Indonesia

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Country Snapshot

The GPS Country Snapshot includes 25 sections of information about labor law compliance in Indonesia. See a sample of popular sections below.

Termination of Employment

There are no provisions regarding notice periods before dismissal in Indonesia because a work agreement only comes to an end under one of the following circumstances:

  • The employee dies
  • The employee is terminated during the probationary period
  • The work agreement expires
  • The employee voluntarily resigns/retires
  • A decision of the Institute for the Settlement of Industrial Relations Disputes, which has permanent legal force, ends the agreement.
  • There is a certain situation or incident prescribed in the work agreement, the enterprise’s rules and regulations, or the enterprise’s collective work agreement which effectively results in the termination of employment.

All dismissals, except the dismissal during the probationary period, must be approved by the Institution for Industrial Relations Disputes.

Work Permits

An employer who intends to hire foreigners must first obtain an RPTKA (Rencana Penempatan Tenaga Kerja Asing, or Expatriate Placement Plan), which must include the number of foreign workers required, the period of work and the replacement plan with Indonesian employees.

After receiving approval of the RPTKA, the sponsor company can apply for a work permit (IMTA) which can be issued for work that is:

  • Urgent/emergency (1 month)
  • Temporary (2-6 months)
  • Long-term (7-12 months)

Foreign nationals must also apply for a Limited/Temporary Stay Work Visa (VITAS) that allows stay for up to 2 years and can be extended. They must submit a copy of their RPTKA and IMTA for this application. 

Paid Annual Leave

Per the labor law of Indonesia, female employees are entitled to 1.5  months of rest before the estimated birth time (by an obstetrician or a midwife) and another 1.5 months of rest after that (for a total of three months of paid maternity leave). It can be extended in case of any medical complications. A female employee who has a miscarriage has a right to a paid period of rest of 1.5 months or a period of rest stated in the medical letter issued by the obstetrician or midwife who treats her.

Female employees are entitled to receive their full wages during maternity leave, paid by the employer.

Working Hours

The regular workweek is 40 hours, and employees who work over 40 hours a week are eligible for overtime. Employers can distribute the 40 working hours in a week in the following ways:

  • No more than 7 hours a day for 6 working days in a week, or
  • No more than 8 hours per day for a 5-day week

The employee can work overtime if they agree to do so. The maximum amount of overtime the employee is allowed to make is 3 hours a day and 14 hours a week. The employee is entitled to a rest of 1 day after 6-day working week and 2 days after a 5-day working week. 

Maternity Leave

Per the labor law of Indonesia, female employees are entitled to 1.5  months of rest before the estimated birth time (by an obstetrician or a midwife) and another 1.5 months of rest after that (for a total of three months of paid maternity leave). It can be extended in case of any medical complications. A female employee who has a miscarriage has a right to a paid period of rest of 1.5 months or a period of rest stated in the medical letter issued by the obstetrician or midwife who treats her.

Female employees are entitled to receive their full wages during maternity leave, paid by the employer.

Minimum Wage

Per labor regulations on wages, the governor of each province stipulates a Provincial Minimum Wage. 38 provinces have established a Provincial Minimum Wage in 2024. Wage levels range from IDR 2,125,897 (Indonesian rupiah) in Yogyakarta to IDR 5,067,381 in Jakarta. Provincial Minimum Wage only applies if the Regency/City Minimum Wage is not established.

In Indonesia, the minimum wage is the lowest monthly wage consisting of the basic wage, including fixed allowance. It is calculated according to the following formula stipulated in the Government Regulation (GR) No. 78/2015: new minimum wage = current minimum wage + (current minimum wage x (inflation + % GDP annual increase during the year)).

Minimum wage only applies to:

  • Single employee
  • Employees who have a working period of up to 1 year
  • Employees with permanent contract employment status and/or in probation period

For employees who are married and/or have more than a one-year working period, employers are required to apply the pay scale structure.

Country Profile

The GPS Country Profile contains detailed information on over 60 topics related to labor law compliance within Indonesia.
  • Type of Employment Relationship
  • Permanent Employment
  • Fixed-Term or Specific-Purpose Contracts
  • Temporary Employment Contracts
  • Part-time Employment
  • Young Worker Employment
  • Vendors and Independent Contractors
  • Types of Contracts
  • Probationary Period
  • Termination of the Contract of Employment
  • Grounds for Termination
  • Notice of Dismissal
  • Fair Dismissal
  • Redundancy
  • Unfair Dismissal
  • Suspension of Contract of Employment
  • Severance Benefits
  • Hours of Work
  • Work Week and Timekeeping
  • Night Work and Shift Work
  • Overtime
  • Remote Work
  • Required Time Off
  • Public Holidays
  • Annual Leave
  • Sick Leave
  • Maternity
  • Other Forms of Leave
  • Social Insurance and Retirement
  • Social Security Contribution
  • National Retirement Scheme
  • Dependents’/Survivors Benefit
  • Life and Disability Insurance/Benefit
  • Statutory Allowances
  • Compensation and Benefits
  • Minimum Wage (Basic Wage)
  • Bonuses, Profit Sharing and Other Compensation
  • Medical Insurance
  • Work Environment
  • Workplace Safety and Health
  • Prohibition of Discrimination
  • Prohibition of Harassment
  • Data Protection and Privacy
  • Whistleblowers and Retaliation
  • Workers’ representation in the organization
  • Freedom of Association
  • Registration and Recognition of Unions
  • Trade Union Personality
  • Collective Bargaining and Agreements
  • Disputes and Settlements
  • Strikes and Lockouts
  • Unfair Labor Practices
  • Taxation of Compensation and Benefits
  • Income Tax
  • Taxation of Employee Benefits
  • Tax Filing and Payment Procedures
  • Double Tax Relief and Tax Treaties
  • Visas and Work Permits
  • Visas
  • Work Permits and Residence Permits

 Country Snapshot

Get the full Country Snapshot with 25 sections of information about labor law in Indonesia.