Comprehensive Guide To Employee Benefits In Indonesia

Navigating employee benefits in Indonesia can be complex, with a mix of mandatory statutory benefits and additional voluntary perks offered by employers. 

In this guide, Aniday breaks down everything you need to know about the key employee benefits, including mandatory and voluntary benefits to attract and retain top talent. 

Whether you're an employer looking to enhance your offerings or an employee seeking to understand your entitlements, this guide will help you navigate the landscape of employee benefits in Indonesia.

What Are Employee Benefits?

Employee benefits are non-wage compensation given in addition to employees' basic salaries. They can vary between monetary rewards, life insurance, health insurance, leaves, etc.

No government regulations in Indonesia have made employee benefits compulsory for private-sector employees. Hence, for private-sector employees, it is provided by the company based on its policies.

The overall aim of providing employee benefits is to enhance employee satisfaction.

Who Is Entitled To Employee Benefits In Indonesia?

According to the Indonesian Labour Law Act 13 in 2003, some groups of employees are eligible to receive employee benefits. Here are they:

• Full-time employees
• Part-time employees
• Contract and permanent employees
• Employees in specific roles or functions

What Are The Employee Workplace Benefits In Indonesia?

In Indonesia, employee benefits come in two main types: statutory and voluntary, and they can be either monetary or non-monetary. Aniday has gathered a range of both statutory and voluntary benefits for you to explore and consider.

Let's discuss these benefits in detail.

What Are Statutory Employee Benefits In Indonesia?

1. Minimum Wage

In Indonesia, the minimum wage differs between provinces and is annually evaluated. However, in 2023, the monthly minimum wage in Jakarta was IDR 4,901,798.

Even though every role should meet the minimum wage, the wage needs to be customized to meet industry standards based on the role, responsibilities, and experience.

You can explore minimum wage and average salary in Indonesia more here!

2. Overtime Pay

In Indonesia, overtime pay differs based on the agreement or the employee contract. In general, employees are expected to work 40 hours a week for five days of 8-hour shifts or six days of 7-hour shifts.

Any work performed, excluding these regular work hours, is overtime work. If the employee is hired on a weekday, the overtime pay is 150% of the base rate (only for the first hour) and increases by 200% for the following overtime duration. Also, the rate varies if overtime work is performed during rest and public holidays.

3. Leave And Holiday Entitlements

Leave and holiday entitlements also vary based on the type of holiday and terms. Here's a quick breakdown of leave and holiday entitlements in Indonesia:

• If an employee has surpassed one year of tenure, he/she can obtain 12 paid leave days per year. The entitlements vary depending on the tenure period.
• Leave days are entitled to public holidays, while Indonesia has 16 public holidays per year.
• Paid sick leave is offered, but the payment varies based on the sickness. For example, if an employee has long-term sickness and can obtain 100% of their pay in the first four months, it may decrease by 25% for every quarter until the termination period.

4. Work Accident Insurance

Work accident insurance is mandatory for every employee working in Indonesia. The employer completely pays the contribution, which may range between 0.24% and 1.74% of the employee's salary.

5. Maternity And Paternity Leave

Employees are paid 100% of their base salary for maternity leaves. They can obtain three months of maternity leave before their due date and one and a half months of paid leave after giving birth.

Paid paternity leaves are given for two days, whether it is a birth or a miscarriage.

The employee is given two days of additional parental leave under several circumstances. They are listed below:

• Due to an employee's child circumcision
• Due to the employee's child's baptism
• Due to the employee's child marriage
• Due to an employee's child's death

6. Pension And Retirement Contributions

As an Indonesian employee, you must contribute to old age and pension. Employees and employers make these contributions. Here's a breakdown of it:

• The employee contributes 2% of salary to old age and 1% to pension.
• The employer contributes 3.7% to old age and 2% to pension.

Old age and pension contributions are mandatory in Indonesia.

7. Health Benefit

In Indonesia, citizens' employees can effectively access the BPJS Kesehatan government program (Penyelenggara Jaminan Sosial Kesehatan).

BPJS Kesehatan is an affordable healthcare option that covers the employee's medical expenses, those of their immediate family and secures their health funds.

Here's how the insurance contributions are aligned: For health insurance, the contribution is given by the employer and employee. The employee will contribute 1% of the employee's salary, and the employer will contribute 4%.

What Are The Voluntary Employee Benefits?

Beyond the mandatory employee benefits, adding voluntary perks can make your benefits package more attractive. At Aniday, we recommend including these extras to help attract top talent and retain your best employees. Here are some key voluntary benefits that companies often offer:

• Flexible work hours: Flexible work hours allow employees to do their work from anywhere and anytime.
• Learning and development stipends: These stipends encourage employees to take new courses, receive coaching, and enhance their skills. They will also contribute to skill development and the company.
• Performance-based bonus: Performance-based bonus motivates employees to achieve more achievements and accomplish goals.
• Stipend for work-from-home employees: Employers can offer a stipend for remote employees to purchase essential supplies to enhance their productivity.
• Transportation benefit: For onsite workers, employers can cover their transportation costs or provide vehicle subsidies.
• Meal benefit: Employers can offer meal benefits to both onsite and remote employees. For remote workers, especially those with irregular shifts or extended hours, this can be a valuable perk. Onsite employees can also benefit by having the option to bring meals from home or enjoy special treats provided by the company. 
• Work from anywhere policy: Employers can introduce this policy to allow employees to work from home.

Final Thoughts

In conclusion, employers and employees must understand Indonesia employee benefits, including statutory and voluntary benefits. This will give them a broader understanding of utilizing employee benefits effectively.

If you need any assistance in understanding Indonesian employment laws, benefits, or Employer of Record (EOR) services, reach out to Aniday. We are always available, and you can contact us directly or through our Headhunting.

We hope this guide was helpful for you in understanding the quest in “Employee Benefit Indonesia”!