Expatries Network
Indonesia

Employment contract and termination in Indonesia

In Indonesia, the drafting of the employment contract commits the payroll for its whole duration: the language used, the form adopted and the mandatory particulars are fixed by local law, not by the practice of head office.

Termination is the moment when drafting errors are paid for. Final settlement, notice, severance and exit documents obey local rules that the payroll manager applies every month: it is that person, and not the legal department at head office, who spots a poorly drawn contract. Having the model contract reviewed by the firm that will run the payroll costs little and avoids most disputes.

The annual religious holiday allowance is a statutory obligation with no European equivalent: it is owed, ahead of the religious festival corresponding to the employee's faith, to employees meeting the length-of-service condition set by regulation, which also fixes the payment deadline. It should be budgeted as a permanent element of payroll cost, not as a discretionary bonus.

The provincial minimum wage, revised annually, varies considerably between provinces: a company operating in Jakarta and in Surabaya applies two separate references.

Provider verification, finally, turns on a single document. The Indonesian tax certificate has a very short validity and is issued only on strict filing and payment conditions. It should be requested at the end of a due diligence process rather than at the start, otherwise it will have expired before signature.

The local framework in Indonesia

Working languages
Indonesian
Payroll currency
IDR
European status
Outside the European Union and the European Economic Area

Points to watch in Indonesia

Le système OSS a fait table rase des anciens documents : ne pas accepter un SIUP ou un TDP, périmés depuis 2018, mais exiger le NIB en cours. Le SKF est la pièce la plus contraignante du dossier indonésien avec sa validité d'un mois : caler sa demande sur la fin de l'instruction, pas sur son début. Enfin, l'affiliation aux deux BPJS est éclatée entre deux caisses indépendantes et une attestation d'affiliation ne dit rien des arriérés — demander en plus une preuve de paiement des trois derniers mois. Point non vérifié : je n'ai pas trouvé de source officielle fixant une durée de validité normalisée aux attestations BPJS, la valeur retenue ici relève de l'usage.

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