Employer of Record in Indonesia & PEO

The price of professional EOR services in Indonesia is calculated as a percentage of a co-employed worker’s monthly compensation. This price includes all HR tasks required to ensure compliance with all local employment rules.  

An Indonesian EOR is a safe, legitimate, and efficient way to handle employer responsibilities there without having to establish a specific corporate structure. EORs accomplish this by hiring local legal professionals and offering top-notch HR assistance. 

With an EOR service agreement, your team members will be paid accurately and on time each month, have access to all Indonesian employee benefits, and be completely protected by the law.  

While having full control over their work, independent contractors who interact with their clients within an Indonesian EOR framework may be eligible for many or all of the same benefits as regular employees. This is the same as if they were working via an umbrella organization.  

Our team of expert recruitment consultants can find the best local talent in Indonesia for your needs by making use of their wide professional networks, in-depth knowledge of regional business resources and benchmarks, and consistent commitment to ethical hiring practices.  

As a result, integrating these recruits into our EOR framework will be easier and more effective than if they were hired via more conventional methods. 

You get complete compliance-assured employment outsourcing help from a genuinely international EOR services provider through INS Global. This satisfies all local, regional, and national regulations.  

Some PEO or EOR service providers in Indonesia may have minimum hiring requirements or a limit on the number of employees you may hire at once. However, INS Global is aware that as part of your worldwide business strategy, you might need to scale up or down quickly at any time. Working with us, therefore, provides you the freedom to employ however many or few employees you need to achieve your goals. 

The cost of hiring in Indonesia should take into account factors like salary, recruiting service fees, signing bonuses, and other direct and indirect expenses including incentive programs, foreign employee tax management, and social insurance contributions payment.  

By using Indonesian PEO services, you can avoid time-consuming incorporation regulations by avoiding the need for a local address.  

However, giving your employees the option to work in a shared workspace or giving them the freedom to do so whenever and wherever it’s most convenient is still a good idea. 

Absolutely. Where local employment laws, tax laws, or employee benefits differ for Indonesians or foreigners, we can manage the necessary visa and work permit processes.  

For enterprises of all sizes, from SMEs to multinational corporations, EOR and PEO solutions are ideal for ensuring the efficient and secure employment of foreign or local workers. Our services can swiftly scale up to meet increasing employment demands as needed, and they can take the place of more complex internal HR requirements.  

The legal expertise provided by PEO and EOR services would be very helpful for businesses in a variety of industries that either don’t have their own structures in a target country (or seek to avoid cost-scaling difficulties while focusing on expansion).

Staffing firms and umbrella corporations are two kinds of third parties that may be used to directly or indirectly hire independent freelancers.  

In Indonesia, the majority of independent contractors are either self-employed or run their own small enterprises. Contractors must be hired in accordance with a work agreement rather than an employment contract, according to Indonesian law. 

Before work starts, an independent contractor can be required to provide a CV, portfolio, verified references, and possibly a signed NDA.  

Employers in Indonesia manage payroll for all workers typically at the end of every month, with employers being responsible for withholding amounts and organizing payment of employees’ individual income tax and social security fund contributions.  

There is no single national minimum wage in Indonesia, but instead, minimum wages are determined by region. For 2023, the government announced that it was increasing mandated minimum wages by 10% across the country. 

There are many types of visas available to applicants when traveling to Indonesia. The most commonly applicable visa for work purposes are: 

• Business Visa – These are multiple entry visas with the option for validity for up to 1 year with holders being allowed to stay in the country for up to 60 days at a time. These allow the holder to conduct limited business operations in Indonesia such as attending meetings or conferences.  
• Work Visa – These are visas allowing the holder to live and take up employment in the country for up to a year with the option for renewal. They require the applicant’s employer in Indonesia to apply on their behalf and can take up to several months to receive.  
• Digital Nomad Visa – These are upcoming visas specifically designed for remote workers to live and work in Indonesia for an overseas company while paying taxes abroad. They will allow the holder to stay in Indonesia for up to 60 days at a time once the visa officially launches.  

In Indonesia, employers are responsible for organizing and withholding employees’ income tax payments and social security fund contributions every month. Employers in Indonesia also have to contribute an equivalent of 3.7% of an employee’s salary to both their social security fund and pension fund (with employees paying a separate 2% to each) 

Employees in Indonesia are entitled to a state pension, a 13th–month bonus, public holidays, paid leave (sick leave, annual leave, and parental leave), as well as health insurance.  

Unilateral changes to an employee’s contract are not permitted in Indonesia. Any changes to an employee’s working conditions must be agreed upon by both parties. As a result, it’s suggested that working contracts should be made in writing, with all amendments signed by employer and employee together.  

Mandatory health insurance is organized for all Indonesians through the Jaminan Kesehatan Nasional (JKN). This is funded through social security contributions. However, foreign employees and many Indonesians still prefer a mix of public and private health insurance due to poor coverage and quality of services.  

Employers in Indonesia wishing to terminate an employee’s contract must give the employee notification (including the reason for termination and all termination entitlements) at least 14-30 days before the expected date of termination.  

Severance payments are equivalent to 1 month’s salary per year of employment, with additional long service payments being expected for employees who have worked in a company for longer than 3 years.  

Indonesian labor law establishes the Ministry of Manpower and Transmigration (MOMT) as the overseer for all matters relating to labor rights or disputes in the country.  

Employees in Indonesia are eligible for leave on the country’s 16 nationally recognized public holidays. These may also be augmented by local or regional holidays.