HR Software for Indonesia
Leave Policy
Maternity Leave
Pregnant employees are entitled to 3 months of paid leave. 1.5 months must be taken before the birth of the child. The remaining 1.5 months must be taken after the birth of the child. The employee receives 100% of her salary during this period and the employer is responsible for payment.
The employee cannot extend the vacation.
You can use the leave module in IceHrm to manage maternity leave in Indonesia
Paternity Leave
Employees are entitled to 2 days of paid paternity leave. The employee receives 100% of his average salary during this period and the employer is responsible for this compensation.
The employee cannot extend the vacation.
Parental Leave
Parental leave is not regulated by law in Indonesia. However, employees may be entitled to maternity and paternity leave.
Sick Leave
There is no maximum number of days an employee can take sick leave. This vacation is paid by the employer at different rates depending on the duration:
| Period | Pay (% of base salary) |
|---|---|
| First 4 months | 100% |
| 4-8 months | 75% |
| 8-12 months | 50% |
| 12-13 months | 25% before the employer terminates the employment contract |
Pay & Tax
Minimum Wage Requirements
Jakarta – 5,067,381 IDR per month
Other minimum wages vary by province.
Individual Income Tax
Individual income tax ranges from 5% to 35%. Income tax is calculated at progressive rates.
| Gross Annual Income (IDR) | Tax Rate (%) |
|---|---|
| Up to IDR 50 million | 5% |
| From IDR 60 million to IDR 250 million | 15% |
| From IDR 250 million to IDR 500 million | 25% |
| From IDR 500 million to IDR 5 billion | 30% |
| Above IDR 5 billion | 35% |
Payroll Cost
The cost to the employer is generally estimated at 10.24% of the employee’s salary.
- Support fund – 3.70%
- Funeral insurance – 0.30%
- Benefit in case of industrial accidents – 0.24%
- Healthcare and social security – 2*
- Pension fund – 4**
*Capped at IDR 200,846 per month
**Cap of IDR 480,000 per month
Overtime Pay & Maximum Hours
The standard working hours are 8 hours per day on 5 working days and 7 hours per day on 6 working days, for a total of 40 hours per week. The normal working week lasts from Monday to Friday.
The overtime regulations in Indonesia are complicated. Pay for overtime is not mandatory. Hours outside of standard working hours are considered overtime. Employees can work a maximum of 4 hours of overtime per day and 18 hours of overtime per week. Overtime is paid between 150% and 400% of the hourly wage, depending on whether it is a regular working day or a weekend and how much overtime was worked.
- 150% of the hourly rate for the first 1 hour.
- 200% of the hourly rate for the following hours.
For employees who work on weekends or public holidays, overtime is calculated as follows:
- 200% of the hourly rate for the first 8 hours.
- 300% of the hourly rate for the following 1 hour.
- 400% of the hourly rate for the following 2 hours.
Termination
Termination Requirements
Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.
Terminations in Indonesia can be complex. In Indonesia, employers cannot terminate at their own discretion outside of the probationary period, and the termination must be for just cause.
Compliant terminations include:
- Voluntary by the employee
- By mutual agreement
- Death of the employee
- Termination of the operation
- By expiry of the contract
- Unilaterally by the employer due to:
1. Probation period
2. Objective reasons
3. Dismissal for disciplinary reasons
4. Performance due to unsuitability for the position
5. Merger or acquisition of the company
6. Bankruptcy
7. Inability to work for health reasons
Notice Period
In Indonesia there is no statutory minimum notice period. In general, termination by the employer takes:
- Notice period during the probationary period – 7 days
- Minimum notice period – 30 days
Termination by the employee:
- Minimum notice period – 30 days
Severance for Employees
In Indonesia, all workers who are laid off are entitled to severance pay. The amount of the severance payment depends on the length of employment and the basic salary.
| Length of employment | Severance pay |
|---|---|
| Less than 1 year | 1 month wage |
| Between 1 to 2 years | 2 months wage |
| Between 2 to 3 years | 3 months wage |
| Between 3 to 4 years | 4 months wage |
| Between 4 to 5 years | 5 months wage |
| Between 5 to 6 years | 6 months wage |
| Between 6 to 7 years | 7 months wage |
| Between 7 to 8 years | 8 months wages |
| Above 8 years | 9 months wage |
To protect you from unforeseen financial risks arising from the termination of an employment relationship, IceHrm applies a severance pay provision to all employment contracts in this country. IceHrm has extensive expertise in managing litigation around the world and our settlement reserve calculation is based on prevailing common law or statutory claims and best local practices. If your employee resigns or is not entitled to severance pay, you will receive a refund of any unused amounts.
Statutory Time Off
Paid Time Off
Full-time employees are entitled to 12 days of paid time off (PTO) per year. 1 day of PTO will be credited per month. Employees are entitled to annual leave if they have been employed for 1 year.
Part-time employees are not eligible for PTO.
Public Holidays
Indonesia celebrates 15 national holidays. National holidays are:
- New Year’s Day
- Lunar New Year
- Ascension of the Prophet Muhammed
- Silence Day
- Good Friday
- Eid al Fitr
- Labor Day
- Ascension of Jesus Christ
- Pancasila Day
- Vesak Day
- Eid al Adha
- Islamic New Year
- Indonesia Independence Day
- Prophet Muhammad’s Birthday
- Christmas Day
Onboarding
Onboarding
Onboarding takes 3 working days.
Additional Info
Employment Contract Details
The contracts must be written in the Indonesian language and Latin alphabet and can be bilingual. They must be in writing and signed by both parties.
A contract must contain the following:
- Name, address of the company and type of business
- Job
- Place of work
- Salary and method of payment
- Working conditions that regulate the rights and obligations of the employer and employee
- Date of start and duration of the employment contract
- Place and date of conclusion of the employment contract
Probation Period
Probationary periods are not mandatory. For permanent contracts, the probationary period is 3 months. There is no minimum duration for fixed-term contracts. Fixed-term contracts cannot have a trial period.