Employer of Record · Indonesia

Hire in Indonesia without setting up an entity

Asiacruit becomes your legal employer in Indonesia. We handle contracts, payroll, BPJS and THR so you can hire without the cost and delay of setting up a PT PMA.

2

BPJS programs

Ketenagakerjaan and Kesehatan

1 month

THR holiday allowance

for 12+ months of service

7 days

THR payment deadline

before the religious holiday

72 hours

Typical onboarding

from submitted details

Asiacruit’s Employer of Record Services in Indonesia Starts at $199 per employee per month.

Market overview

Why foreign companies hire in Indonesia

Indonesia is the largest economy in Southeast Asia, with a large, young workforce and a growing digital and technology sector.

Employment is regulated under the Manpower Law as amended by the Job Creation Law, with mandatory BPJS social security and a mandatory religious holiday allowance (THR). That is why most foreign companies use an Employer of Record instead of setting up a PT PMA.

Large, young workforce

Indonesia has the largest population in Southeast Asia and a young working-age base.

Defined employment framework

Clear contract types, severance rules and social security obligations under the Manpower Law.

Time zone fit

Western Indonesia time (UTC+7) overlaps well with Singapore, Hong Kong and Australia.

Quick reference

Indonesia employment snapshot

The essentials of employing people in Indonesia, on one page.

Topic	What applies
Currency	Indonesian rupiah (IDR)
Working hours	40 hours a week: 7 hours a day over a six-day week, or 8 hours a day over a five-day week
Probation	Up to 3 months, and only for permanent (PKWTT) contracts
Contract types	PKWTT (permanent) and PKWT (fixed-term). Fixed-term contracts can run up to 5 years in total including extensions.
Minimum wage	Set by province (UMP) and, in many areas, by regency or city (UMK). See our UMP vs UMK guide for current rates.
THR holiday allowance	One month's salary for employees with 12 or more months of service, pro-rated for 1 to 12 months. Paid at least 7 days before the religious holiday.
Annual leave	12 working days after 12 months of continuous service
Maternity leave	3 months (1.5 months before and 1.5 months after birth)
Paternity leave	2 days
BPJS Kesehatan (health)	5% of wages: employer 4%, employee 1%, up to a wage ceiling of Rp 12,000,000 a month
BPJS Ketenagakerjaan (employment)	JHT: employer 3.7%, employee 2%. JP (pension): employer 2%, employee 1%. JKM: employer 0.3%. JKK: employer 0.24% to 1.74% depending on industry risk.
Income tax	PPh 21, withheld monthly by the employer
Severance	Pesangon, long-service award (UPMK) and entitlements (UPH), with a multiplier that depends on the reason for termination

Hiring options

How foreign companies hire in Indonesia

Foreign companies have three main routes to hire in Indonesia.

	Employer of Record (Asiacruit)	Own PT PMA	Independent contractor
Time to first hire	As little as 72 hours	Months of licensing and incorporation	Immediate
Setup cost	None	Significant minimum capital plus licensing and legal costs	None
Compliance	Handled by Asiacruit	Your responsibility, or outsourced	The contractor's, with misclassification risk
BPJS and PPh 21	Registered, withheld and remitted for you	Your responsibility	Not applicable if truly independent
THR	Calculated and paid on time	Your responsibility	Not applicable, but a risk if reclassified
Best for	First hires, small teams, market testing	Large teams and a permanent presence	Genuine project work only

Treating someone as a contractor when the relationship looks like employment can lead to claims for the benefits and severance an employee would have received, along with unpaid BPJS contributions and THR.

How it works

From signed agreement to first payroll

1

Agree on role and compensation

Define the job, the salary in rupiah, the benefits package and the start date. We can advise on market rates.

2

Choose your candidate

You recruit through your own channels, and we step in once an offer is ready.

3

Issue a compliant contract

We draft a compliant employment agreement under the Manpower Law, fixed-term (PKWT) or permanent (PKWTT) as the role requires.

4

Register for social security

We enrol the new hire with BPJS Ketenagakerjaan and BPJS Kesehatan.

5

Set up payroll

The employee is added to our Indonesian payroll, including PPh 21 withholding, with the pay cycle and bank details confirmed.

6

First payroll and ongoing compliance

We run payroll on schedule, remit BPJS contributions and PPh 21, and administer THR so it is paid on time. You get one consolidated monthly invoice.

Employer costs

What it costs to employ someone in Indonesia

An illustrative monthly cost for a hire on Rp 8,000,000 gross salary.

Component	Monthly (IDR)	Basis
Gross monthly salary	8,000,000	Agreed salary
BPJS JHT (old age, employer)	296,000	3.7% of salary
BPJS JP (pension, employer)	160,000	2% of salary, up to the JP wage ceiling
BPJS JKM (death, employer)	24,000	0.3% of salary
BPJS JKK (work accident, employer)	19,200	0.24% in the lowest risk class, up to 1.74%
BPJS Kesehatan (health, employer)	320,000	4% of salary, up to Rp 12,000,000
THR accrual (monthly)	666,667	1/12 of annual salary, reserved each month
Total employer cost (before EOR fee)	9,485,867	about 119% of gross

Illustrative only. Excludes the Asiacruit EOR fee, which is a flat monthly fee per employee quoted upfront and optional benefits. JKK varies by industry risk, and the JP ceiling and rates are reviewed regularly, so check the current BPJS schedules.

Employment law

Key rules every employer should know

Social security: BPJS

Every employee must be enrolled in BPJS Ketenagakerjaan (old age, pension, death and work accident) and BPJS Kesehatan (health). Contributions are remitted monthly and are shared between employer and employee.

THR holiday allowance

THR is a mandatory annual payment equal to one month’s salary for employees with 12 or more months of service, pro-rated for those with 1 to 12 months. It must be paid at least 7 days before the employee’s major religious holiday, so the date can differ by employee.

Contracts and probation

Employment is under a PKWTT (permanent) or PKWT (fixed-term) agreement. Probation is limited to 3 months and applies only to permanent contracts.

Leave

Employees get 12 working days of annual leave after 12 months of continuous service. Maternity leave is 3 months and paternity leave is 2 days.

Termination and severance

Termination must follow the Manpower Law, and severance has three parts: pesangon, a long-service award (UPMK) and entitlements (UPH). A multiplier applies depending on why employment ended, so tenure and reason both matter.

Foreign workers

Foreign nationals need a work permit and a stay permit before they start. Plan well ahead of the start date.

Why Asiacruit

Indonesian hiring, handled by a team that owns the compliance

Our own registered entity in Indonesia, so no third-party handoff
ISO 27001:2022 certified for information security
Recognised as a Great Place to Work for 2025 to 2026
A dedicated account manager for every client
In-house legal and HR specialists, not a support queue

Talk to our team

Our team supports your hires here from our regional offices. Call us or book a consultation to talk through your plans.

+1 279 895-6524 · +1 279 895-6577

Indonesia hiring guides

Costs and pay

Contributions and compliance

Compare and choose

FAQ

Frequently asked questions

Do I need a PT PMA to hire in Indonesia?

No. Through an Employer of Record, Asiacruit is the legal employer and handles contracts, BPJS registration, payroll, PPh 21 and THR. You manage the day-to-day work.

How long does onboarding take?

Most new hires are onboarded within 72 hours of submitting their details. The exact timeline depends on the country and the speed of document submission.

How much does an Employer of Record cost?

Our Employer of Record services start at $199 per employee per month, layered on top of the employee’s gross salary and statutory contributions. We confirm the final fee upfront with no hidden fees, so you know the full cost before you commit. Talk to our team for a quote.

What is THR and when must it be paid?

THR is a mandatory religious holiday allowance equal to one month’s salary for employees with 12 or more months of service, pro-rated for shorter service. It must be paid at least 7 days before the employee’s major religious holiday.

Which BPJS programs are mandatory?

Both BPJS Ketenagakerjaan (old age, pension, death and work accident) and BPJS Kesehatan (health). Employers and employees each contribute, and the employer remits them monthly.

Is an Employer of Record or a PT PMA better for my first hires?

For first hires and small teams an Employer of Record is usually faster and lower risk, because you avoid incorporation, licensing and minimum capital requirements. A PT PMA tends to make sense once you have a larger, permanent team.

Ready to build your team in Indonesia?

Book a free consultation to get a clear quote and see how quickly your first hire could start.

Prefer to talk? +1 279 895-6524 · +1 279 895-6577

helpdesk@asiacruit.com

sales@asiacruit.com

+1 279 895-6524

+1 279 895-6577