The Cost of Hiring a Full-Time Employee in Indonesia

1. Introduction

Indonesia is Southeast Asia’s largest workforce market with competitive wage levels and a growing professional base. Employers must understand not only wage expectations but also the layered costs associated with contributions, benefits, and local compliance. This guide outlines the comprehensive cost of hiring a full-time employee in Indonesia.

2. Average Gross Monthly Salaries

Salary expectations in Indonesia vary by location and sector:

• General workers: IDR 3,000,000 – 5,000,000
• Mid-level professionals: IDR 6,000,000 – 12,000,000
• IT/Finance: IDR 10,000,000 – 25,000,000
• Senior executives: IDR 30,000,000 – 60,000,000

Minimum wages are set at the provincial level, ranging from IDR 2.1 to 4.9 million/month.

3. Statutory Contributions and Employer Taxes

Employers are required to contribute to multiple social security schemes:

• BPJS Ketenagakerjaan (Employment Social Security): ~5.74%
• BPJS Kesehatan (Health Security): 4%
• Other: Work accident insurance, old-age benefits

Total employer burden averages 10–11% of gross monthly wages.

4. Other Mandatory Costs

• Annual Leave: 12 days/year after one year of service
• Public Holidays: 15–16 days depending on the Islamic calendar
• Maternity/Paternity Leave:
  • Maternity: 3 months paid by employer
  • Paternity: 2 days paid leave
• Sick Leave: Paid leave depending on duration and medical certification

5. Optional & Market-Driven Benefits

Popular additions include:

• Health or hospitalization insurance
• Religious holiday bonus (THR), equal to 1 month’s salary
• Transportation or meal stipends
• Flexible working policies or hybrid support

6. Hidden & Overlooked Costs

• Probation period mismanagement
• Employee tax misclassification
• Leave and THR payout at termination
• Penalties for incorrect BPJS filings or delayed reporting

7. Advisory Notes for Employers

Ensure contracts are aligned with Indonesia’s Labor Law No. 13 and Omnibus Law provisions. Employers must be timely with BPJS registration and filings. HR policies must clearly outline entitlement and compliance processes.

8. How AYP Helps You Manage Cost Efficiently

AYP simplifies employment in Indonesia by managing payroll, benefits administration, and regulatory compliance. We ensure correct BPJS contributions and leave tracking so you stay compliant and efficient.

9. Contact Us

Hiring in Indonesia? Partner with AYP to simplify full-time employment costs and compliance.