Business
Indonesia — Business: Payroll
Indonesian payroll includes employer BPJS contributions of 3.7% JHT and 2% pension plus risk-based accident cover and 0.3% death cover.
VerifiedGovernment / official sourceBPJS Ketenagakerjaan — employer payroll contributionsLast reviewed: 2026-10-23
Why this matters
Understanding payroll regulations is crucial for businesses operating in Indonesia to avoid penalties and ensure compliance with labor laws.
Key facts
- Employers pay 3.7% JHT and 2% JP, plus JKK (0.24% to 1.74% by risk tier) and JKM 0.3%; employees pay 2% JHT and 1% JP.
- Employers must register themselves and their workers with BPJS, and foreign staff working six months or more are covered.
- Final withholding on certain payments is under Article 4(2) income tax; see the Directorate General of Taxes.
- JKP was revised under PP 6/2025.
Steps
- Step 1: Register with the Ministry of Manpower — Foreign-owned businesses must register with the Ministry of Manpower and obtain a business license, which can take several weeks to process.
- Step 2: Obtain a Taxpayer Identification Number (NPWP) — Employers must obtain an NPWP, which is used to pay taxes and social security contributions.
- Step 3: Comply with Payroll Tax Regulations — Employers must comply with payroll tax regulations, including deducting income tax, VAT, and social security contributions from employee salaries.