rate: 1.5x first hour, 2x subsequent |
| Probation period | 3 months maximum (indefinite contracts only) |
| Contract types | PKWT (fixed-term, max 5 years) and PKWTT (indefinite-term) |
| Annual leave | 12 working days after 12 months of continuous service |
| Sick leave | Fully paid. Degressive: 100% (months 1-4), 75% (5-8), 50% (9-12), 25% (after 12) |
| Maternity leave | 3 months fully paid (1.5 before, 1.5 after birth) |
| THR (religious bonus) | 1 month salary, paid at least 7 days before religious holiday |
| Income tax (PPh 21) | Progressive: 5% (up to IDR 60M), 15%, 25%, 30%, 35% (above IDR 5B) |
| Social security | BPJS Kesehatan (health) + BPJS Ketenagakerjaan (JHT, JP, JKK, JKM) |
| Severance | Up to 9 months salary based on tenure + long service pay + compensation rights |
| Public holidays | ~15 national holidays per year |
| Language requirement | Contracts must be bilingual (Bahasa Indonesia + foreign language) |
How to Hire Employees in Indonesia as a Foreign Company
Foreign companies have three main options for hiring in Indonesia. The right choice depends on your timeline, headcount, budget, and long-term commitment to the market.
| EOR (RecruitGo) | PT PMA (Own Entity) | Contractor | |
|---|---|---|---|
| Time to first hire | 3 to 5 business days | 3 to 6 months | Immediate |
| Setup cost | None | IDR 2.5B min (~USD 150K) | None |
| Who handles compliance? | RecruitGo | You | Contractor's responsibility |
| BPJS registration | Handled by RecruitGo | Your responsibility | Not applicable |
| Severance liability | Managed by RecruitGo | Your liability | None (misclassification risk) |
| Ideal for | 1-15 employees, market testing | 15+, permanent operations | True project work |
PT PMA minimum capital reduced in October 2025: Under BKPM Regulation 5/2025, the minimum paid-up capital dropped from IDR 10 billion to IDR 2.5 billion (~USD 150,000). This makes entity setup more accessible, but the compliance overhead remains significant. Compare EOR vs entity in detail
Key Employment Rules in Indonesia
Contract types
Indonesia has two contract types. PKWT (fixed-term) for specific projects, seasonal work, or new activities — max 5 years. PKWTT (indefinite-term) with up to 3 months probation. All contracts must be in Bahasa Indonesia. If bilingual, the Indonesian version prevails in disputes.
Social security (BPJS)
All employees must be registered with BPJS Kesehatan (health, 4% employer + 1% employee) and BPJS Ketenagakerjaan covering four programs: JHT (3.7% + 2%), JP pension (2% + 1%, capped), JKK work accident (0.24-1.74%), and JKM death benefit (0.3%).
THR (Tunjangan Hari Raya)
THR is a mandatory religious holiday bonus. After 12 months, employees receive 1 full month's salary. Pro-rated for 1-12 months of service. Must be paid at least 7 days before the employee's religious holiday. Late payment triggers 5% fines.
Termination and severance
Employer-initiated termination requires valid reason and often mediation. Severance ranges from 1-9 months' salary based on tenure, plus long service pay (2-10 months for 3+ years), plus compensation rights. Total can reach 19+ months' salary.
Foreign worker requirements
Hiring foreign workers requires RPTKA approval, a work permit, and KITAS. Employer pays DKP-TKA of USD 1,200/year per foreign worker. Each must have an Indonesian counterpart for knowledge transfer. Process takes 4-10 weeks.
What It Costs to Employ Someone in Indonesia
Total employer cost in Indonesia is typically 127-133% of gross salary, making it one of the more affordable markets in the region.
| Component | Monthly (IDR) | Rate |
|---|---|---|
| Gross salary | 15,000,000 | — |
| BPJS Kesehatan (health) | 480,000 | 4% (capped) |
| JHT (old-age savings) | 555,000 | 3.7% |
| JP (pension) | ~211,000 | 2% (capped) |
| JKK (work accident) | ~36,000 | 0.24% |
| JKM (death benefit) | 45,000 | 0.3% |
| THR provision | ~1,250,000 | 8.33% (1 month/year) |
| Total employer cost | ~17,577,000 | ~127% of gross |
Minimum wage varies by province. Jakarta 2025: IDR 5,396,000/month. EOR/payroll service fee not included.
Common Questions
What companies ask most about hiring in Indonesia.
Yes, through an Employer of Record (EOR). The EOR is a locally registered entity that legally employs workers on your behalf. You manage the day-to-day work. The EOR handles contracts, BPJS registration, payroll, tax withholding, and all compliance. This lets you hire in 3-5 days without investing IDR 2.5 billion in PT PMA capital.
All employees must be enrolled in BPJS Kesehatan (health, 4% employer + 1% employee) and BPJS Ketenagakerjaan covering JHT (3.7% + 2%), JP pension (2% + 1%, capped), JKK work accident (0.24-1.74%), and JKM death benefit (0.3%). Total employer social security is approximately 10-12% of salary.
THR (Tunjangan Hari Raya) is a mandatory religious holiday bonus. After 12 months, employees receive 1 full month's salary. Pro-rated for 1-12 months of service. Must be paid at least 7 days before the employee's religious holiday. Late payment triggers a 5% fine.
You need RPTKA approval, a work permit, and a KITAS. The employer pays USD 1,200/year per foreign worker. Each must have an Indonesian counterpart for knowledge transfer. The process takes 4-10 weeks. Certain positions are restricted to Indonesian nationals.
Employer-initiated termination requires a valid reason and often mediation. Severance ranges from 1-9 months' salary based on tenure, plus long service pay (2-10 months for 3+ years), plus compensation rights. The total package can exceed 19 months' salary. Through EOR, RecruitGo manages the negotiation and settlement.
PKWT is a fixed-term contract for specific projects or seasonal work, max 5 years. PKWTT is indefinite-term with up to 3 months probation. No probation for PKWT. All contracts must be in Bahasa Indonesia; bilingual is standard but the Indonesian version controls.
