Payroll in Indonesia is the list of employees who are entitled to receive remuneration under their employment agreement. The employer also needs to withhold and report income tax on the salary paid to its employees, among other requirements.
As part of the payroll service in Indonesia, our team offers business owners the support they need to properly manage the payment of their staff, as well as adequately retain the due amounts and make the needed reports on the income tax on the remuneration paid by the company to its employees.
If you are interested in starting a business, using our payroll service in Jakarta is helpful, as many companies choose to outsource payroll processing and management.
Company formation in Indonesia is subject not only to the mandatory company registration steps but also to ongoing tax and reporting compliance. Our team offers payroll services as a standalone solution or as part of larger, more comprehensive packages. You can reach out to us as needed for more information about the services we provide to businesses.
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Payroll service in Indonesia offered by our team
Indonesian companies are required to pay a number of taxes and, as a result, understanding the full tax compliance requirements is a first and important step for investors.
As part of payroll in Indonesia, the company (employer) is required to withhold, remit, and report the income tax on the wages/salaries it pays to its staff.
All companies that hire employees are expected to make contributions to the National Social Security System. This is needed even in the case of foreign nationals who only work in the country on a temporary basis. A company that offers services related to payroll in Indonesia will take into account these requirements and will ensure the company’s compliance with the mandatory contributions.
When selecting the provider who offers payroll service in Indonesia, one should verify that the third party offers the following:
- Salary calculation and payment: calculating the due wages and making the salary payments to the company’s staff;
- Other employee payments: tracking overtime hours and due bonuses, and making these payments as needed;
- Social security contribution filing: according to the schedule set forth by the Indonesian tax authorities for the reports concerning social benefits and social benefit payment computation sheets;
- Social security tax payments: calculating the due payments according to the social security amounts and making these payments in due time.
Our Indonesian company formation agents not only specialize in matters concerning the registration of business entities and their ongoing compliance. We also assist clients with services related to payroll, and mandatory contributions.
If you would like to know more about the payroll service in Jakarta provided by our team, you can reach out to us for more information and personalized solutions.
Mandatory social security contributions in Indonesia
There is no separate tax for payroll in Indonesia, however, companies are expected to make contributions to the National Social Security System in varying degrees. These are paid both by the employer and by the employee, and in all cases, the latter will pay a lower percentage, compared to the former.
The following social security contributions apply in the case of the employer:
- 0.24% to 1.74% for work accident protection; our team specializing in payroll service in Jakarta assists companies in calculating this percentage, according to risk level;
- 0.3% for death insurance;
- 3.7% for old age savings;
- 2% to the pension plan, subject to a salary cap;
- 4% contribution to the healthcare scheme, also subject to a salary cap.
You can contact us for a complete description of our payroll service in Indonesia which also includes the correct and complete calculation of these social security contributions. We assist companies every step of the way, from their earliest pre-registration stages to the moment they decide to hire staff or need to handle important tax compliance matters.
You can also reach out to us if you are interested in matters concerning other issues, not only payroll in Indonesia, such as relocation or immigration, such as applying for an investor visa or renewing residence permits.