We make it straightforward for international IT companies to employ people in Indonesia. As your Employer of Record (EOR) we become the legal employer of your staff, carrying the contracts, the payroll and the compliance, while you direct the work.
Local expertise, a boutique client list and incentives that point the same way yours do. Here is how CloudInovasi keeps your Indonesian team employed properly.
We are small enough to care
Every client works directly with the people running the account. Nobody gets handed to a ticket queue.
We move quickly
Contracts drafted, signed and lodged within days, because we are not waiting on an offshore approval chain.
We verify in person
We meet your chosen candidate face to face to check their identity and credentials, and to witness the contract signing. Document fraud is a real risk in this market and a video call does not catch it.
We know the local law in detail
Indonesian employment law is prescriptive about contracts, working time, social security, severance and the thirteenth payment. Our team works inside those rules every day, so your obligations are met without you having to learn them.
Our services
Everything required to employ someone in Indonesia lawfully, from the contract through to the final severance calculation.
You choose, we employ
You select the person you want. We draft a compliant Indonesian employment contract to the terms you set, meet your candidate in person to verify their identity and credentials, and witness the signing. From that point they are lawfully employed and reporting to you.
We run the employment
Monthly payroll, PPh 21 income tax, BPJS social security, the thirteenth month THR allowance, leave tracking and benefits. You receive one invoice and your employee receives everything the law entitles them to.
We handle the exit
When someone leaves, whether they resign or the role ends, we manage notice, the severance calculation and the final settlement under Indonesian law. Exits are where employment disputes originate, so this is the part worth having done properly.
We do not recruit, and that is deliberate
A recruiter is paid each time a person changes job. Place someone today and the same economics reward moving them again next year, to another client, for another fee. That incentive sits directly against the interests of the company that just hired them.
As an Employer of Record we earn a recurring fee only for as long as your employee stays. Retention pays us. Churn costs us. There is no finder's fee anywhere in our model, and no version of our business that improves when your team turns over.
Bring us your chosen candidate and we will employ them properly. If you need sourcing, we are glad to point you at recruiters we respect, and we take nothing for the referral.
Hire without committing IDR 2.5 billion of paid-up capital and an investment plan above IDR 10 billion
Employing staff directly in Indonesia means incorporating a foreign-owned company. With an Employer of Record you employ nobody directly, so neither threshold applies to you.
Thresholds per BKPM Regulation No. 5 of 2025. Investment plan applies per business activity code, per location, excluding land and buildings.
Key regulations
The Indonesian rules that most often surprise a first-time employer, and how we deal with each one. Our guides go into the detail.
Thirteen payments a year, not twelve
Employers must pay THR (Tunjangan Hari Raya), a religious holiday allowance worth one month's wage, in addition to the twelve monthly payments. It falls due no later than seven days before the employee's own religious holiday, which means Eid al-Fitr for Muslim staff, Christmas for Catholic and Protestant staff, Nyepi for Hindus, Vesak for Buddhists and Chinese New Year for Confucians. Employees with at least one month but under twelve months of service receive a pro-rated amount. Any performance bonus you offer sits on top of all thirteen payments, so budget accordingly.
Social security is mandatory
Every employee must be enrolled in BPJS (Badan Penyelenggara Jaminan Sosial), the state social security scheme. The employment arm, BPJS Ketenagakerjaan, covers old-age savings (JHT, Jaminan Hari Tua), pension (JP, Jaminan Pensiun), work accident cover (JKK, Jaminan Kecelakaan Kerja) and a death benefit (JKM, Jaminan Kematian). Health cover sits with BPJS Kesehatan. Contributions are split between employer and employee, and the pension contribution is capped at a wage ceiling that BPJS revises every February. Our cost calculator shows each line at the current rates.
Salaries are negotiated net
Indonesian candidates almost always quote and negotiate the figure that lands in their bank account, not a gross package. If you agree a number without establishing which one you are discussing, your real cost is materially higher than you budgeted once income tax and social security are added on top. This catches out nearly every first-time employer in the market, and it is the single most useful thing to establish before you make an offer.
Termination is prescriptive
Indonesian law sets out how employment may end. Termination requires a valid reason, commonly poor performance or misconduct, and the employer must serve proper notice before ending the relationship. Severance is calculated from length of service and final salary. Where a termination is found to be wrongful, the employee is entitled to a settlement on that same basis, so the process and the paperwork matter as much as the decision.
Working time and overtime
The statutory working week is 40 hours, and hours beyond that attract overtime pay as a legal requirement that sits outside company policy. Employers must also meet the applicable minimum wage, which is set regionally and reviewed periodically against inflation and living costs, so the floor in Jakarta differs from the floor in other provinces.
