Javanese, Sundanese

Western Indonesian Time (UTC+07:00)

Undoubtedly, payroll is a critical process for any organization. The pay cycle refers to the period an organization pays its employees, which can vary depending on the pay frequency that the organization chooses to adopt.

Indonesia follows a monthly pay cycle.

There is no policy pertaining to the 13th salaries in Indonesia.

The minimum wage requirement varies based on the local government regulations ranging from 1,958,169 IDR in Central Java to 5,067,381 IDR  in DKI Jakarta.

The maximum overtime hours are 4 per day and 18 per week. Overtime worked during weekdays is paid 150.00% of the regular hourly wage for the first overtime hour, increasing to 200.00% for every subsequent overtime hour.

No law or regulation in Indonesia explicitly regulates the collection, use, or handling of an applicant’s personal data, including protecting the privacy of an employee’s particulars.

There is no special legislation for hiring.

Aside from reviewing the employment contract and the usual formalities surrounding onboarding, there is no specific legislation pertaining to the onboarding process.

In Indonesia, probationary periods are usually three months.

The following national holidays are recognized in Indonesia:

• Jan 1: New Year's Day
• Jan 22: Chinese New Year
• Feb 18: Ascension of the Prophet Day
• Mar 22: Holy Day of Silence
• Apr 7: Good Friday
• Apr 22 and Apr 23: Eid al-Fitr
• May 1: Labor Day
• May 18: Ascension of Jesus
• Jun 1: Pancasila Day
• Jun 4: Vesak Day
• Jun 29: Eid al-Adha
• Jul 19: Islamic New Year
• Aug 17: Independence Day
• Sept 29: Prophet's Birthday
• Dec 25: Christmas

Paid leave in Indonesia is set in the employment contract as at least 12 days of paid annual leave per year after completing one full year of employment. Employees who have been working for six consecutive years for the same employer are entitled to one month of leave in the seventh year of service and one month of leave in the eighth year of service.

In Indonesia, sick leave regulations are primarily governed by the Manpower Act No. 13 of 2003.

Duration and Payment:

Employees are entitled to sick leave based on medical necessity, supported by a medical certificate.

The payment structure for sick leave is as follows:

• First 4 months: 100% of the employee's salary.
• Next 4 months: 75% of the employee's salary.
• Following 4 months: 50% of the employee's salary.
• After 12 months: 25% of the employee's salary until a replacement is found or until the employee returns to work.

Use of Annual Leave for Sickness:

Employees may utilize some of their allocated annual leave (12 days per year after 12 months of continuous service) for short-term sick leave if they prefer.

Medical Documentation:

A medical certificate from a physician is required to validate the sick leave. This ensures that the leave is officially recognized and paid according to the stipulated percentages.

Additional Provisions:

• There are no specific maximum days defined for sick leave; it is determined by the employee's health condition as certified by a doctor.
• Sick leave does not deduct from the employee's annual leave entitlement, ensuring that employees can take necessary time off without penalty.

• Working mothers are entitled to a minimum of three months of paid maternity leave after childbirth.
• The leave can be extended for an additional three months if the mother has a medical condition, as certified by a doctor. 
• During the first four months of leave, the mother will receive 100% of her salary. For the fifth and sixth months (if extended), she will receive 75% of her salary.
• Employees who experience a miscarriage are entitled to 1.5 months of additional leave, which can be extended with a doctor's certificate.

According to the new law passed on June 4, 2024, male employees in Indonesia are entitled to the following paternity leave benefits:

• Two days of paid paternity leave which can be extended by a further three days
• Two days of paid leave in the event of a miscarriage

The law aims to promote fathers' involvement in caring for their newborns and supporting their wives during this crucial time. However, the legislation does not specify if there are any financial incentives for companies to agree to additional paid paternity leave beyond the mandatory minimum.

It remains unclear how the required presence of the father at birth would be enforced by the government. The implementation of these new paternity leave rules will depend on the forthcoming Government Regulations and Presidential Regulations that will provide further guidelines.
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Employees are entitled to paid child leave in the following circumstances:

• 2 days paid leave for the circumcision of the employee’s chil
• 2 days paid leave for the Baptism of the employee’s child
• 2 days paid leave for the marriage of the employee’s child
• 2 days paid leave for the death of the employee’s child.

The reasons for which employees can be discharged from work are as follows:

• The employee violates the employment agreement
• The employee is imprisoned
• The employee has been ill for more than 12 months
• The employee is absent from work for more than five days without a valid reason, provided they have been notified twice
• The employee has reached retirement age

Not all employee dismissal reasons should be related to their misbehavior. The employer can discharge employees for several business-related reasons:

• There can be a change in the company's status, its merger with another business, or the acquisition of its ownership
• The employer becomes insolvent
• The employer has suffered continuous losses for two years consecutively, as proven by financial reports
• The employer is closing the business permanently

Notice periods within Indonesia are generally 30 days, although employers can specify longer notice periods within the employment contract.

Severance pay is mandatory if applicable and is determined by the employee's length of service.

• Less than 1 year – 1-month wage
• Between 1 and 2 years – 2 months' wage
• Between 2 and 3 years – 3 months' wage
• Between 3 and 4 years – 4 months' wage
• Between 4 and 5 years – 5 months' wage
• Between 5 and 6 years – 6 months' wage
• Between 6 and 7 years – 7 months' wage
• Between 7 and 8 years – 8 months' wage
• More than 8 years – 9 months' wage

There are two types of Visas for foreign nationals who intend to live and work in Indonesia.

Electronic ITAS (e-ITAS) - Employers need to apply for an ITAS on behalf of future employees. The ITAS grants employees the right to stay in Indonesia and open a bank account. They can also stay in the country and, after three years, apply for permanent residency.

Before applying for the ITAS, the employee must also get a Visa Izin Tinggal Terbatas (VITAS) – an Indonesian limited-stay permit visa.

The Kartu Izin Tinggal Tetap (KITAP) is a visa an employee can also apply for, which grants the employee a permanent residence permit (KITAP), but this is only available to people who have held an ITAS for three or more years.

• Criminal Records - Yes
• Medical History - If required for employment
• Drug Screening - If required for employment
• Credit Checks - If required for employment
• Social Media - No

Employers in Indonesia frequently carry out background checks on applicants. Indonesian employment laws do not expressly regulate background checks. Certain background checks are in practice subject to the consent of the applicant.