The individual income tax ranges from 5% to 35%. Income tax is calculated according to progressive rates.

The employer cost is generally estimated at 4.24% of the employee salary.

• Provident fund - 3.70%
• Death Security - 0.30%
• Work-related accident benefit - 0.24%
• Healthcare and social security - IDR 480,000
• Pension Fund - IDR 191,192 for monthly gross salaries higher than IDR 9,559,600.

Standard working hours are 8 hours per day for 5 working days, and 7 hours per day for 6 working days, totalling 40 hours per week. The standard work week is from Monday to Friday.

Overtime in Indonesia is complex. Overtime payment is not mandatory. Hours outside of standard work 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% to 400% of hourly wage depending on if it is a regular work day or weekend as well as the number of overtime hours worked.

• 150% of the hourly rate, the first 1 hours.
• 200% of the hourly rate, the following hours.

For employees working on the weekend or public holiday overtime is calculated as follows:

• 200% of the hourly rate, the first 8 hours.
• 300% of the hourly rate, the following 1 hour.
• 400% of the hourly rate, the following 2 hour.

Pregnant employees are entitled to 3 months of paid leave. 1.5 months must be taken before the child's birth. The remaining 1.5 months must be taken after the child’s birth. The employee will receive 100% of the salary during this period, and the employer will be responsible for this pay.

The employee cannot extend leave.

Employees are entitled to 2 days of paid paternity leave. The employee will receive 100% of their average salary during this period, and the employer will be responsible for this pay.

The employee cannot extend leave.

There is no maximum number of days that an employee can use sick leave. This leave is paid at different rates by the employer depending upon length:

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Indonesia can be complex. There is no at-will termination in Indonesia for employers outside the probation period and termination must be done for just cause.

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Death of worker
• Completion of assignment
• By expiration of the contract
• Unilaterally by the employer based on:
  • probation period
  • objective grounds
  • disciplinary dismissal
  • performance due to unsuitability for the job
  • merger or acquisition of company
  • bankruptcy
  • inability to work due to medical conditions

In Indonesia there is no minimum notice stipulated in law. Generally termination by the employer lasts:

• Notice during probation period - 7 days
• Minimum notice period - 30 days

Termination by employee:

• Minimum notice period - 30 days

In Indonesia, all employees who are terminated are entitled to severance pay. Severance pay will depend on the length of employment and base salary.

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

Indonesia celebrates 15 national holidays. National holidays include:

• 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

Contracts must be in Indonesian language and latin alphabet, and can be bilingual. They must be in writing and signed by both parties.

A contract must include:

• Name, address of the company, and nature of business
• Position
• Place of work
• Salary and payment method
• Terms of employment which cover the rights and obligations of employer and employee
• Start date and period of employment agreement
• Place and date of the employment agreement is made