Employer of Record & PEO in Indonesia

Hire & manage teams remotely in Indonesia without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

Native Language


Employee Protection


Payroll Frequency


Capital city







Indonesian Rupiah (IDR)



English Speaking



270.20 Million

Employment Cost


Cost of Living


How NNRoad Employment & PEO Services Work?

NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in Indonesia. Registering a legal entity in Indonesia as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in Indonesia in full accordance with local labor laws in under a week.

Employer of Record in Indonesia

Employer of Record (EOR) services are for companies who do not have a legal entity in Indonesia, but who want to hire in Indonesia. Employment and full liability are outsourced to NNRoad.

➊ You interviews & select the candidates you want to hire in Indonesia.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes  payroll in Indonesia in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Indonesia while NNRoad manages payroll & HR liabilities.

  • Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation
  • Hiring of and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire, confidentiality agreement)
  • On-boarding and off-boarding employees following local law practice
  • Complete payroll solution and statutory benefit administration
  • Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law
  • Mandatory social security compliance: Health Care Security; Work Accident Security; Old-Age Security (Social Insurance); Pension Security (Provident Fund); and Death Security
  • Working VISA application assistance, if needed
  • Local individual income tax reporting, if needed and tax clearance for expatriates

Payroll & PEO in Indonesia

Professional Employment Organization (PEO) services are for companies who have a legal entity in Indonesia, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.

➊ You interviews & select the candidates you want to hire in Indonesia.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in Indonesia while NNRoad manages payroll & HR compliance.

  • Registration of the necessary company and personnel information for payroll calculation in the payroll software and system
  • Monthly payroll processing, including calculation of salaries, calculation and contribution of social security benefits like BPJS Ketenagakerjaan (Social Security), Dana Pensiun (Pension Fund) reporting and returns
  • Year-end adjustments and annual declaration

Advantages of NNRoad's Indonesia Employment Services

  1. With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in Indonesia.
  2. Pay as you go
  3. ​​Dedicated account manager – One point of contact for multiple locations
  4. Employment & termination processing
  5. Complete payroll solution and statutory benefit according to local laws
  6. With EOR/PEO solutions you can hire staff while waiting for the registration of your company in Indonesia.
  7. NNRoad only works with professional locally licensed partners
  8. GDPR compliant
  9. NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
  10. NNRoad provides foreigner VISA application services, if needed

Employment Compliance in Indonesia

Taxes & Payroll in Indonesia

Employee Income Taxes:

Individual income tax rates in Indonesia are based on progressive tax brackets. Incomes at or bellow 5000 MYR per year are not taxed.

Tax Brackets

5.00%: 0 – 50M IDR

15.00%: 50M – 250M IDR

25.00%: 250M – 500M IDR

30.00%: >500M IDR

Sample Calculation

Yearly income = 700M IDR
30% * 200M = 60M
25% * 250M = 62.5M
15% * 200M = 30M
5% * 50M = 2.5M
60M+62.5M+30M+2.5M = 155M

Yearly income tax = 155M IDR

Employer Costs in Indonesia

Employer Contributions:

0.24% – 1.74% – Work Accident
3.7% – Old Age
.3% – Death
2% – Pension
4% – Health Insurance

Employee Contributions:

2% – Old Age
1% – Pension
1% – Health Insurance

Working Hours in Indonesia

Working Hours per Week

Full-time work is defined as 7 hours per day, 40 hours per week, and six days per week. Many employees though work eight hours per day for five days, and this can be agreed with employees.

Part-time work

Indonesian law does not recognize part-time work, and such employees would receive the same treatment and benefits as full-time employees.

Benefits & Insurance in Indonesia

Social Security

There are two main mandatory social security related to deductions in Indonesia:

  • Health-related social security, or BPJS Kesehatan. (BJPS stands for badan penyelenggara jaminan sosial) This gives employees, and their families, access to the state health system and hospital care.
  • Workers social security, or BPJS Ketenagakerjaan. This provides cover includes work accidents, old-age pension, and death cover.

The total contribution for heath related social security is 5% of the employee’s monthly salary. This is split between employer and employee.

The total employee contribution to workers’ social security is 3% of the employee’s monthly salary.

Termination Laws in Indonesia


Labor law in Indonesia does not define a notice period for employers to terminate a contract. In practice, though, many employers will offer a 30 day notice period to terminate a contract.

Severance pay must be given to dismissed employees.

There are two types of severance pay:

  • Standard severance pay – One month’s salary per year of service, up to 9 months in total.
  • Appreciation pay – 2 months salary for the first 3 years of employment, plus 1-month salary every three years after. Up to a maximum of 10 months salary.

Public Holidays in Indonesia

Public Holidays in Indonesia

  • New Year’s Day
  • Chinese New Year
  • “Nyepi” Bali Hindu New Year
  • Good Friday
  • Labor Day
  • Ascension Day of Jesus Christ
  • Ascension Day of the Prophet Muhammad
  • Buddhist Holy Day of Waisak
  • Ascension Day
  • Eid al-Fitr
  • Independence Day
  • Idul Adha
  • Islamic New Year
  • Birthday of the Prophet Muhammad
  • Christmas Day

Annual leave in Indonesia

Indonesian workers are entitled to a minimum of 12 days of paid annual leave per year after 1 year of employment. 

Unused vacation days expire  6 months after the date they were supposed to be taken. Employees and employers may agree upon compensation for unused vacation  days.

Employment Contract in Indonesia

Employment Contract

Employees can be hired either on one of two types of a contract under Labor Law. Both of these carry similar treatment and rights for employees.

  • Definite term employees 
  • Indefinite term employees

Contracts must be written in the Indonesian language using the Latin alphabet. They must include:

  • Employee details
  • Position, type of work, place of work, salary
  • Starting date and contract period.

Probation Period

There is no allowance under Indonesian Labor Law for a probationary period.

Types of Leaves in Indonesia

Sick Leave

Employees are entitled to paid sick leave at 100% of normal salary for up to 4 months provided they show a medical certificate. The sick leave salary pay percentage decreases after 4 months. If the employee is sick for longer than 12 months, the employer has the right to terminate the employment with severance payment. 

Maternity Leave

Maternity leave for mothers is 3 months, on full salary. This should be taken half before birth and half after birth.

Paternity Leave

Male employees are entitled to 2 days paid leave after birth or after a miscarriage.

Immigration Laws in Indonesia

Foreign workers can be granted a work visa in Indonesia. The employer and the employee need to provide the following documents.


  • Business license of the employer
  • Employer’s NPWP number for tax identification
  • Capital Registration License issued by the Indonesia Investment Coordinating Board (BKPM)
  • Scan of sponsor’s ID card (KTP)
  • Scan of a local employee’s ID card (KTP)
  • Wajib Lapor report
  • Employer company registration letter
  • Employer company stamp
  • A sheet of paper containing only the letterhead of the company
  • Employer certificate of domicile
  • Employer company’s deed of establishment, authorized by the Department of Justice
  • Certificates of approval for the employer’s place of business


  • Passport scan
  • Proof of health insurance
  • Passport photos in color
  • A copy of the employee’s highest degree of education that is stamped and signed by the employer
  • A copy of the applicant’s CV, which should also be stamped and signed by the employer
  • A work certificate (letter from one or several past employers) that shows the applicant has at least five years of relevant experience
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