Payroll Guide Indonesia

OS HRS takes care of your multi-country payroll with local regulatory expertise. From Indonesia, across Asia Pacific and beyond, we are the payroll partner of global leaders. Not sure where to start when it comes to multi-country payroll? Here’s our quick payroll guide for your business operations.

Overview of payroll in Indonesia

Payroll cycle	Monthly, 13th salary paid on Tunjangan Hari Raya which is prorated for employees who have not completed a year of service.
Employer taxes	10.24% - 11.74%
Minimum wage	IDR 1,958,169 to IDR 5,067,381 per month based on the local government regulations.
Working hours	8 hours a day, 5 days a week or 7 hours a day, 6 days a week

What are the steps to set up payroll in Indonesia?

Payroll in Indonesia involves a number of compliance requirements, including the calculation and withholding of taxes, social security contributions, and other deductions. Here are the steps to set up payroll in Indonesia:

Step 1: Register with the government

To operate payroll in Indonesia, you need to register with the Ministry of Manpower (MOM) and the Social Security Administration (BPJS). These registrations are mandatory and must be completed before you can start processing payroll.

Step 2: Obtain tax identification numbers

Next, you'll need to obtain tax identification numbers for your employees and your company. You can obtain these numbers by registering with the tax office, which will require you to provide your company's legal documents and a list of employees.

Step 3: Determine employee salaries and benefits

Indonesia has a minimum wage requirement that varies by region, and you'll need to ensure that you're meeting these requirements. Additionally, you'll need to determine benefits such as health insurance, pension contributions, and other statutory benefits that are required by law.

Step 4: Choose a payroll provider

Outsourcing your payroll to a reliable provider can save you time and money while ensuring that you're compliant with Indonesian payroll regulations. Choose a provider that has experience in handling payroll in Indonesia and has a good track record of compliance.

Step 5: Process payroll

Once you've registered with the government, obtained tax identification numbers, determined employee salaries and benefits, and chosen a payroll provider, you can start processing payroll. Your provider will calculate taxes and deductions, issue payslips, and ensure that you're compliant with Indonesian payroll regulations.

Step 6: Submit payroll reports

In Indonesia, you're required to submit payroll reports to the government on a monthly and annual basis. Your payroll provider will handle this process for you, ensuring that your reports are accurate and submitted on time.

By following these steps, you'll be able to set up payroll in Indonesia efficiently and compliantly. Remember to stay up to date with Indonesian payroll regulations to avoid any penalties or fines. For more information on payroll outsourcing and compliance, please refer to our payroll outsourcing guides.

It is important to note that setting up payroll in Indonesia can be complex, and it is recommended to seek professional advice or engage a payroll outsourcing company like OS HRS to ensure compliance with local regulations.

What do you need to know about Indonesia Payroll?

Employer Contributions Indonesia

What do you as an employer need to make in employer contributions?

0.24% – 1.74%	Work Accident
3.70%	Old Age
0.30%	Death
2.00%	Pension
4.00%	Health Insurance Note: maximum of 480,000 IDR
10.24% – 11.74%	Total Employer Contributions