GLOBAL EMPLOYER OF RECORD IN INDONESIA
Employer of Record in Indonesia
Put the people you need in Indonesia in place without turning every hiring decision into a corporate set-up project. Acumen acts as your Employer of Record, so you can test the market, build the team and keep future incorporation as a separate business decision.
GLOBAL EMPLOYER OF RECORD
Global coverage
Acumen International delivers global employment solutions across 190+ countries.
Strategic markets
Hiring and compliance support across North America, Europe, and Asia-Pacific.
Established jurisdictions
Lawful employment and payroll in regulated, compliance-intensive countries.
Growth economies
Expanding into new regions? Hiring support across fast-moving economies.
Risky and remote locations
Compliant employment solutions in jurisdictions with limited infrastructure.
Employing in Indonesia through an Employer of Record
An Employer of Record arrangement involves three parties and divides the role of employer between two of them. Acumen International signs the employment agreement with each person and becomes their legal employer in Indonesia, accountable to the employee, the Ministry of Manpower, the BPJS agencies and the tax office for the obligations Indonesian law attaches to employment. Your business enters a service agreement with Acumen International, under which it chooses the people, directs their work, keeps the results of that work and covers the employment cost and Acumen International’s fee.
The employees hold Indonesian employment with its full statutory protection, and your business has a working team in Indonesia without establishing a foreign-owned company of its own. Because Acumen International employs in 190+ countries, that team can be built alongside hires in Singapore, Malaysia, Vietnam or Australia, each under local law and all through the same provider. Where the right person has not yet been found, Acumen International can also run the search, from specialist recruitment to executive search, with background and education checks before the offer.
Situations where an Employer of Record serves an Indonesia hire
- Contractor compliance. Freelancers who work exclusively for you in Indonesia move onto employment agreements, with BPJS cover and income tax withheld.
- One accountable provider. Employment agreements, payroll, BPJS registration, tax filings and expatriate permits are handled by a single provider.
- No entity to set up or maintain. You hire in Indonesia without establishing a foreign-owned PT PMA and meeting its capital and licensing requirements.
- Market tests and short-term projects. A first commercial hire or a defined project in Indonesia is staffed, then expanded or concluded on results.
- Bridge to your own entity. Early hires start with Acumen International and move to your PT PMA once it is licensed to employ.
- Fast team launch. Indonesian professionals start on Acumen International’s agreements while permits for expatriate staff are processed.
- Mergers and restructuring. Staff in Indonesia keep continuous employment while ownership or group structure changes.
- NGO staffing. International organisations employ programme and technical staff in Indonesia under Indonesian manpower law.
- Employer liability. Acumen International carries the obligations that manpower inspectors, the BPJS agencies and the tax office enforce against the employer.
- Remote team expansion. People living anywhere in Indonesia join your distributed team on Indonesian terms and social security.
Employing for another business in Indonesia: the legal basis and what is changing
Indonesian employment is governed today by the Manpower Law (Law No. 13 of 2003) as amended by the Job Creation Law (Law No. 6 of 2023), with the detail set out in Government Regulation No. 35 of 2021. Acumen International employs your team under these rules and provides their services to your business under a commercial agreement.
- Third-party employment is regulated. A company that employs people to work for another business must be an Indonesian legal entity holding a central government business licence, and the workers’ protections continue if the provider changes while the work goes on (GR 35/2021, Arts. 19–20).
- Outsourcing is confined to six fields. Minister of Manpower Regulation No. 7 of 2026 limits outsourced work to cleaning, food and beverage provision, security, driver and worker transport, operational support services, and supporting work in mining, oil, gas and electricity. Each arrangement needs a written agreement covering the work, its duration and location, headcount and worker protections.
- A new statute follows. As the Constitutional Court ordered in October 2024, the House of Representatives passed the Manpower Protection Law on 6 October 2026 to replace the employment chapters of the Job Creation Law. It applies after a one-year transition from promulgation, which the Ministry of Manpower expects from 2027, and cuts the maximum fixed-term contract from five years to four.
Acumen International reviews every engagement against these rules before it begins.
What Acumen International handles in Indonesia, from recruitment to exit
| Stage | What it involves in Indonesia |
|---|---|
| Recruitment and checks | Finding the candidate where needed, with background and education checks before the offer |
| Expatriate permits | The foreign worker utilisation plan (RPTKA), the compensation fund payment and the KITAS stay permit |
| Employment agreement | A written fixed-term (PKWT) or permanent (PKWTT) agreement matched to the nature of the role |
| Social security | Registration with BPJS Ketenagakerjaan and BPJS Kesehatan |
| Payroll | Monthly salary in rupiah, PPh 21 withholding and the annual religious holiday allowance |
| Year-end | The December tax recalculation and annual withholding slips for employees |
| Exit | Termination procedure, severance and long-service pay, and closure of permits and BPJS records |
Minimum wages and the religious holiday allowance in Indonesia
Each province sets a minimum wage every year under the formula in Government Regulation No. 49 of 2025, which combines inflation and economic growth, and regencies and cities may set higher local rates. Jakarta’s provincial minimum for 2026 is Rp 5,729,876 a month, 6.17% above 2025. Pay for professional roles is negotiated well above these floors, and employers must keep a wage structure and scale that shows how pay relates to grade.
- Religious holiday allowance (THR): every employee receives one month’s wages after 12 months’ service, and a pro rata amount after one month, paid at least seven days before their religious holiday.
- Currency: wages for work in Indonesia are paid in rupiah.
- Cost planning: the Global Payroll Calculator shows the employer cost of an Indonesian salary, including BPJS and the THR, before the offer is made.
Indonesian employment agreements and working hours
| Topic | Current rule |
|---|---|
| Fixed-term agreement (PKWT) | For work of a temporary nature, up to five years in total including extensions (GR 35/2021, Art. 8), falling to four once the new law applies |
| End-of-term compensation | One month’s wages for every 12 months of a PKWT, pro rata, paid when the term ends (Arts. 15–16) |
| Probation | Only in a permanent agreement (PKWTT), for up to three months; a probation clause in a PKWT is void (Art. 12) |
| Working hours | 40 hours a week, as 7 hours over six days or 8 hours over five days (Art. 21) |
| Overtime | With the employee’s written or digital consent, capped at 4 hours a day and 18 a week (Arts. 26 and 28); paid at 1.5 times the hourly wage for the first hour and twice for later hours on a working day |
| Language | Agreements with Indonesian employees are written in Bahasa Indonesia, with a bilingual version where the parties need one |
Termination and severance in Indonesia
An Indonesian employer cannot simply give notice and part ways. The employee is notified of the intended termination and its reason, at least 14 working days in advance or 7 during probation, and may object within 7 working days. An objection goes to bipartite negotiation and, if that fails, through the industrial relations dispute process (GR 35/2021, Arts. 37–39). Most exits are therefore concluded by written mutual agreement.
The payment due depends on length of service and on the ground for termination (Art. 40):
| Service | Severance (pesangon) | Long-service pay |
|---|---|---|
| Under 1 year | 1 month’s wages | — |
| Each further year | One more month, up to 8 months at 7 to 8 years | — |
| 3 to 6 years | — | 2 months, rising every three years |
| 8 years or more | 9 months (the maximum) | — |
| 24 years or more | — | 10 months (the maximum) |
The ground sets a multiplier: half the severance for efficiency measures because of losses, the full amount for efficiency to prevent losses, 1.75 times on retirement, and none on voluntary resignation, where only accrued rights and any agreed separation pay are due. Compensation for unused leave, and return travel where the employee was recruited from elsewhere, is added in every case.
Employment risks in Indonesia and how Acumen International mitigates them
| Risk | Where it arises in Indonesia | How Acumen International mitigates it |
|---|---|---|
| Worker misclassification | A freelancer working only for you under your direction can be treated as an employee, with BPJS, THR and severance claims | Each person is engaged on a written PKWT or PKWTT with BPJS from the start |
| IP ownership | Rights in work created by an employee pass to the employer only as far as the law and the agreement provide | Agreements assign IP to Acumen International, which transfers it to your business |
| Client liability for pay and contributions | Outsourcing outside the six permitted fields exposes both the provider and the business using the staff to sanctions | Acumen International checks each engagement against Regulation No. 7 of 2026 before it starts and pays wages and BPJS on the statutory dates |
| Equal pay for assigned staff | Workers supplied by a third party keep their protections when the provider changes, and the wage structure must be applied consistently | Pay is set within a documented wage structure and scale |
| Permanent establishment | Staff who conclude contracts or provide services in Indonesia for a foreign company can create a taxable presence | Roles and signing authority are defined so that contracting stays with your company |
| Exit cost | Severance, long-service pay and the dispute process make unplanned exits slow and expensive | Acumen International prepares the ground, calculates entitlements and seeks a mutual agreement before any notice |
| Sponsor obligations | Expatriates may work only in the position and for the period the RPTKA approves | Acumen International keeps each approval matched to the real role and timeline |
Hiring expatriates in Indonesia: RPTKA and KITAS
Indonesia admits foreign professionals to positions that need expertise not yet available locally, and expects that expertise to be passed on. The rules come from Government Regulation No. 34 of 2021 and Minister of Manpower Regulation No. 8 of 2021.
- Foreign worker utilisation plan (RPTKA). The employer applies through the Ministry of Manpower’s TKA Online system, sets out the position and its duration, and takes part in an online assessment.
- Compensation fund. The employer pays US$100 per position for each month of employment before approval is issued.
- Visa and stay permit. The approved RPTKA is passed to immigration, which issues the work visa and then the KITAS limited stay permit.
- Conditions of employment. The expatriate needs qualifications matching the role and at least five years’ relevant experience, is employed on a fixed-term agreement, works alongside an Indonesian companion who is trained to take on the expertise, and receives Indonesian-language training. Personnel and HR positions are closed to foreign nationals.
- Validity. An RPTKA for more than six months runs for up to two years and can be extended, with the extension filed at least 30 days before expiry.
What Acumen International contributes
- An eligible Indonesian employer behind the RPTKA. The plan is approved for a specific employer and position, and Acumen International holds that role, so your expatriate can work in Indonesia without your business establishing a PT PMA.
- A position description that passes assessment. The role is defined around genuine expertise, kept clear of closed positions and supported by the qualifications and experience the Ministry checks.
- Knowledge transfer arranged and documented. The Indonesian companion, the training plan and the language training are in place from the start, so the conditions of the RPTKA are met throughout.
- Permits kept current. RPTKA extensions, compensation fund payments and KITAS renewals are filed on schedule, and any change of role is approved before it applies.
Family members
A spouse and children can join on dependant KITAS permits sponsored through the expatriate’s stay permit. A family member who intends to work needs a work permit of their own.
BPJS contributions and PPh 21 in Indonesia
Social security
Employees, including foreign nationals working in Indonesia for more than six months, are enrolled in both BPJS agencies:
| Programme | Employer | Employee |
|---|---|---|
| Old-age savings (JHT) | 3.7% | 2% |
| Pension (JP), on wages up to an annually adjusted cap | 2% | 1% |
| Work accident (JKK) | 0.24% to 1.74%, by risk level | — |
| Death benefit (JKM) | 0.3% | — |
| Health (BPJS Kesehatan), on wages up to Rp 12 million | 4% | 1% |
Income tax
The employer withholds PPh 21 each month using the effective average rates introduced in 2024, then recalculates the full year in December at the progressive rates of the Income Tax Law:
| Annual taxable income | Rate |
|---|---|
| Up to Rp 60 million | 5% |
| Rp 60–250 million | 15% |
| Rp 250–500 million | 25% |
| Rp 500 million–5 billion | 30% |
| Above Rp 5 billion | 35% |
Tax withheld is paid by the 15th of the following month and reported by the 20th. Expatriates become tax residents after 183 days in Indonesia within 12 months; until then their salary is taxed at a flat 20%.
Industries hiring through an Employer of Record in Indonesia
- Mining, nickel and battery supply chains: engineers, metallurgists and project managers for processing and downstream industries.
- Energy and infrastructure: specialists for power, renewables, transport and the new capital city development.
- Digital economy and fintech: engineers, product managers and compliance staff for one of Asia’s largest internet markets.
- Manufacturing and consumer goods: plant, quality, supply chain and brand leaders serving a market of more than 280 million people.
- Financial services: risk, compliance and relationship managers for banks, insurers and asset managers.
- Hospitality and tourism: general managers and senior staff in Bali and other destinations.
Hiring cases in Indonesia
| Case | What Indonesian rules add | How Acumen International handles it |
|---|---|---|
| A Singapore fintech with no Indonesian company hires a product lead in Jakarta | A written agreement in Bahasa Indonesia, BPJS enrolment, PPh 21 withholding and the THR | Acumen International employs her on a permanent agreement with a three-month probation, runs payroll, BPJS and tax, and assigns her work to the fintech, which grows in Indonesia without a PT PMA |
| An Australian mining services firm brings a metallurgist to Sulawesi for two years | An RPTKA, the US$100 monthly compensation fund, a fixed-term agreement, an Indonesian companion and a KITAS | Acumen International obtains the RPTKA and KITAS, pays the fund, appoints and trains the companion and renews the permits, so he works lawfully for the whole project |
| A software company’s contractor in Bali has invoiced full time for two years | Exclusive, directed work can be reclassified as employment, with BPJS, THR and severance owed | Acumen International moves him onto an employment agreement with social security and tax from the start date, closing the reclassification exposure |
| A regional office in Surabaya closes after three years | Notice, the right to object, and severance and long-service pay multiplied by the ground | Acumen International negotiates a mutual termination agreement, pays the calculated entitlements and closes BPJS records, ending the employment without a dispute |
Employee benefits and leave in Indonesia
BPJS Kesehatan provides basic health cover, so employers competing for skilled staff add private medical insurance, often for the whole family, together with transport and meal allowances and performance bonuses. Expatriate packages commonly include housing, schooling and home leave. Acumen International shapes each package to the role and the city.
| Leave | Entitlement |
|---|---|
| Annual leave | At least 12 working days after 12 months’ continuous service |
| Public holidays | National holidays set each year, plus collective leave days the government designates |
| Sick leave | Paid on a doctor’s certificate: full wages for the first four months, 75% for the next four, 50% for the four after, then 25% until the employment ends |
| Maternity leave | At least three months, extendable by up to three more on medical grounds, at full pay for four months and 75% for the fifth and sixth (Law No. 4 of 2024) |
| Paternity leave | Two days, extendable by up to three more by agreement |
Sources
- Government Regulation No. 35 of 2021
- Law No. 4 of 2024 on Maternal and Child Welfare
- PP 58/2023: effective average rates and simpler PPh 21 calculation
- Deadlines for paying and reporting PPh 21
- Outsourcing not abolished: the six permitted types of work
- Manpower Protection Law passed: when it takes effect
- Can foreign workers be employed through an outsourcing company?
- Employment of foreign workers in Indonesia
- Sick employees remain entitled to wages
- BPJS Ketenagakerjaan contribution rates
- UMP and UMSP Jakarta 2026
FREQUENTLY ASKED QUESTIONS
Got questions?
We’ve got answers
Have questions about hiring globally? You’re not alone. Below you’ll find answers to the most common questions from teams expanding into new markets — from compliance and onboarding timelines to payroll and local benefits.
If you don’t see what you’re looking for, our team of in-country experts is always ready to help you navigate the details.
Is Employer of Record employment in Indonesia limited to office-based roles?
No. White-collar roles are common, but technical and blue-collar roles may also be possible in Indonesia. Acumen checks the employment, worksite, safety, licensing and immigration conditions before confirming that the role fits an EOR structure.
Can an existing employee move to Indonesia and stay with our business through Acumen?
Potentially. Acumen can assess the employment and, where required, immigration structure for the move to Indonesia. If feasible, the employee can transfer into local EOR employment while continuing to work for your business operationally.
How can we build a competitive benefits package for an employee in Indonesia?
Acumen can combine the mandatory employment benefits in Indonesia with supplementary benefits selected for the role, seniority and talent market. This is particularly useful for senior, specialist or hard-to-hire positions where a statutory-only package would not be competitive.