How do you hire an Indonesian employee in 2026?
Indonesia splits every hire into two contract types before you draft a single clause. A permanent PKWTT contract can include a probation period of up to 3 months. A fixed-term PKWT cannot include probation at all. Get the contract type wrong and the employee is automatically treated as permanent from day one.
· Indonesia guide
Illustration · Jakarta, Indonesia
Hiring in Indonesia starts with a choice: permanent (PKWTT) or fixed-term (PKWT) contract. The contract type controls whether probation is allowed, when severance accrues, and when protection kicks in.
A PKWTT permanent contract can include probation of up to 3 months. A PKWT fixed-term contract cannot include any probation period.
BPJS social security registration starts from day one. Annual leave is 12 days after the first year. The standard working week is 40 hours. The minimum resignation notice for an employee is 30 days.
What does the end-to-end Indonesia hire process look like?
Five steps take you from accepted offer to first payslip: offer letter, work-authorisation check, written employment contract, BPJS registration, first payday.
The contract type decision comes first. Every other step depends on whether you are hiring on a PKWTT or PKWT basis.
| Step | What happens | Owner | Timing |
|---|---|---|---|
| 1. Offer letter | Written offer confirming role, salary, contract type (PKWTT or PKWT), start date, and key terms | Client / Teamed drafts | Same day after verbal accept |
| 2. Work-authorisation check | Confirm Indonesian citizenship, or verify KITAS/KITAP residence permit and IMTA work permit for foreign nationals | Teamed | Before the employee starts |
| 3. Written employment contract | PKWTT or PKWT contract signed by both parties. PKWTT may include probation of up to 3 months; PKWT may not | Teamed (legal employer) | Before or on day one |
| 4. BPJS registration | Register the employee with BPJS Kesehatan (health) and BPJS Ketenagakerjaan (employment); collect NPWP tax number | Teamed | Days 1 to 7 |
| 5. First payday | First monthly payslip issued; PPh 21 withheld and remitted to DJP by the 15th of the following month | Teamed | End of first calendar month |
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Issue the offer letter
Send a written offer the same day as verbal acceptance. State the contract type (PKWTT or PKWT), salary, start date, and any conditions. For PKWTT, confirm probation of up to 3 months and probation notice of 7 days.
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Complete the work-authorisation check
Confirm the KTP identity document for Indonesian nationals. For foreign nationals, verify the KITAS or KITAP residence permit and the IMTA work permit before the start date.
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Issue the written contract
The PKWTT or PKWT contract must be signed before or on day one. For PKWT contracts, Teamed registers the agreement with the local manpower office within the required window. Clients choose commercial terms; Teamed signs as the legal employer.
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Complete BPJS registration
Register the employee with BPJS Kesehatan and BPJS Ketenagakerjaan, collect the NPWP tax number, and set up IDR payroll transfer details. This runs across days one to seven.
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Issue the first payslip
Run the first monthly payroll, withhold PPh 21 income tax, and remit BPJS contributions. The employee receives their payslip and is on the payroll record.
What must an Indonesian offer letter include?
An offer letter is not the binding contract. It is the document the candidate decides on.
State the contract type clearly. A candidate accepting a PKWTT offer letter expects probation to be possible. A candidate accepting a PKWT offer letter expects a defined end date. Getting this wrong at the offer stage creates disputes before the contract is even signed.
Standard inclusions for an Indonesian offer letter:
- Role title and reporting line
- Contract type: PKWTT (permanent) or PKWT (fixed-term with stated end date or defined task)
- Start date and, for PKWT, the end date or the completion milestone
- Gross monthly salary, stated in Indonesian Rupiah (IDR)
- Working pattern: 40 hours per week, confirming whether the role follows a 5-day or 6-day schedule
- Location of work and any remote-work arrangement
- Probation period (PKWTT only): up to 3 months, with probation notice of 7 days
- Any conditions: reference checks, background screening, or pending work-permit approval
Three traps to avoid in Indonesian offer letters:
- Using a PKWT for an ongoing role. Fixed-term contracts are only valid for project-based, seasonal, or genuinely temporary work. Using PKWT for a continuing role can result in the employee being deemed permanent (PKWTT) by law, with full severance entitlements from day one.
- Adding probation to a PKWT. Any probation clause in a fixed-term contract is invalid. If you include one, the contract still stands but the probation clause is void and has no effect.
- Quoting a regional minimum wage that does not apply. Indonesia has no single national minimum wage. Each province sets its own UMP. Jakarta's UMP for 2026 is IDR 5,729,876/month. Use the UMP for the employee's province of work, not Jakarta's figure unless the role is genuinely Jakarta-based.
Teamed's standard Indonesian offer letter template covers all required ground and flags the PKWTT or PKWT choice before drafting begins. Clients choose commercial elements; Teamed holds the legal-employer position.
Indonesia work-authorisation checks (KITAS, KITAP, and IMTA)
Indonesian nationals can work for any employer without a permit. The work-authorisation check for local hires confirms identity only.
Foreign nationals need two documents before they can start: a valid residence permit (KITAS or KITAP) and a work permit (IMTA). Both must be in place before the first day.
Indonesian nationals
For Indonesian citizens, the employer checks a valid national identity card (KTP) and retains a copy. No government portal or separate authorisation is required. The employer also collects the employee's NPWP (Nomor Pokok Wajib Pajak, the tax registration number) for payroll withholding. Employees who do not yet have an NPWP can register through the Directorate General of Taxes (DJP).
Foreign nationals
Hiring a foreign national in Indonesia requires two government documents. First, a valid limited-stay permit (KITAS) or permanent-stay permit (KITAP) issued by the Directorate General of Immigration. Second, a work permit (IMTA, Izin Mempekerjakan Tenaga Kerja Asing) issued by the Ministry of Manpower. The IMTA authorises the specific role and employer. The employer cannot place a foreign national in work until both documents are in hand.
Common routes include the Skilled Worker IMTA for professionals, the Intra-Company Transfer category for secondees, and the Directors and Commissioners route for senior leaders. Some roles in protected sectors (for example, HR and personnel management) are closed to foreign nationals by ministerial regulation.
Employers must apply for an IMTA (work permit) from the Ministry of Manpower before a foreign national begins work in Indonesia. Employment of a foreign national without a valid IMTA is a criminal offence under the Manpower Law. The KITAS residence permit must also be valid for the duration of employment.
Ongoing checks for foreign nationals
Both the KITAS and the IMTA have expiry dates and must be renewed before they lapse. Teamed tracks each expiry and notifies the employee and client well ahead of the renewal deadline. A permit lapse is a compliance breach for both the employer and the employee.
The Indonesian written contract: what must it contain?
Every employment relationship in Indonesia must be set out in a written contract. The Manpower Law requires it.
The contract must be signed before or on the first day of work. For PKWT fixed-term contracts, a copy must be registered with the local manpower office within 3 working days of signing.
What an Indonesian employment contract must include under the Manpower Law (Law No. 13 of 2003, as amended by Law No. 6 of 2023) and Government Regulation No. 35 of 2021:
- Full names and addresses of employer and employee
- Contract type: PKWTT (permanent, indefinite term) or PKWT (fixed-term, with stated duration, end date, or defined task or project)
- Job title and a description of the duties
- Place of work
- Agreed gross salary, any fixed allowances, and pay interval (monthly)
- Working hours: 40 hours per week, on a 5-day or 6-day schedule
- Annual leave entitlement: 12 days per year after 12 continuous months of service
- Probation period (PKWTT only): up to 3 months, stated expressly in writing
- Notice periods: employer gives at least 2 weeks written notice; employee gives at least 30 days written notice
- Reference to the company regulations (Peraturan Perusahaan) or collective labour agreement (PKB) that governs the employment
- BPJS Kesehatan and BPJS Ketenagakerjaan enrolment terms
A PKWT contract that does not meet the statutory requirements (for example, one that covers a permanent role rather than a fixed-term task) will be treated by law as a PKWTT permanent contract. The employee acquires all permanent-employment rights immediately.
After 6 continuous years of service, a permanent employee becomes entitled to a one-month long-service leave in the 7th year. This entitlement is set by law and cannot be waived by contract.
Teamed's standard Indonesian employment contract satisfies all current requirements under the Omnibus Law and PP 35/2021. Key source: L&E Global: Employment Law Overview Indonesia.
Onboarding admin in the first week
Days 1 to 7: contract signed, BPJS Kesehatan and BPJS Ketenagakerjaan registrations completed, NPWP tax number collected, bank account details collected, and first payroll cycle opened.
Teamed handles the compliance and payroll side. The client handles the cultural and operational side.
| Onboarding task | Who does it | Day |
|---|---|---|
| Employment contract signed (PKWTT or PKWT) | Employee and Teamed | Day 0 or 1 |
| Work-authorisation check completed (KTP or KITAS/IMTA) | Teamed | Day 0 (before start) |
| NPWP tax number collected or confirmed | Employee submits to Teamed | Day 1 |
| BPJS Kesehatan (health insurance) registration | Teamed | Days 1 to 7 |
| BPJS Ketenagakerjaan registration (JHT, JP, JKK, JKM) | Teamed | Days 1 to 7 |
| Indonesian bank account details (for IDR payroll transfer) | Teamed collects | Days 1 to 7 |
| PKWT registration with local manpower office (fixed-term contracts only) | Teamed | Within 3 working days of contract signing |
| Company regulations (Peraturan Perusahaan) acknowledgement signed | Employee and Teamed | Day 1 |
| Equipment and system access | Client | Days 0 to 1 |
| Manager introduction and first-week plan | Client | Days 0 to 7 |
| 30-60-90 day plan documented | Client (manager) | Days 1 to 14 |
How does Teamed handle Indonesian employment for you?
Teamed becomes your legal employer of record in Indonesia for from $599 per employee per month, with zero FX mark-up in any currency.
Payroll, BPJS registration, the PKWTT or PKWT contract, and the full Indonesian employment law stack run on one platform.
Real HR and legal experts handle your Indonesian hires, from the first offer letter through every monthly PPh 21 remittance and BPJS contribution filing. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.
EOR payroll, contractor onboarding, and entity setup all live on one platform. An Indonesian contractor who converts to full PKWTT employment keeps their record. Run the Crossover Calculator to see the month your Indonesian hire is ready to graduate to your own entity. Start from the Indonesia hiring overview. Each guide here covers one layer of Indonesian employment law.
Key sources: L&E Global: Indonesia Employment Law Overview, ICLG: Indonesia Employment 2026, and Acclime Indonesia: Employment Law.
Frequently asked questions
What is the difference between a PKWTT and a PKWT contract in Indonesia?
A PKWTT (Perjanjian Kerja Waktu Tidak Tertentu) is a permanent, indefinite-term employment contract. A PKWT (Perjanjian Kerja Waktu Tertentu) is a fixed-term contract, valid only for project-based, seasonal, or genuinely temporary work. A PKWTT may include a probation period of up to 3 months. A PKWT may not include any probation period. Using PKWT for an ongoing role risks the employee being treated as permanently employed from day one, with full severance rights.
What is the maximum probation period in Indonesia?
For permanent PKWTT contracts, the maximum probation period is 3 months. This must be stated expressly in writing in the contract. During probation, the employer can end the employment with 7 days written notice and no severance. Fixed-term PKWT contracts cannot include any probation period. The minimum wage still applies during probation.
What notice must an employee give when resigning in Indonesia?
An employee who resigns must give at least 30 days written notice before their last working day. Voluntary resignation does not trigger a severance entitlement. After resignation, the employer must settle all outstanding pay, unused annual leave, and any contractual benefits owed.
When does dismissal protection apply in Indonesia?
Dismissal protection applies from the first day of employment. There is no qualifying service period before a permanent employee can challenge a termination. All employer-initiated terminations of permanent employees require a valid legal ground under the Manpower Law and Government Regulation No. 35 of 2021. The employer must also follow a mandatory dispute resolution process: bipartite negotiation first, then tripartite mediation, then the Industrial Relations Court if needed.
What is the statutory annual leave entitlement for an Indonesian employee?
The minimum paid annual leave entitlement is 12 days per year, after the employee has completed 12 continuous months of service. At least 6 consecutive days must be taken within the leave year. Indonesia has 17 mandatory national public holidays in 2026. After 6 continuous years of service, a permanent employee earns one month of additional long-service leave in the 7th and 8th years.
The PKWTT versus PKWT decision is not a formality. It determines the entire employment relationship: whether probation applies, when severance accrues, and how the contract can end. We make that choice explicit in the offer stage, before a single clause is drafted, so there are no surprises on day one.
In Indonesia the contract type is the first decision. Everything else follows from it.
BPJS registration is a day-one obligation. Miss it and contributions fall into arrears from start.
Get the PKWTT versus PKWT call right and the whole hire is clean.
