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Compensation & Benefits in IdIndonesia.






Country Capital



Indonesian rupiah (Rp) (IDR)

When expanding your company to Indonesia, you must learn the country’s compensation and benefits best practices. This includes providing the right level of compensation that meets Indonesia’s compensation laws and helps ensure your company stays compliant.

Indonesia compensation laws

Minimum wage rules in Indonesia depend on your company’s location and the financial requirements of that province. However, after an employee works more than 1 year, the minimum wage laws no longer apply, and the employer may renegotiate compensation with the employee.

Collective Bargaining Agreements (CBAs) can also dictate compensation laws in Indonesia. One agreement will cover the entire enterprise and is valid for 2 years. Negotiations can start within 3 months of expiration, and companies should include wage growths and bonuses in those agreements. If not, they need to negotiate with employees to determine the right level of compensation for the position.

Guaranteed benefits in Indonesia

Indonesia benefits management plans must include statutory benefits required by law. This includes time off for the country’s 15 public holidays. Employees also get paid annual leave of 12 days per year.

Healthcare is part of the Workers Social Security Scheme in Indonesia funded through payroll taxes and the general budget. Employers must enroll all employees in the system, including expats.

Indonesia benefits management

Companies can consider offering additional benefits that are not mandatory to improve morale and dedication to the company.

Since much of the population of Indonesia is Muslim, companies should consider dispersing benefits differently. For example, all employees get a mandatory 13th-month bonus called THR. It’s a religious day allowance paid most commonly 1 week before a holiday — Eid al-Fitr for Muslims and anytime in December for non-Muslim employees.

Restrictions for benefits and compensation

The biggest restriction for benefits and compensation is the need to establish a subsidiary before companies can hire employees and add them to payroll. The incorporation process can take weeks or months, depending on the type of entity.

Partner with G-P to build your everywhere workforce.

As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.

Learn more about our platform and request a proposal today.


THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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