--- title: "Indonesia" id: "11843" type: "global-payroll" slug: "indonesia" published_at: "2025-08-05T09:22:42+00:00" modified_at: "2026-10-06T12:18:15+00:00" url: "https://topsourceworldwide.com/global-payroll/indonesia/" markdown_url: "https://topsourceworldwide.com/global-payroll/indonesia.md" taxonomy_continent: - "Asia" --- # Payroll Services in Indonesia Fully managed Indonesian payroll: BPJS contributions within the 2026 caps, PPh 21 withheld on the TER tables, THR paid on time and monthly filings through Coretax, with a named specialist a phone call away. [Get in touch](https://topsourceworldwide.com/contact-us/) TopSource rated 5/5 by our customers - - - - - [Read reviews](#testimonials) ## What Indonesian payroll actually involves Indonesian payroll runs on five BPJS social security programmes, monthly income tax withholding (PPh 21) at effective rates set by government tables, a religious holiday allowance (THR) every year and minimum wages set by each province. Parliament passed a new Employment Protection Law on 6 October 2026. ### About 10.24% from the employer For an office role, employers pay 3.7% old-age savings, 2% pension, 0.24% accident insurance, 0.3% death insurance and 4% health insurance. Pension and health have monthly caps. ### A THR allowance every year Employees with 12 months of service receive one month’s pay as a religious holiday allowance (THR), no later than seven days before the holiday. Newer staff receive a proportional amount. ### PPh 21 at effective rates Income tax is withheld each month at an effective rate (TER) from government tables, and December reconciles the year on the progressive scale from 5% to 35%. ### Minimum wages set by province Each province sets its own minimum wage, from IDR 2,317,601 a month in West Java to IDR 5,729,876 in Jakarta for 2026. Cities and regencies can set higher rates. ### A new labour law in October 2026 Parliament passed an Employment Protection Law on 6 October 2026 that takes the labour rules out of the Job Creation Law and covers contracts, outsourcing, wages, dismissal and severance. ## Our Partners Globally ## Calculate Your Employee Costs in Indonesia Enter 12 months of gross salary, base pay plus fixed allowances, to see the employer cost of an Indonesian office employee in 2026: BPJS contributions for old-age savings, pension, work accident, death and health insurance within the pension and health caps, plus the THR religious holiday allowance of one month’s salary. ##### Employment Cost Calculator *Indicative figures only and not definitive legal advice. Local regulations change frequently. [Consult an expert](/contact-us/) ##### Indonesia Annually Monthly | | British Pound | Indonesia | | --- | --- | --- | | Base Salary (per month) | | | | Employer Contributions | | | | Total Cost (Annual) | | | | Total Cost (Monthly) | | | Employer of Record services in [Learn more](#) Payroll Outsourcing in [Learn more](#) ## Know your Indonesian hiring costs before you commit Tell us the role and the salary. We’ll send back the full Indonesian employer cost, BPJS contributions and THR included, within one business day. [Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/) > “Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.” Director of Research Operations, > “Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.” Chief Human Resources Officer, > “TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.” Senior Manager, Human Resources , ## Employer Costs in Indonesia Explained An Indonesian office employee costs about 10.24% on top of salary in BPJS contributions, plus the THR allowance of one month’s pay a year. Together that is 18.57% on top of 12 months’ salary for anyone earning up to IDR 11,086,300 a month. Above that the pension and health caps reduce the share: at IDR 30 million a month it is 14.91%. Here’s the breakdown. #### BPJS contributions and the 2026 caps Employers register every employee with both social security agencies. BPJS Ketenagakerjaan covers old-age savings (JHT: 3.7% from the employer, 2% from the employee), the pension programme (JP: 2% and 1%), work accident insurance (JKK: 0.24% to 1.74% by risk group, 0.24% for office work) and death insurance (JKM: 0.3%). BPJS Kesehatan covers health insurance at 4% from the employer and 1% from the employee. Contributions are calculated on base salary plus fixed allowances. The pension base is capped at IDR 11,086,300 a month from March 2026, up from IDR 10,547,400 in line with 2025 GDP growth, and the health base at IDR 12,000,000. Job loss insurance (JKP) costs the employer nothing extra: it is funded by the government and from the JKK contribution. Health contributions are due by the 10th of each month and BPJS Ketenagakerjaan contributions by the 15th of the following month, with a 2% fine for each month of delay. #### THR, working hours and overtime Every employee with at least one month of service is entitled to a religious holiday allowance (THR) once a year: one month’s wages after 12 months of service, or a proportional amount (months of service divided by 12) before that. It must be paid in full, not in instalments, no later than seven days before the employee’s religious holiday, which for most employees is Eid al-Fitr. THR is taxable income but carries no BPJS contributions. The standard working week is 40 hours: seven hours a day over six days or eight hours over five. Overtime is limited to four hours a day and 18 hours a week and is paid on an hourly rate of 1/173 of monthly wages: 1.5 times for the first hour on a working day and twice for each hour after that. #### Income tax withholding (PPh 21) Employers withhold PPh 21 each month by applying an effective rate (TER) from government tables to gross monthly income. The table depends on the employee’s marital status and number of dependants, which also set the annual non-taxable allowance: IDR 54 million for a single taxpayer, plus IDR 4.5 million for a spouse and for each dependant, up to three. In December, or when employment ends, the employer recalculates the tax for the year on the progressive scale from 5% to 35% and withholds the difference. Withheld tax is paid by the 15th of the following month and reported by the 20th through the Coretax system, where the employee’s national identity number (NIK) serves as the tax number. In 2026 the government covers the PPh 21 of employees earning up to IDR 10 million a month in footwear, textiles and clothing, furniture, leather goods and tourism, and employers pass the amount to the employee in cash. #### What an Indonesian employee actually costs For an office employee on IDR 10,000,000 a month, the employer pays IDR 1,024,000 a month in BPJS contributions. With the THR, the annual cost is IDR 142,288,000, 18.57% on top of 12 months’ salary. At IDR 15,000,000 a month the pension and health caps apply, monthly contributions are IDR 1,337,726 and the employer cost falls to 17.25%. At IDR 30,000,000 it is 14.91%. Minimum wages are set every year by each province, and many cities and regencies set a higher local rate. For 2026 the provincial minimum ranges from IDR 2,317,601 in West Java to IDR 5,729,876 in Jakarta, which rose 6.17% under the formula in Government Regulation 49 of 2025. Salaries paid in Indonesia must be paid in rupiah. #### Leave, termination and the new Employment Protection Law Employees are entitled to 12 working days of paid annual leave after 12 months of continuous service. Maternity leave is at least three months and can be extended by up to three more with a medical certificate; pay is full for the first four months and 75% for the fifth and sixth. Permanent contracts can include a probation period of up to three months, and severance on dismissal depends on length of service and the reason for the termination. On 6 October 2026 Parliament passed the Employment Protection Law (UU Pelindungan Ketenagakerjaan), 313 articles that take the labour rules out of the 2023 Job Creation Law, as the Constitutional Court ordered in 2024. It covers fixed-term contracts, outsourcing, wages, dismissal and severance, and takes effect once it is signed and promulgated; we will update this page as its rules and implementing regulations are published. Separately, the Constitutional Court ruled in September 2025 that Tapera housing savings can no longer be compulsory for private-sector employees. ## Indonesian employer contributions and payroll costs, 2026 | Contribution | Employer | Employee | Applies to | | --- | --- | --- | --- | | Old-age savings (JHT) | 3.7% | 2% | Base salary plus fixed allowances | | Pension (JP) | 2% | 1% | Earnings up to IDR 11,086,300 a month from March 2026 | | Work accident insurance (JKK) | 0.24% to 1.74% | — | By risk group; 0.24% for office work | | Death insurance (JKM) | 0.3% | — | Base salary plus fixed allowances | | Health insurance (BPJS Kesehatan) | 4% | 1% | Earnings up to IDR 12,000,000 a month | | Religious holiday allowance (THR) | One month’s wages | — | Once a year after 12 months; proportional before | | Income tax (PPh 21) | — | 5% to 35% | Withheld monthly at effective rates (TER) | ### Indonesian income tax rates for individuals, 2026 | Annual taxable income | Rate | | --- | --- | | Up to IDR 60 million | 5% | | IDR 60 million to 250 million | 15% | | IDR 250 million to 500 million | 25% | | IDR 500 million to 5 billion | 30% | | Above IDR 5 billion | 35% | ### Employer cost of monthly salaries in Indonesia, 2026 | Monthly salary | Employer BPJS per month | THR | Annual cost | On top of salary | | --- | --- | --- | --- | --- | | IDR 10,000,000 | IDR 1,024,000 | IDR 10,000,000 | IDR 142,288,000 | 18.57% | | IDR 15,000,000 | IDR 1,337,726 | IDR 15,000,000 | IDR 211,052,712 | 17.25% | | IDR 30,000,000 | IDR 1,973,726 | IDR 30,000,000 | IDR 413,684,712 | 14.91% | Taxable income is income after the non-taxable allowance of IDR 54 million for a single taxpayer, plus IDR 4.5 million for a spouse and for each dependant, up to three. The cost table is for an office role in the lowest work accident risk group (0.24%) and uses the pension cap that applies from March 2026; annual cost is 12 months’ salary plus BPJS contributions and the THR. Job loss insurance (JKP) adds nothing for the employer. These are TopSource calculations from the verified 2026 rates. Rates, caps and amounts shown are for 2026 and were verified on 6 October 2026 against BPJS Ketenagakerjaan and BPJS Kesehatan rules, the 2026 pension wage cap, Government Regulations 58 of 2023 and 49 of 2025, the 2026 THR circular, provincial minimum wage decisions and published tax sources. This page is general information, not tax or legal advice. [Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/) ## How our Indonesian payroll service works 1. Map your setup We confirm your company’s registrations with BPJS Ketenagakerjaan, BPJS Kesehatan and the tax office, the JKK risk group for each role, your wage structure and any company regulation or collective agreement that sets pay and leave. 2. Migrate or onboard New hires are registered with both BPJS agencies and set up with their NIK and tax status. Year-to-date pay, tax withheld and leave balances are carried across so the December reconciliation comes out right. 3. Run and review Each period you receive a payroll report for approval before anything is paid: gross to net per employee, BPJS contributions and PPh 21 withheld, with THR months and variances explained. Nothing is paid until you approve it. 4. File and pay We pay BPJS contributions by their deadlines, pay and report PPh 21 through Coretax each month and issue the annual withholding slips your employees need for their tax returns, whether your team sits in Jakarta or across the archipelago. 5. Stay current Minimum wages change every January, the pension cap every March and a new Employment Protection Law passed in October 2026. We apply each change as it takes effect and re-verify the figures on this page. ## Why Choose TopSource for Payroll Outsourcing in Indonesia TopSource for payroll, Employer of Record or any other of our services represents a simpler, more reliable and transparent option. We don’t hide fees or sneak price increases. We run Indonesian payroll in-house and file under your own BPJS and tax registrations rather than a bureau’s, so the same team that files your monthly PPh 21 returns answers your calls. You get a named account manager, one consolidated monthly invoice covering salaries, contributions, taxes and fees, and one live Portico view of Indonesia beside every other country we run for you. Portico syncs with your time-tracking, leave and HR systems via API – set up by our onboarding team, not left to yours. GDPR, SOC 2 and ISO 27001 certified. [Global Payroll](https://topsourceworldwide.com/global-payroll/) [Get Started](https://topsourceworldwide.com/contact-us/) ## Other services Accelerating your growth in Indonesia and beyond #### TopSource goes far beyond payroll, acting as your end-to-end partner in global workforce management. From Employer of Record (EOR) services and seamless entity setup to localized accountancy and fractional HR support, we cover every aspect of international employment. ### Global Employer of Record (EOR) services With our Global EOR services, you can hire talent in any country without establishing a legal entity. We handle employment contracts, payroll, benefits, and compliance on your behalf, enabling fast, risk-free global expansion. ### Actionable HR Advisory On demand access to our fractional and regional HR professionals who understand local laws, cultures, and best practices. Bespoke talent intelligence including salary, business and talent market benchmarking. ### Global entity management Our global entity management team helps you establish and maintain your corporate entities worldwide. We ensure full compliance with local laws and regulations, streamline administrative processes, and minimize risk — so you can focus on growing your business. ### Accounting We offer comprehensive accounting solutions tailored to meet your international needs. From bookkeeping and financial reporting to tax filings and audits, our services help you maintain transparency, accuracy, and compliance in every jurisdiction. ## Meet our experts for Indonesia Whether you’re entering the market or scaling operations, our specialists provide the insight and guidance you need to succeed in one of the world’s most dynamic and regulated employment landscapes. With TopSource, you’re backed by real experts, every step of the way. [Our People](https://topsourceworldwide.com/our-people/) ## Beyond a payroll service **A globalization accelerator** A payroll platform for your employees is just the beginning. We are constantly evaluating your entire organisation to identify compliance issues and ways to accelerate your global growth. - [Payroll platform](#) - [Audit](#) - [Intelligence](#) - [Advisory](#) ##### Payroll platform ###### Global payroll simplified Your intuitive hub for paying global teams. Simple, powerful, and designed to scale with you — no complexity, just clarity. ##### Audit ###### Eliminate barriers to growth Avoid compliance issues across your global workforce and uncover opportunities to improve profitability. On a quarterly basis we’ll help you audit your global talent strategy to ensure it aligns with your business goals. ##### Intelligence ###### Build a data-driven talent strategy Grow confidently and profitably with access to the latest TopSource insights & data on hiring markets, salary benchmarking & benefits. ##### Advisory ###### Expert guidance that turns complexity into clarity. Whether you’re managing a global acquisition or entering a new market, you get clear guidance to navigate complex decisions, avoid delays, and accelerate your global expansion. ## Indonesian payroll FAQs ### What are employer payroll contributions in Indonesia in 2026? For an office role, employers pay about 10.24% of base salary plus fixed allowances: 3.7% old-age savings, 2% pension, 0.24% work accident insurance, 0.3% death insurance and 4% health insurance. The pension base is capped at IDR 11,086,300 a month from March 2026 and the health base at IDR 12,000,000. ### How much does it cost to employ someone in Indonesia? BPJS contributions and the THR allowance add 18.57% to 12 months’ salary for an office employee earning up to IDR 11,086,300 a month. At IDR 30 million a month the caps bring it down to 14.91%. Tell us the role and salary and we’ll send the full cost within one business day. ### How is income tax withheld from salaries in Indonesia? Employers withhold PPh 21 each month at an effective rate (TER) set by government tables for the employee’s tax status. In December the tax for the year is recalculated on the progressive scale from 5% to 35%, after the non-taxable allowance of IDR 54 million for a single taxpayer, and the difference is withheld. ### What is THR and when must it be paid? THR is the religious holiday allowance: one month’s wages for employees with 12 months of service, or a proportional amount for those with at least one month. It must be paid in full no later than seven days before the employee’s religious holiday, usually Eid al-Fitr. ### What is the minimum wage in Indonesia in 2026? Each province sets its own: IDR 5,729,876 a month in Jakarta, the highest, and IDR 2,317,601 in West Java, the lowest. Many cities and regencies set a higher local minimum, which then applies. ### When are payroll taxes and contributions due in Indonesia? BPJS Kesehatan contributions are due by the 10th of each month and BPJS Ketenagakerjaan contributions by the 15th of the following month. PPh 21 withheld from salaries is paid by the 15th of the following month and reported by the 20th through Coretax. ### Do employers have to pay Tapera in Indonesia? Not at present. In September 2025 the Constitutional Court ruled the compulsory Tapera housing savings scheme unconstitutional, so private-sector employees and their employers no longer have to contribute. Lawmakers have two years to rework the law. ### What is changing in Indonesian labour law in 2026? Parliament passed a new Employment Protection Law on 6 October 2026 that takes the labour rules out of the 2023 Job Creation Law, as the Constitutional Court ordered. It covers fixed-term contracts, outsourcing, wages, dismissal and severance and applies once signed and promulgated; we apply its rules as they take effect. ### How much annual and maternity leave do employees get in Indonesia? Employees get 12 working days of paid annual leave after 12 months of continuous service. Maternity leave is at least three months and can be extended by three more with a medical certificate, on full pay for four months and 75% pay for the fifth and sixth. ### Can a foreign company run payroll in Indonesia without an entity? Registering employees with BPJS and the tax office requires a local entity, usually a foreign-owned company (PT PMA). Without one, the usual route is an Employer of Record. TopSource can run payroll for your Indonesian entity or employ your team through our Employer of Record service. [Couldn’t find what you were looking for?](/contact-us/) ## Looking at other markets too? We help organizations employ and pay teams in 164 countries. 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Tögrög](https://topsourceworldwide.com/global-payroll/mongolia/) [Montenegro Capital: Podgorica Currency: Euro](https://topsourceworldwide.com/global-payroll/montenegro/) [Morocco Capital: Rabat Currency: Moroccan Dirham](https://topsourceworldwide.com/global-payroll/morocco/) [Mozambique Capital: Maputo Currency: Mozambique metical](https://topsourceworldwide.com/global-payroll/mozambique/) [Namibia Capital: Windhoek Currency: Namibian Dollar](https://topsourceworldwide.com/global-payroll/namibia/) [Nepal Capital: Kathmandu Currency: Rupee](https://topsourceworldwide.com/global-payroll/nepal/) [New Zealand Capital: Wellington Currency: New Zealand Dollar](https://topsourceworldwide.com/global-payroll/new-zealand/) [Nicaragua Capital: Managua Currency: Nicaraguan córdoba](https://topsourceworldwide.com/global-payroll/nicaragua/) [Nigeria Capital: Abuja Currency: Nigerian Naira](https://topsourceworldwide.com/global-payroll/nigeria/) [Norway Capital: Oslo Currency: Norwegian krone](https://topsourceworldwide.com/global-payroll/norway/) [Oman Capital: Muscat Currency: Rial](https://topsourceworldwide.com/global-payroll/oman/) [Pakistan Capital: Islamabad Currency: Pakistani Rupee](https://topsourceworldwide.com/global-payroll/pakistan/) [Panama Capital: Panama City Currency: Balboa (PAB) and United States dollar (USD)](https://topsourceworldwide.com/global-payroll/panama/) [Papua New Guinea Capital: Port Moresby Currency: Papua New Guinean Kina](https://topsourceworldwide.com/global-payroll/papua-new-guinea/) [Paraguay Capital: Asunción Currency: Paraguayan guaraní](https://topsourceworldwide.com/global-payroll/paraguay/) [Peru Capital: Lima Currency: Peruvian sol](https://topsourceworldwide.com/global-payroll/peru/) [Philippines Capital: Manila Currency: Peso](https://topsourceworldwide.com/global-payroll/philippines/) [Portugal Capital: Lisbon Currency: Euro](https://topsourceworldwide.com/global-payroll/portugal/) [Puerto Rico Capital: San Juan Currency: United States dollar](https://topsourceworldwide.com/global-payroll/puerto-rico/) [Qatar Capital: Doha Currency: Riyal](https://topsourceworldwide.com/global-payroll/qatar/) [Romania Capital: Bucharest Currency: Romanian Leu](https://topsourceworldwide.com/global-payroll/romania/) [Rwanda Capital: Kigali Currency: Rwandan franc](https://topsourceworldwide.com/global-payroll/rwanda/) [Saint Kitts & Nevis Capital: Basseterre Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-kitts-nevis/) [Saint Lucia Capital: Castries Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-lucia/) [Saint Maarten Capital: Philipsburg Currency: Caribbean guilder (Cg)](https://topsourceworldwide.com/global-payroll/st-maarten/) [Saint Vincent & the Grenadines Capital: Kingstown Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-vincent-the-grenadines/) [Saipan Capital: Capitol Hill Currency: U.S. Dollar](https://topsourceworldwide.com/global-payroll/saipan/) [San Marino Capital: City of San Marino Currency: Euro](https://topsourceworldwide.com/global-payroll/san-marino/) [Saudi Arabia Capital: Riyadh Currency: Riyal](https://topsourceworldwide.com/global-payroll/saudi-arabia/) [Senegal Capital: Dakar Currency: West African CFA franc](https://topsourceworldwide.com/global-payroll/senegal/) [Serbia Capital: Belgrade Currency: Serbian dinar](https://topsourceworldwide.com/global-payroll/serbia/) [Seychelles Capital: Victoria Currency: Seychellois Rupee](https://topsourceworldwide.com/global-payroll/seychelles/) [Slovakia Capital: Bratislava Currency: Euro](https://topsourceworldwide.com/global-payroll/slovakia/) [Slovenia Capital: Ljubljana Currency: Euro](https://topsourceworldwide.com/global-payroll/slovenia/) [Solomon Island Capital: Honiara Currency: Solomon Islands Dollar](https://topsourceworldwide.com/global-payroll/solomon-island/) [South Korea Capital: Seoul Currency: Won](https://topsourceworldwide.com/global-payroll/south-korea/) [South Sudan Capital: Juba Currency: South Sudanese Pound](https://topsourceworldwide.com/global-payroll/south-sudan/) [Sri Lanka Capital: Colombo Currency: Sri Lankan Rupee](https://topsourceworldwide.com/global-payroll/sri-lanka/) [Sudan Capital: Khartoum Currency: Sudanese Pound](https://topsourceworldwide.com/global-payroll/sudan/) [Sweden Capital: Stockholm Currency: Swedish krona](https://topsourceworldwide.com/global-payroll/sweden/) [Taiwan Capital: Taipei Currency: Dollar](https://topsourceworldwide.com/global-payroll/taiwan/) [Thailand Capital: Bangkok Currency: Thai Baht](https://topsourceworldwide.com/global-payroll/thailand/) [Trinidad & Tobago Capital: Port of Spain Currency: Trinidad and Tobago dollar](https://topsourceworldwide.com/global-payroll/trinidad-tobago/) [Tunisia Capital: Tunis Currency: Tunisian Dinar](https://topsourceworldwide.com/global-payroll/tunisia/) [Uganda Capital: Kampala Currency: Ugandan Shilling](https://topsourceworldwide.com/global-payroll/uganda/) [US Virgin Island Capital: Charlotte Amalie Currency: Dollar](https://topsourceworldwide.com/global-payroll/us-virgin-island/) [Venezuela Capital: Caracas Currency: Venezuelan bolívar](https://topsourceworldwide.com/global-payroll/venezuela/) [Zambia Capital: Lusaka Currency: Zambian Kwacha](https://topsourceworldwide.com/global-payroll/zambia/) [Zimbabwe Capital: Harare Currency: Zimbabwe Gold (ZiG)](https://topsourceworldwide.com/global-payroll/zimbabwe/) Load more