Indonesia Payroll Services

At Bradford Jacobs, we navigate the administration of the Indonesian payroll system for you. We do the work, so you do not have to.

Indonesian Payroll

Operating payroll in the Republic of Indonesia is a major commitment for international companies moving into Southeast Asia’s No.1 economy and the 16th strongest in the world that is predicted to climb into the top 10. Indonesia’s growth as an economic force comes despite comprising over 17,000 islands spread across 3,000 miles from east to west and 1,000 miles north to south.

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Natural resources including gold, silver, copper, tin, palm oil, natural gas and oil underpin Indonesia’s economy. It also holds the world’s largest reserves of nickel, which will make Indonesia a key player in producing batteries for electric vehicles. The government’s drive towards industrialisation and diversification runs alongside an emphasis on e-commerce and making Indonesia the region’s digital hub.

Indonesia’s potential nevertheless requires expert knowledge to unravel the red tape that jeopardises implementing your business plan swiftly and successfully… this is why you need Bradford Jacobs alongside. We have total understanding of all the issues surrounding Indonesia’s payroll regulations, contracts, taxes, labour laws and every aspect of employment compliance.

Bradford Jacobs’ Professional Employer Organisation (PEO) and Employer of Record (EOR) platforms and networks provide complete answers to every question your company will encounter before you move into the economy, especially when it comes to operating payroll.

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Available Indonesian Payroll Options

  • Remote payroll – This option allows businesses to operate under a single payroll system, by adding employees in Indonesia to your parent company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.
  • Internal payroll – You may operate payroll for your subsidiary, especially if you are committed to growing your company’s presence in Indonesia. However, this does require hiring dedicated HR staff who understand Indonesian employment and compliance laws.
  • Indonesias’ payroll processing company – If you are considering outsourcing, then working with a Indonesian payroll company will help in processing your payroll – but not when it comes to compliance.
  • Indonesias’ payroll outsourcing – However, there is another option available that solves both concerns – by working with Bradford Jacobs. We can handle payroll and compliance for all your employees in Indonesia. We take the administrative stress off your shoulders so you can focus on what you do best.

Foreign companies intending to operate in Indonesia need to establish a subsidiary to legally recruit staff in the country and run payroll for their employees. The typical choice is to establish a limited liability company, as these generally protect the parent company and its shareholders from financial or legal liability. Once the company is incorporated, employers must onboard their new staff and be ready to stay in line with every aspect of the Employment Law, also referred to as the Labour Law or Manpower Law.

Procedures for onboarding employees onto the company payroll in Indonesia include:

  • Obtain or verify the employee’s Tax Identification Number. The Nomor Pokok Wajib Paak (NPWP) is a 16-digit number for individuals (and entities). Since July 2022, Indonesian residents use their national identity number (NIK) as their tax ID
  • Register with the relevant Tax Office (Jawatan Pajak, JP) of the Directorate General of Taxes (Direktorat Jenderal Pajak, DJP)
  • All employees, including expats, working for at least six months must contribute to the National Social Security System (Sistem Jaminan Sosial Nasional, SJSN) to make contributions from payroll
  • Register employees for the healthcare programme, Kesehatan BPJS, via the BPJS Ketenagakerjaan website, and for social security with the Jaminan Sosial Tenaga Kerja, Jamsostek
  • Hold copies of all pages of the passport; photocopy of the work permit, if applicable; copy of Certificate of Domicile for employee and employer

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