Employer of Record & PEO in Indonesia | INS Global

Employer of Record in Indonesia & PEO

Hire Globally, Pay Locally, Expand Effortlessly

A PEO (Professional Employer Organization), similar to an EOR (Employer of Record), is a local partner for companies seeking to expand globally. A PEO can offer HR outsourcing services on behalf of the client company to allow them to hire or transfer employees without going through the complex process of company incorporation. 

A PEO in Indonesia can provide companies with a cost-effective, quick, and simplified global mobility and expansion strategy by taking care of essential HR services and offering compliance assurance in unfamiliar markets. INS Global’s PEO in Indonesia allows companies to hire or transfer employees within 48 hours.

An Employer of Record in Indonesia is an organization that acts as the Employer of Record for companies wishing to streamline the global expansion process. By making hiring and managing overseas employees simpler, cheaper, and safer through their innovative technology-based EOR solution, INS Global offers locally based solutions to global employment problems.

INS Global is a professional HR outsourcing services provider with over 15 years of experience providing PEO services in 100+ countries. If you are looking to expand into the Indonesian market, INS Global can provide you with the services necessary to cut through red tape while saving time and money

Want to have a Team in Indonesia TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Want to have a Team in Indonesia TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Employer of Record in Indonesia & PEO - Summary

Employer of Record in Indonesia & PEO

What Can a PEO do for You?

Ensure Full Legal Compliance

A PEO provides expert legal advice on all matters concerning regulatory compliance, meaning you are fully covered at every step 

Reduce Costs and Setup Time

A PEO helps you avoid arduous processes required for company incorporation and provides a more efficient alternative 

Focus on What Matter for Your Company

Why spend months on regulatory tasks when you can have a PEO take care of every HR matter for you?  

Enter a New Market Quickly

Instead of the months estimated to set up a new company in a foreign market, work with a PEO to get started in a matter of days 

Streamline Your Company Structure

Work with one point of contact to take care of the matters that would otherwise require an entire department or team 

Why Choose A PEO Over Company Incorporation?

Establishing a separate legal entity in a foreign county is an often confusing and complicated process. For many companies, the advantages afforded by company incorporation aren’t worth the time and effort it takes to do successfully. Instead, a Global PEO offers a hassle-free way to outsource a company’s HR services and get started in a new market. The services provider’s knowledge and expertise give companies bonus advantages in their new endeavor. 

A PEO can: 

  • Save time  
  • Save money 
  • Prevent costly legal errors 
  • Make the most of local resources and established networks

PEO/EOR vs Company Incorporation

The Advantage in Figures

PEO/EOR Company Incorporation
80% Less Expensive
Market Entry
2-5 Days
6 Months
Employee Turnover
Decrease by 14%
98% of the Current PEO Clients
Administrative Fees
Saves an Average of $450
Costly Payroll and Compliance Fines
Help Avoid
Company Growth Rate
7 - 9%
Closed During Pandemic


Manuel Ramos


Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.


How Would a PEO in Indonesia Function for You?

INS Global provides an all-in-one PEO solution that allows you to get started in Indonesia in 4 simple steps: 

  1. Discuss your PEO needs with an INS Global HR expert 
  2. Allow INS Global to take care of hiring and legally establishing your employees in Indonesia 
  3. Let us take organize payroll and other HR operations for your staff 
  4. Watch your employees perform their jobs as normal while we manage the rest 

How Different are PEOs and Employer of Records?

When you want to learn more about how a PEO can benefit your company, it’s likely you’ll see them often compared to Employer Of Records. While both operate in largely the same way, there are some differences between the services.  

  • A PEO typically provides HR services like payroll, tax calculation, and compliance checks to employees of another company  
  • A PEO makes an agreement with the employee’s original country to provide these services 
  • An EOR typically hires the staff member in a fully legal and official way while providing the services of a PEO 
  • An EOR makes a contract directly with the employee on behalf of their company 

INS Global’s PEO service in Indonesia can legally hire and pay staff on your behalf, therefore combining the functions of a PEO and an Employer of Record in Asia as it suits your requirements.  

Labor Law in Indonesia 2023

Employment Contracts in Indonesia

Indonesian law allows for contracts to be made for either a definite or indefinite term, based on requirements and consent by both parties. 

Fixed-term contracts are often more highly scrutinized and are required to be written. They can last for up to 2 years; however, if renewed and extended can be made to last for as many as 5 years.  

A probation period for an indefinite contract in Indonesia can include a probation period of up to 3 months.  

Indonesia has a minimum wage that is set at a provincial level.  

Working Hours and Overtime in Indonesia

Employees in Indonesia can typically choose between a 5- or 6-day working week, with either 7 or 8 hours of work per day respectively, for 40 hours allowed per week in both cases. 

All extra work hours, to a maximum of 14 per week, are considered overtime. Overtime pay is complex, being based on the number of hours and when the overtime occurs. Typically, overtime pay starts at 1.5x the standard salary rate. Additional rates also apply if an employee is asked to work on a holiday or rest day.  

Holidays and Annual leave in Indonesia

Employees in Indonesia are entitled to 15 days of public holidays per year due to the multi-ethnic and multi-religious nature of the country. Many of these holidays are based on a lunar calendar, and employers are expected to arrange additional days off if these holidays fall on a weekend.  

Employees of an Indonesian company for over 1 year are entitled to a minimum of 12 days of annual leave, at least 6 days of which must be taken in one continuous block.  

Sick Leave in Indonesia

Employees in Indonesia have a very generous amount of sick leave. The first four months that they are unable to work will be paid at 100% normal salary rate by their employer. After 4 months, this rate begins to drop, and an employer may terminate an employee’s contract after 12 months. 

Maternity and Paternity Leave in Indonesia

Mothers in Indonesia are entitled to 1.5 months paid maternity leave before birth and 1.5 months of paid leave after delivery.  

Fathers are entitled to 2 days of paid paternity leave.

Tax Law in Indonesia

Indonesia reformed its tax regulations in 2021 with the HPP (Harmonization of Tax Regulations Law), yet further changes may occur in the near future.  

Corporate tax in Indonesia is typically around 22%, with some exceptions for the company’s size.  

Individual tax on all salary earned in Indonesia is applied to anyone who lives in Indonesia for over 183 days during a fiscal year. 

Employers are expected to withhold wages for employees and arrange for their taxes to be paid.  

Currently, individual tax rates are based on a progressive scale of:

  • 5% for up to IDR 50 million      
  • 15% for IDR 50 million to IDR 250 million      
  • 25% for IDR 250 million to IDR 500 million    
  • 30% for IDR 500 million to IDR 5 billion 
  • 35% for over IDR 5 billion 


Social security and insurance contributions are governed by a complex system of rules, and employers are expected to contribute around 12% of an employee’s salary towards their contributions.  

Employer of Record in Indonesia & PEO


Discover More Solutions in Indonesia


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 13thmonth 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.