--- title: "Hiring in Indonesia 2026 | Employer of Record Guide" description: "Hire in Indonesia through Teamed's EOR. 10.24% total employer BPJS, 12 days statutory leave, severance from day one under the Omnibus Law. The Indonesia guides, one per layer." canonical: https://www.teamed.global/country-hiring-guides/indonesia --- Indonesia · Country overview Served by Teamed via an Indonesia-licensed EOR entity # What do you need to know to hire in *Indonesia*? Indonesia has no minimum qualifying period before severance or unfair dismissal protection. BPJS contributions add 10.24% employer cost on top of salary, there are 17 national public holidays, and every employer-initiated termination goes through a mandatory three-tier dispute process. Each guide below takes one layer. Last reviewed 13 June 2026 · Indonesia guide ## How does Teamed handle Indonesian hiring for you? Teamed becomes your legal [employer of record](/lp/employer-of-record) in Indonesia for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency. Payroll, BPJS registration, and the full Indonesian Manpower Law stack run on **one platform**. **Real HR and legal experts** manage every Indonesian hire, from the first offer letter to final severance calculation. **An actual person**, not a chatbot or a pooled queue, handles your Indonesian team alongside EOR, contractor onboarding, and entity payroll on **one platform**. There is **no setup fee** and **no exit fee**. Employer cost **passes through at cost, itemised** on every invoice. An Indonesian contractor who converts to payroll keeps their record, and that same employee can **graduate** from EOR to your own Indonesian PT PMA without re-onboarding. Run the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) to see the month the model flips. EOR is the right model for a first Indonesian hire, **until it isn't**. Three things you won't find on any other Indonesia EOR guide - **Severance applies from the first day of permanent employment.** There is no qualifying period. An employer-initiated termination of a permanent employee (PKWTT) triggers severance pay from the moment the contract starts. [The termination guide](/country-hiring-guides/indonesia/termination-and-severance) explains the full UP, UPMK, and multiplier structure under the Omnibus Law. - **Indonesia has 17 national public holidays in 2026, plus 8 additional recommended collective leave days.** The 8 collective leave days are not legally mandatory for private companies but are widely observed. Most US buyers plan for 17 days and are surprised when employees take 25. - **The minimum wage is set per province, not nationally.** Jakarta's UMP of IDR 5,729,876/month is the highest in Indonesia. The lowest provincial rate is roughly 38 percent of Jakarta's. You must apply the UMP for the province where the employee actually works. Answer.cite this Hiring in Indonesia adds roughly 10.24% in BPJS contributions on top of gross salary. The standard working week is 40 hours and payroll runs monthly, with tax withheld and remitted within 15 days of month end. Statutory annual leave is 12 days after twelve months of service. There are 17 national public holidays in 2026. Teamed runs Indonesian payroll, contracts, and BPJS compliance through an EOR entity holding the required Indonesian registrations. This page is the map. Each guide below is the detail. At a glance · Indonesia IDR · Indonesian · Monthly payroll Currency IDR (Rp) Employer BPJS 10.24% low-risk industry; health, pension, work-accident, death Employee BPJS 4% health, pension contribution Annual leave 12 days after 12 months service; excludes public holidays Public holidays 17 national mandatory; 8 more collective leave days widely observed Jakarta minimum wage IDR 5,729,876/month UMP Jakarta 2026; varies by province Minimum notice 2 weeks 14 working days written notice before effective termination Top income tax 35% PPh 21, on taxable income above IDR 5 billion ![A wide illustration of Jakarta at golden hour: the National Monument (Monas) in the foreground, the city skyline stretching behind it, and a clear amber sky above.](/images/country-guides/indonesia-hiring.webp) Indonesia · per employee · per month · flat $ 599 Zero FX. No setup fees. 48-hour onboarding. The price your finance team can forecast against without an asterisk. Zero FX Fixed No setup fee No exit fee 48-hour onboard ## How much does it cost to hire an employee in Indonesia in 2026? A full BPJS contribution package adds 10.24% on top of gross salary for a low-risk industry employer. The Jakarta minimum wage floor is IDR 5,729,876/month for employees based in Jakarta. Employer BPJS contributions cover health insurance (Kesehatan at 4%), work-injury insurance (JKK at 0.24% for low-risk), pension savings (JHT at 3.7%), pension insurance (JP at 2%), and death insurance (JKM at 0.3%). High-risk industries reach an employer total of up to 11.74%. BPJS Kesehatan has a salary cap of IDR 12,000,000 per month for the contribution base. The minimum wage is set per province. Jakarta's UMP of IDR 5,729,876/month is the highest. You must apply the UMP for the province where your employee works, not Jakarta's rate by default. Teamed's Indonesia fee sits inside the total cost envelope, not outside it. The full breakdown, with worked examples at current provincial rates, is in the cost guide. [Read the full Indonesia cost breakdown](/country-hiring-guides/indonesia/cost-breakdown) ## Do you need an Indonesian entity to hire employees in Indonesia? No. An Employer of Record runs Indonesian payroll and BPJS compliance from day one. Your own PT PMA (foreign-owned company) typically becomes cost-effective somewhere around 10 to 15 employees, depending on your industry licence. Setting up a PT PMA requires meeting minimum investment requirements, obtaining business licences through the OSS (Online Single Submission) system, and completing registration with the Ministry of Manpower. The process takes three to six months and requires ongoing legal and accounting support. An [Employer of Record](/lp/employer-of-record) is faster and cheaper at low headcount. Teamed runs Indonesian payroll, BPJS registration, and Manpower Law compliance from day one. The crossover point depends on industry type, investment minimums, and your accounting costs. For most tech and professional services roles it lands around 10 to 15 employees. The EOR vs entity guide runs those numbers. Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Indonesian entity on **one platform** under Teamed's Graduation Model, with tenure preserved. [Read the full Indonesia EOR vs entity guide](/country-hiring-guides/indonesia/eor-vs-entity) ## What changed in Indonesian employment law in 2024 and 2026? Law No. 4 of 2024 (the Mother and Child Law) extended optional maternity leave to up to six months in specific medical circumstances and formalised the additional three-day paternity entitlement. The 2020 Omnibus Law (Job Creation Law No. 11 of 2020) and its implementing regulation PP 35/2021 remain the governing framework for severance, termination process, and fixed-term contracts. The Omnibus Law restructured severance pay, created the bipartite and tripartite dispute process as the mandatory termination route, and set the fixed-term contract (PKWT) framework. PP 35/2021 is the primary implementing regulation. Under these rules, every employer-initiated termination of a permanent employee requires written notice, a 30 days bipartite negotiation window, and, if unresolved, tripartite mediation before the Industrial Relations Court. Law No. 4 of 2024 added extended maternity protection for medical conditions and encouraged employers to provide up to five days of paternity leave (two days are statutory). The compliance and hiring guides cover each change and the current day-one obligations. [Read the full Indonesia hiring guide](/country-hiring-guides/indonesia/hiring-guide) ## What benefits must you provide Indonesian employees in 2026? The statutory floor is 12 days of paid annual leave after twelve months, full salary sick pay for the first 4 months of illness, and 13 weeks of paid maternity leave. Fathers receive 2 days of statutory paid paternity leave. Statutory annual leave is 12 days after one year of continuous service. At least 6 consecutive days must be taken within the year. There are 17 national public holidays, plus 8 widely observed collective leave days. Indonesia counts annual leave and public holidays separately. Sick pay runs at 100 percent for the first 4 months, then 75 percent for months 5 to 8, 50 percent for months 9 to 12, and 25 percent from month 13 until termination. Maternity leave is 13 weeks at full pay, split equally before and after delivery. Law No. 4 of 2024 adds an optional additional three months under specific medical conditions. Paternity leave is 2 days at full pay as a statutory minimum. The benefits guide covers each entitlement and the employer obligations. Read the full Indonesia benefits guide ## What are payroll taxes in Indonesia in 2026? Employer BPJS contributions total 10.24% for a standard low-risk industry employer, covering health, pension, work-accident, and death insurance. Employees contribute 4% in BPJS deductions (health insurance plus pension savings and insurance). Indonesian payroll tax (PPh 21) is withheld monthly by the employer. The personal non-taxable threshold (PTKP) is IDR 54,000,000/year for a single individual with no dependants. Income tax above that amount is progressive: 5% on the first IDR 60 million of taxable income, rising to 15% on income up to IDR 250 million, and reaching 35% at the top. The withheld PPh 21 must be remitted to the State Treasury within 15 days of each month end. BPJS Kesehatan is capped at an IDR 12,000,000 monthly salary base. The JP (pension insurance) contribution ceiling is IDR 11,086,300 per month (effective March 2026). The tax and payroll guide sets out every bracket, ceiling, and filing deadline. [Read the full Indonesia tax and payroll guide](/country-hiring-guides/indonesia/tax-and-payroll) ## How do you terminate an employee in Indonesia? Every employer-initiated termination of a permanent employee requires 2 weeks of written notice and a mandatory bipartite negotiation period before the termination takes effect. Severance pay applies from the first day of permanent employment. The basic severance formula (UP) caps at 9 months of salary at 8 or more years of service. Under PP 35/2021, a dismissal of a permanent employee (PKWTT) must follow a mandatory three-tier process: bipartite negotiation between employer and employee for up to 30 days, then tripartite mediation at the local manpower office, then the Industrial Relations Court if unresolved. This process cannot be bypassed. Termination during the 3 months probation period requires only 7 days notice and no severance. Severance pay (UP) applies from day one of permanent employment with no qualifying period. The UP formula is banded: one month for under one year of service, scaling up to 9 months of salary for eight or more years. Termination reason affects the multiplier: 1.0x for efficiency-driven layoffs, 0.5x where the company is making verified losses, and 1.75x for retirement. A long service award (UPMK) and compensation of rights (UPH) may apply on top. The termination guide covers every route and multiplier. [Read the full Indonesia termination and severance guide](/country-hiring-guides/indonesia/termination-and-severance) ## What should you know before hiring in Indonesia? Two things catch US buyers out. The first is that severance applies from day one with no qualifying period. The second is that the minimum wage differs by province. You cannot use Jakarta's rate for employees based elsewhere. **Severance with no qualifying period.** Unlike the UK or the US, Indonesian law grants severance entitlement to permanent employees from the moment employment starts. The three-tier termination process also means a dismissal timeline is measured in weeks to months, not days. Most US buyers underestimate the time and cost of ending a permanent employment relationship in Indonesia. **The provincial minimum wage map.** Indonesia has no single national minimum hourly wage. Each province sets its own UMP annually. Jakarta's rate of IDR 5,729,876/month is the highest. Employers must apply the UMP for the province where the employee performs work. Misapplying Jakarta's rate to an employee in, say, West Java would mean overpaying the statutory floor but could also create a compliance reference point. The hiring guide and the cost breakdown both cover how to read the provincial wage map. [Read the full Indonesia hiring guide](/country-hiring-guides/indonesia/hiring-guide) ## Frequently asked questions How much does it cost to hire an employee in Indonesia? Employer BPJS contributions add 10.24% on top of gross salary for a standard low-risk industry. The Jakarta minimum wage floor for 2026 is IDR 5,729,876/month, but the applicable rate depends on the province where your employee works. Teamed's Indonesia fee is one flat number per employee per month, with zero FX mark-up. The cost breakdown guide has worked examples. Can a US company hire in Indonesia without an entity? Yes. An Employer of Record like Teamed runs Indonesian payroll, BPJS registration, and Manpower Law compliance through its own registered entity. You direct the work. Teamed becomes the legal employer of record. Setup takes 48 hours once terms are confirmed. Setting up your own PT PMA takes three to six months and requires meeting Indonesian investment minimums. What is the minimum annual leave for an Indonesian employee? Statutory minimum paid annual leave is 12 days after twelve months of continuous service. At least 6 consecutive days must be taken within the year. Unused leave expires six months after the accrual period. Indonesia counts annual leave and public holidays separately. There are 17 national public holidays in 2026, plus 8 widely observed collective leave days. What are Indonesian statutory notice periods? The minimum employer notice period for permanent employee termination is 2 weeks of written notice. During probation (maximum 3 months), only 7 days notice is required and no severance is owed. For a voluntary resignation, employees must give 30 days written notice. Is severance mandatory in Indonesia? Yes. Severance pay (UP) applies to every employer-initiated termination of a permanent employee (PKWTT) with no minimum qualifying period. The UP formula starts at one month of salary for under one year of service and scales to a cap of 9 months of salary for eight or more years. The multiplier varies by reason for termination. A long service award (UPMK) may apply separately. What are the BPJS contribution rates for employers in Indonesia in 2026? Total employer BPJS contributions are 10.24% for a standard low-risk industry (BPJS Kesehatan 4%, JHT pension savings 3.7%, JP pension insurance 2%, JKM death insurance 0.3%, JKK work-accident 0.24%). High-risk industries pay more. Employees contribute 4% (health 1%, JHT 2%, JP 1%). The tax and payroll guide sets out every contribution ceiling and filing deadline. Teamed Legal Operations Indonesia reads as a high-protection market and the termination process is. But the BPJS framework and the Omnibus Law severance rules are codified and predictable once you learn them. The mistake most US buyers make is assuming Indonesia works like an at-will jurisdiction. It does not. Every permanent hire comes with day-one severance exposure and a mandatory dispute process. These guides exist so that exposure is budgeted before the first hire, not discovered at the first dismissal. A note from Tom Price-Daniel Indonesia has 17 national public holidays, day-one severance from the first permanent hire, and a minimum wage that varies by province. Most of the cost surprises in Indonesia come from not reading the Omnibus Law rules before the contract is signed. Read the right Indonesia guide before that hire, not after the first bipartite negotiation. Tom Price-Daniel · Co-founder, Teamed ## Keep reading - [Indonesia hiring guide, offer to payslip](/country-hiring-guides/indonesia/hiring-guide)guide - [Indonesia employer cost breakdown 2026](/country-hiring-guides/indonesia/cost-breakdown)guide - [EOR vs entity in Indonesia](/country-hiring-guides/indonesia/eor-vs-entity)guide - [Indonesia termination and severance](/country-hiring-guides/indonesia/termination-and-severance)guide - [Indonesia tax and payroll](/country-hiring-guides/indonesia/tax-and-payroll)guide - [Employer of Record overview](/lp/employer-of-record)core - The Graduation Modelcore - [Teamed pricing, Zero FX Fixed](/pricing)core - [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator/indonesia)tool - [Talk to an expert](https://www.teamed.global/contact)CTA A note on this page. This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction. Verify current requirements with the Ministry of Manpower (Kementerian Ketenagakerjaan) and the Directorate General of Taxes (Direktorat Jenderal Pajak) for Indonesia, or speak to a qualified professional, before relying on any specific framework.