EOR Service in Indonesia

Shraddha Saxena

Hire, Onboard and Pay Employees in Indonesia Quickly and Efficiently

Hiring in Indonesia at a glance

CURRENCY
Indonesian Rupiah (IDR)
working hours
8 hours a day / 40 hours a week
public/bank holidays
15
capital
Jakarta
language
Bahasa, Indonesian, English
date format
DD/MM/YYYY
remote workers
1.2M
tax year
January 1st to December 31st
minimum hourly salary
No minimum wage
CURRENCY
Indonesian Rupiah (IDR)
public/bank holidays
15
capital
Jakarta
language
Bahasa, Indonesian, English
date format
DD/MM/YYYY
tax year
January 1st to December 31st
payroll frequency
Monthly
GDP
4.5 trillion Indonesian rupiah (est. 2022)
working hours
8 hours a day / 40 hours a week

Employer of Record in Indonesia

Hiring in Indonesia with an EOR can help companies hire swiftly by removing the need to establish a legal entity in the country.  An EOR handles all administrative tasks related to employment, including payroll, tax, and benefits management, as well as regulatory compliance. 

As EORs take up the role of a primary employer, companies can focus on their core business functions, and rapidly scale their workforce in new markets. They handle the employee benefits adhering to the local labor laws. By using an EOR in Indonesia, companies can optimize their hiring process, and manage risks associated with international labor laws.

Why use Indonesia EOR?

The primary benefit of partnering with an EOR is that companies can hire employees 100% in compliance with Indonesian labor laws and employment regulations. For instance, Indonesian law requires employers to provide certain benefits, such as religious holiday allowance (THR), health coverage, and pension funds. EORs can take care of these aspects and reduce compliance risks. Further, EORs can also handle the aspect of Labor Unions and its regulations in Indonesia. They can help companies generate Collective Labour Agreements (CLA) recognized by the Manpower Law.

Gloroots, a SaaS-driven EOR, simplifies your global expansion. Our platform enables fast employee onboarding, tax compliance, and payroll administration. We also assist with localized benefits and insurance plans for your global workforce which you can offer from the Gloroots platform to retain talent. In short, you can streamline operations and keep up with the changing compliance scenario with Gloroots as your trusted EOR partner in Indonesia.

EOR Costs in Indonesia

EOR costs generally include a setup fee and an ongoing management fee, which is often a percentage of the employee's salary. This fee typically ranges from 5-20% but can vary depending on the complexity of the services provided and the number of employees being managed.

These fees usually cover a comprehensive suite of services, such as payroll administration, local labor law compliance, benefits administration, tax reporting, and more.

EOR pricing in Indonesia can vary depending on the number of employees, the scope of services required, and the specific EOR provider. When considering EOR services, ensure getting custom pricing quotes to assess and choose the most suitable option for your business needs. 

Gloroots’ pricing model is simple and provides optimum investment value. We manage admin tasks and legal compliances associated with employment. Gloroots offers a live dashboard that helps you track your Indonesian workforce’s expenses in real time. It also offers HR support and benefits management to the employees hired through EOR.

Key Metrics For Foreign Employers

With a strong economy, strategic location, and a young workforce, it's a hub of opportunities. benefit from its culture, diverse markets, and business-friendly environment. Leverage infrastructure development and embrace entrepreneurship. 

Factors Global Ranking Interpretation
Rule of law 81 Indicates effectiveness of law enforcement
Labour-employer cooperation 32 Indicates positive labor-employee relationships
Reading Maths, and Science 71 Indicates average scores in OECD's survey of 15-year old students
University Ranking 32 Indicates average QS rankings
Labour productivity per employee 58 Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 82 Indicates findability of skilled talent
Workforce with tertiary education 92 Indicates % of workforce with PG degrees
Digital Skills 55 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2023

Through Gloroots' Recrew platform, you can effortlessly connect with exceptional talent in Indonesia and effectively grow your team.

Why work in Indonesia?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Risks of misclassification

Proper employee classification is crucial in Indonesia to avoid legal issues. Opt for a reliable PEO/EOR to safeguard your business. They ensure compliance, accurate classification, and smooth payroll. These experts also manage benefits for your workforce's protection. Trust them for employment tasks in Indonesia while you focus on your business.


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Avoid hefty penalties with Gloroots.

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Employing in Indonesia

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Employee Income Tax Rate Range
Up to 60 M IDR 5.00%
60M IDR – 250M IDR 15.00%
500M – 5 billion IDR 25.00%
5 billion IDR and over 30.00%

Employer Payroll Contributions Rate Range
Work Accident 0.24% – 1.74%
Old Age 3.70%
Death 0.30%
Pension 2.00%
Health Insurance (maximum of 480,000 IDR) 4.00%
Total Employment cost 10.24% – 11.74%

Employee Payroll Contributions Rate
Old Age 2.00%
Pension 1.00%
Health Insurance (maximum of 120,000 IDR) 1.00%
Total Employee Cost 4.00%

Separation

Termination Process:

Terminating an employee should be carried out meticulously in Indonesia. 

Before letting go of an employee, employers must try to find solutions and agreements, like adjusting schedules or giving extra training. If firing the employee becomes necessary, the reasons for the decision should be clearly explained in writing. If the employee thinks the firing is unfair, they can challenge it in the Labor Court.

Employees can be fired for different reasons, like breaking the work agreement, being imprisoned, being sick for more than a year, or not coming to work without a good reason. It's important to know that not all reasons are about the employee's behavior. Employers might also have valid business-related reasons, like company changes, merging with another company, financial issues, or closing down the business permanently.

Notice Period:

Typically, notice periods in Indonesia are set at 30 days, although employers have the option to stipulate longer notice periods in the employment contract.

Severance Pay:

In Indonesia, the entitlement to severance pay is determined based on the employee's length of service:

Years of Employment Severance Pay (Months' Wage)
Less than 1 year 1
1 year - less than 2 years 2
2 years - less than 3 years 3
3 years - less than 4 years 4
4 years - less than 5 years 5
5 years - less than 6 years 6
6 years - less than 7 years 7
7 years - less than 8 years 8
8 years or more 9

Probation Periods:

The probation period for permanent employees in Indonesia is set at three months.

Start Hiring in Indonesia today

Global hiring comes with challenges. From navigating employment laws to ensuring compliance with payroll processes, data protection regulations, and more. Setting up infrastructure abroad and staying updated on evolving compliance requirements can be overwhelming. 

Gloroots simplifies the process of cross-border hiring by offering a centralized solution. The EOR solution handles everything – from onboarding, payments, administrative activities, to tax compliance, and more. Our in-market expert team absorbs all employment and payroll related risks by providing compliant employment contracts, timely payments, and tailored benefits. In short, Gloroots lets you focus on finding the right talent while we handle the complexities. 

Contact our experts today to kickstart your global hiring campaign in Indonesia.

Grow your team in Indonesia

Unlock growth in Indonesia with Gloroots as your trusted Employer of Record (EOR). We handle payroll, tax, benefits, and compliance, letting you focus on employees and company growth. Partner with Gloroots' Indonesia EOR for streamlined operations and compliance with employment laws. We manage cross-border complexities, ensuring a smooth expansion. Focus on talent and team growth while we handle compliance and payroll. Trust Gloroots to navigate Indonesia's labor market and unlock your business potential.

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Experience Seamless Hiring in Indonesia?

Let us take care of all your employment needs. We guarantee easy onboarding & compliant workforce management in Indonesia.

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