Published on 14 Apr 2023
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 China business operations.
Monthly, 13th salary paid on Tunjangan Hari Raya which is prorated for employees who have not completed a year of service
10.24% - 11.74%
IDR 1,813,011 to IDR 4,452,724 per month
8 hours a day, 5 days a week or 7 hours a day, 6 days a week
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 as an employer need to make in employer contributions?
0.24% – 1.74%
Note: maximum of 480,000 IDR
10.24% – 11.74%
Total Employer Contributions
What do you as an employee need to make in employee contributions?
Note: maximum of 120,000 IDR
Total Employee Contributions
What are the income tax rates in Indonesia?
< 60 M IDR
60M IDR – 250M IDR
500M – 5 billion IDR
Integrate your multi-country payroll processes
Automate your multi-country payroll across Asia Pacific, and beyond
Dedicated multi-country payroll compliance
Reach out to OS HRS for a discovery call today!
Last updated April 2023