Why Hire in Indonesia?

Looking to hire remote workers for your team? With Interloop, you can easily hire, pay, and support employees from anywhere in the world, making the entire process smooth and worry-free.

Capital City

Jakarta

Currencies

Indonesian Rupiah (IDR)

Population size

284,093,922

(est. 2024)

Languages spoken

Indonesian

Why hire staff in Indonesia?

Our Services

Recruit Talent

Our recruitment service manages the entire process: planning, searching, screening, and evaluation, ensuring a seamless hiring experience.

Onboard Contractors

We handle hiring, onboarding, compliance, and payroll for contractors, letting your business tap into global talent for growth.

Run Global Payroll

Managing payroll across jurisdictions is complex and costly. We ensure timely, reliable payments for your employees and contractors worldwide.

Labor laws in Indonesia

Working Hours

Rest Breaks

Overtime Pay

Overtime pay calculation during a normal working week:

  • First, calculate the hourly rate = 1/173 x 1 monthly salary
  • The first hour of overtime = 1.5 x (hourly rate)
  • The second hour of overtime = 2 x (hourly rate)

Overtime fee calculation during the holidays:
Employees with 5 working days in a week working on a public holiday

  • The first 8 hours of overtime = 2 x the hourly wage
  • The 9th hour = 3x the hourly wage
  • The 10th and 11th hour = 4 x the hourly wage

Employees with 6 working days in a week working on a public holiday

  • The first 7 hours = 2 x hourly wage
  • The 8th hour = 3 x hourly wage
  • The 9th hour = 4 x hourly wage

Employees with 6 working days working on a public holiday which falls on the shortest working day

  • First, the same calculation for hourly rate: 1/173 × 1 monthly salary
  • The first 5 hours of overtime = 2 x hourly wage
  • The 6th hour = 3 x hourly wage
  • The 7th- 8th hour = 4 x hourly wage

Note: Employees which are not Entitled to Overtime Compensation. Employees that hold a certain higher-level position, who can be considered as thinkers, planners, implementers and are able to control the course of the company and whose time cannot be restricted by working hours as set by the company are not entitle to overtime payment.

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Benefits and Leave in Indonesia

Annual Leave

Long-term rest at least 2 (two) months and it is executed in the seventh and the eighth years respectively one month for workers/labor already working for 6 (six years continuously with the same company with the provision that the workers/labor no longer entitle to their annual rest in the 2 (two) current years and it subsequently applies to every multiple of 6 (six years working period.

Sick Leave

Payment to employees on prolonged sick leave is as follows:

  • 100% in the first four months
  • 75% in the second four months
  • 50% the third four months
  • 25% of wages until termination

Further, Female workers are entitled to paid leave on the 1st and 2nd days of menstruation if they are ill and they cannot perform their work.

Maternity Leave and Breastfeeding Time

In the event of a miscarriage, the worker is entitled to 1.5 months of paid leave or as certified in writing by an obstetrician or midwife.

The duration of leave for giving birth (before and after) and miscarriage can be extended subject to recommendation by a doctor.

Employers must provide opportunities and special facilities for mothers to breastfeed their infant during working hours.

Paternity leave

Parental Leave

  • 2 days paid leave for the circumcision of the employee’s child
  • 2 days paid leave for the Baptism of the employee’s child.
  • 2 days paid leave for the marriage of the employee’s child.
  • 2 days paid leave for the death of the employee’s child

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Termination in Indonesia

If termination cannot be avoided, the employer must explain the reasons for termination clearly in writing to the employee and/or the employee’s labor union.

If the employee believes the termination is unjust, the decision can be challenged in the Labor Court, which will give the final ruling.

The reasons for which employees can be discharged from work are as follows:

  • The employee violates the employment agreement
  • The employee is imprisoned
  • The employee is ill for more than 12 months
  • The employee is absent from work for more than 5 days without a valid reason, provided he or she has been notified twice
  • The employee has reached retirement age.

Not all reasons for employees’ dismissal should be related to their misbehavior. The employer can discharge employees for several business-related reasons:

  • There can be a change of the company’s status, its merger with another business, or acquisition of its ownership
  • The employer becomes insolvent
  • The employer has suffered continuous losses for two years consecutively as proven by financial reports
  • The employer is closing the business permanently.

Notice Period

Probation Period

Working agreements for unspecified period can require a probation period for 3 (three) months at the maximum. In the probation period, entrepreneurs shall be prohibited from paying wage below the minimum wage in force.

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Severance Pay and Social Security

Severance Pay

  • Less than 1 year of employment – 1-month wage
  • 1 year or more, but less than two years – 2 months wage
  • 2 Years or more but less than 3 years – 3 months wage
  • 3 years of more, but less than four years – 4 months wage
  • 4 years or more, but less than 5 – 5 months wage
  • 5 years or more, but less than 6 – 6 months wage
  • 6 years or more, but less than 7 – 7 months wage
  • 7 years or more, but less than 8 – 8 months wage
  • 8 years or more – 9 months wage

Social Security

The following contributions must be made by both the employer and employee for the national social security programmed (BPJS):

Areas coveredEmployer contributionEmployee contribution
Accident insurance0.24 - 1.74%
Life insurance0.3%
Old age benefits3.7%2%
Healthcare4%1%
Pension plan2%1%

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Brand Experience​​

NO JOB IS TOO SMALL OR TOO BIG FOR US​​
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Thailand Office
Singapore Office

Get in touch

ThailanD

Level 3, Prasert Sutt Building 360 Sanambinnam Nonthaburi Road,
Bang Krasor, Mueang Nonthaburi,
Nonthaburi 11000 Thailand

Singapore

#23-05. International Plaza, 10 Anson Rd, Singapore 079903

Contact Us

TH Phone : +66 (0) 97 106 9113
SG Phone : +65 9102 0303
Office Phone : +66 (0) 2 007 0971
Email : enquiry@inlps.com
Line@ ID : @inlps

Our Hours

MON-FRI : 09:00 – 18:00

Our Affiliations

We look forward to growing with you
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