Hiring in Indonesia means taking on a set of statutory obligations that go well beyond a salary figure. Indonesian labor law is detailed and employer-facing, with mandatory leave entitlements, social security contributions, and a religious holiday bonus that apply to every employee. If you’re building a team in Indonesia, you need to know what’s required before you make your first hire.
Annual leave
Employees in Indonesia are entitled to 12 working days of paid annual leave per year, but only after completing 12 consecutive months of service. Leave must be taken within 6 months of the entitlement arising; any unused days after that window may be forfeited under Indonesian law.
There’s also an extended service leave provision for long-tenured staff. After 6 years of continuous employment with the same company, an employee receives one additional month of leave, spread across years 7 and 8 as half a month in each year. This is worth building into your workforce planning if you’re hiring for the long term.
Public holidays
Indonesia observes 15 national public holidays per year. These are paid days off for all employees, and they’re separate from annual leave entitlements. The exact dates shift annually because several holidays follow the Islamic or other religious calendars, so it’s worth reviewing the official government list each year.
Sick leave
Indonesian law ties paid sick leave entitlements to length of service, which means longer-tenured employees are entitled to more days.
Standard sick leave
- Less than 2 years of service: 14 days per year
- 2 to 5 years of service: 18 days per year
- 5 or more years of service: 22 days per year
Hospitalization leave
In addition to standard sick leave, employees are entitled to up to 60 days per year of hospitalization leave. This is separate from the regular sick leave allowance and covers periods where an employee requires inpatient care. Both are paid entitlements under Indonesian law.
Maternity leave
Indonesia provides 3 months of paid maternity leave at full pay, structured as 1.5 months before the expected birth date and 1.5 months after. With medical authorization, this can be extended to 6 months in total. Employers should factor full-pay obligations into their planning for extended leave periods.
In the case of miscarriage, employees are entitled to 1.5 months of paid leave. This entitlement is statutory and can’t be waived in an employment contract.
Paternity leave
Private sector employees are entitled to 2 to 3 days of paid paternity leave. This entitlement is grounded in Law No. 13 of 2003 (the Manpower Law), as updated by Law No. 4 of 2024 on Maternal and Child Welfare. While the duration is short compared to maternity leave, it’s a statutory right and must be granted when requested.
Other statutory leave
Beyond the main leave categories, Indonesian law mandates paid leave for several life events. These entitlements are modest in duration but are legally required.
- Bereavement for a close family member: 2 days
- Employee’s own marriage: 2 days
- Child’s religious ceremony (circumcision or baptism): 2 days
- Menstruation leave: 2 days per cycle, covering the first and second day
These categories are fixed in law and can’t be offset against annual leave or treated as discretionary. Build them into your HR policies from day one.
Thr: the religious holiday allowance
THR (Tunjangan Hari Raya) is a mandatory bonus paid to all Indonesian employees before their major religious holiday. For the majority of employees, this is Eid al-Fitr, but THR applies to employees of all faiths and is paid before their respective holiday.
The amount is one full month’s salary for employees with 12 or more months of service. For employees with less than a year of service, it’s pro-rated based on the number of months worked. THR must be paid before the holiday, not after. Delays or non-payment expose employers to penalties, so treating THR as a fixed payroll obligation rather than a discretionary bonus is essential.
Bpjs: health and social security as employer obligations
BPJS is Indonesia’s national social security system, and enrollment is mandatory for all employees. There are two separate schemes, each with distinct contribution structures and benefit types.
Bpjs kesehatan (national health insurance)
Employers contribute 4% of salary to BPJS Kesehatan; employees contribute 1%. Contributions are capped at a monthly salary of IDR 12,000,000. Coverage extends to the employee’s spouse and up to three children under the age of 21. Enrollment and contributions are non-negotiable for employers operating in Indonesia.
Bpjs ketenagakerjaan (employment social security)
This scheme covers four distinct benefit categories:
- JHT (Old Age Security): a lump-sum payment made to employees on retirement, resignation, or permanent disability
- JP (Pension): a monthly pension benefit, with 2026 figures set at a minimum of IDR 411,400 per month and a maximum of IDR 4,932,300 per month
- JKK (Work Accident Insurance): covers workplace injuries and occupational illness
- JKM (Death Insurance): provides a benefit to an employee’s beneficiaries in the event of death
Both BPJS schemes require timely enrollment and monthly contribution remittances. Failing to enroll employees or falling behind on contributions creates legal liability for the employer.
Managing indonesian leave and benefits through an Employer of Record
For companies hiring in Indonesia without a local legal entity, an Employer of Record (EOR) takes on the legal employer role and handles all statutory compliance on your behalf. That covers leave tracking, BPJS enrollment and contributions, THR calculation and payment, and ensuring your employment contracts meet Indonesian law.
If you’re not familiar with how this model works, this overview of what an Employer of Record is covers the key mechanics. For companies comparing providers, this guide to the best EOR services outlines what to look for when you’re evaluating your options.
Book a demo to see how RemotePass manages leave and benefits compliance in Indonesia.
Frequently asked questions
When does an employee become eligible for annual leave in indonesia?
Annual leave entitlement kicks in after 12 consecutive months of service with the same employer. Before that point, employees don’t have a statutory right to paid annual leave, though employers can choose to offer it earlier as a contractual benefit.
Is thr the same as a performance bonus?
No. THR is a statutory entitlement, not a discretionary payment. Every employee who has worked for at least one month is entitled to a pro-rated THR, and any employee with 12 or more months of service receives a full month’s salary. It’s a payroll obligation with a legal deadline, not a reward tied to performance.
Can an employer deduct bpjs contributions from an employee’s gross salary?
The employee’s share of BPJS Kesehatan (1%) is deducted from the employee’s salary. The employer’s contribution (4%) is an additional cost on top of salary. For BPJS Ketenagakerjaan, both employer and employee portions apply, with the split depending on the specific program. Employers are responsible for remitting both portions to the relevant BPJS agency each month.
What happens if an employer doesn’t pay thr on time?
Late THR payment carries financial penalties under Indonesian law. The government has the authority to impose fines on employers who miss the payment deadline, and employees can report non-compliance to the Ministry of Manpower. Given that the deadline is fixed relative to the religious holiday date, it’s essential to plan payroll well in advance, particularly for Eid al-Fitr when the holiday date can shift each year.
