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Hiring Employees and Recruitment Requirements in Indonesia

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Need to Hire Employees in Indonesia? Don't know how? Learn here whether a PEO or Entity Setup Solution will best suit your Business hiring needs in Indonesia.

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Hiring Employees and Recruitment Requirements in Indonesia

  1. 1. Recruitment & Hiring Requirements in Indonesia
  2. 2. Key Considerations: Employment Below are some of the key considerations that should be taken into account before contracting staff in Indonesia: Max employer contribution 11.74 % Total cost of employment • Automatic pension enrolment • Health insurance social security • Work related injures and/or illnesses coverage • Special leave (maternity, death of a relative, marriage, etc.) Employee benefits Yes, 3 months maximun Is there an employee probation period? Yes, 12 days/year, + 14 public holidays Vacation Entitlement? Yes, 100% Legal benefits are garanted to employee? Yes, qualified expatriate Can expatriate staff be hired? Yes Do staff need a local employment contract?
  3. 3. Through a local legal entity Through a PEO solution: Professional Employer Organization Pathways to hiring staff
  4. 4. Advantages: • Greater control of your employees • Better knowledge of local market, laws and regulation • Viewed more positively than a PEO solution Disadvantages: • High set-up/ongoing costs • Administration involved in managing a local company • Accounting and tax obligations Forming a Legal Entity in Indonesia In the Indonesia, there are 3 main types of legal entities: Limited Liability Company (PT), Limited Liability Company owned by foreigners ( PMA) and LImited Partnership (CV)
  5. 5. Advantages: • You can operate without forming and maintaining a local entity • Limited legal responsibility • Cost-effective way to convert international contractors into employees Disadvantages: • The PEO becomes a co-employer • Loss of control • Costs involved with PEO services • Compromised company culture Professional Employer Organisation (PEO) Working with an international PEO is an option to employ staff abroad without having your own company.
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