Work conditions in Indonesia

The Active Population in Figures

Working Conditions

Legal Weekly Duration

The legal duration of work is 7 hours a day and 40 hours a week for 6 working days in a week, or 8 hours a day and 40 hours a week for 5 working days in a week.

Retirement Age

55

Working Contracts

The work contract is essentially governed by the law and to a lesser extent by individual negotiation and collective agreements. Hiring conditions are strict and the formality of the work contract is rather rigid.

There are two types of contracts: fixed term and open-ended.

Labour Laws

Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

Cost of Labour

Minimum Wage

The minimum wage fluctuates a lot depending on provinces. In January 2022, the highest minimum wage was for Jakarta, at 4,641,854 rupiah per month (USD 322.10), an increase of 5.1% from 2021. The lowest minimum wage was for Central Java, at 1,812,935 rupiah per month, an increase of 0.78% from 2021.

Average Wage

The average salary in the country is around 12,100,000 IDR per month (USD 862) (Salary Explorer, 2022).

Social Contributions

Social Security Contributions Paid By Employers: 0.24%-1.74% for work accident protection; 0.3% for death insurance; 3.7% for old age savings; 2% for pension; 4% for healthcare. The monthly income cap for pension contribution is updated annually. Since 1 January 2020, maximum salary cap for health insurance is IDR12,000,000.
Social Security Contributions Paid By Employees: 2% of gross monthly earnings for old age insurance; 1% of gross monthly earnings for health insurance; 1% for pension. As of 1 January 2020, maximum salary cap for health insurance is IDR 12,000,000. The monthly income cap for pension contribution is updated annually.

Social Partners

Employer Associations

APINDO - Employers' Association of Indonesia
KADIN - BSD - Indonesian Chamber of Commerce and Industry

Labour Unions

National Front for the Indonesian workers' struggle (FNPBI)

Unionisation Rate

Less than 4% of the active population (formal and informal sectors) and 14% of the active population (formal sector).

Labour Regulation Bodies

National Portal of Indonesia with information about work market and regulations