The following laws and regulations apply to foreign nationals who work in Indonesia:

Indonesian labour laws and regulations do not expressly differentiate between regulations imposed on foreign nationals and regulations imposed on Indonesian nationals. The principal legislation governing employment relations in Indonesia is the Labour Law. This law outlines the principal rules for:

Generally, foreign nationals can work in Indonesia, provided that the work to be performed cannot be performed by Indonesian nationals, and the work is not of the type that foreign nationals are prohibited from performing under the prevailing laws and regulations. Normally, this requirement is applied leniently and is further subject to additional regulations in a number of industries. Where a company cannot hire an Indonesian national with the appropriate skills, the company is allowed to employ foreign employees provided that at least one Indonesian national is simultaneously employed and trained by the company.

The Ministry of Manpower and Transmigration of the Republic of Indonesia has determined, as set out in the Labour Law, that the employment of foreign nationals falls under the category of employment for a definite period (Perjanjian Kerja Waktu Tertentu) (PKWT) because of the following:

Therefore, not all the provisions of the PKWT apply to foreign employees. For example, the provision of the Labour Law which stipulates that the period of PKWT can be extended or renewed does not apply to foreign national employees because these employees can only hold certain positions for a specific period of time.

The following laws and regulations apply to Indonesian nationals working abroad:

Law No. 39 of 2004 and its implementing regulations cover nationals working abroad through a government-appointed agent. The agent can be a government institution or a private entity. Private entity agents for Indonesian nationals working abroad must have a licence from the Ministry of Manpower and Transmigration.

The Law No. 13 of 2003 on Manpower (Labour Law) divides employees into the following two categories:

The Labour Law does not make a distinction between the statutory employment rights of a definite term employee and those of an indefinite term employee. Both employees have the same statutory employment rights (that is, the right to obtain a salary, to receive holiday allowances, and any other rights provided under the prevailing laws and regulations).

The Labour Law only stipulates the legal duration for a definite term employment agreement. A definite term employment agreement can only be performed for a maximum period of two years (with a further possible extension up to a maximum of one year, or a one-time-only possible renewal for a maximum period of two years).

There are no monetary grants or incentives for employing people.

In general, there is no official information or paperwork that needs to be filed when employing people. However, an employer must register the employment contract for employees who work for a definite period with the relevant Ministry of Manpower.

The Indonesian legislation, including the Law No. 13 of 2003 on Manpower (Labour Law), is silent on this matter. Based on the latest information from the official at the Ministry of Manpower, there are no prohibitions under the Labour Law on background checks on applicants.

Limited stay visas. A foreign national must obtain a limited stay visa (Visa Tinggal Terbatas) (VITAS) to be able to work in Indonesia. This visa has a minimum validity period of six months and a maximum validity period of two years.

The procedure for obtaining approval is the same as for obtaining approval of permits (see below, Permits: Procedure for obtaining approval).

The cost for obtaining a VITAS is about US$150.

Obtaining a VITAS takes about one month.

The following is a brief guide concerning the visas required for entry into Indonesia. The visas are classified on the basis of the purpose of the entry.

Visas for non-business visitors (tourists). A foreign national who wishes to enter into Indonesia for a purpose other than business can apply for either a tourist visit visa or a social and cultural visit visa. For citizens of certain countries, the tourist visit visa can be obtained at the immigration desk at the point of entry on arrival. The social and cultural visit visa can be applied for from the home country at the Indonesian Consulate. Under the terms of the tourist visit visa (which is valid for two months and is non-extendable), the holder is not allowed to perform any form of official business activities. The social and cultural visit visa is valid for one month and is extendable four times.

Visas for business visitors. A foreign national who wishes to come to Indonesia for business purposes can apply to the Indonesian Embassy in the country of his residence for a business visit visa with no permit to work. This business visit visa is valid for a maximum period of two months and expires as soon as the holder leaves the country. As long as the holder is still in the country, the business visit visa can be extended in Jakarta up to four times, each time with a maximum validity of one month.

The holder of this visa can visit offices and attend business meetings, but is not allowed to perform actual work. If, during the initial two-month period, the holder wishes to interrupt his stay in Indonesia, it is more efficient for him to apply for a multiple visit visa. The multiple visit visa is valid for 12 months, with a maximum duration of two months for the initial visit and a maximum duration of one month for subsequent visits. With this multiple visit visa, a foreign national can travel in and out of Indonesia as many times as he or she wishes or needs to in any 12-month period, and can undertake all activities that a holder of a business visit visa with no permit to work would be entitled to.

This type of visa is not renewable on its expiry or on the exit of the holder from Indonesia. If the VITAS is expired, the employee must physically leave Indonesia and will need to apply for a new visa.

Sanctions. Under Article 121 of Law No. 6 of 2011 concerning immigration (Immigration Law), a foreign national can be subject to imprisonment for a maximum period of five years and a maximum fine of IDR500 million if they:

The following individuals may be subject to imprisonment for a maximum period of five years and a maximum fine of IDR500 million (Article 122, Immigration Law):

The following individuals can also be subject to imprisonment for a maximum period of five years and a maximum fine of IDR500 million (Article 123, Immigration Law):

Procedure for obtaining approval. The employer must first apply to the Ministry of Manpower and Transmigration through its online system (www.tka-online.depnakertrans.go.id) for the Ministry's approval of its Expatriate Manpower Utilisation Plan (RPTKA), which is the master document for processing individual work permits for foreign employees. The RPTKA contains information on the number, functions and employment periods of the foreign employees.

Processing an RPTKA approval takes about ten to 15 working days.

After obtaining the RPTKA, an employer must further obtain a permit to employ expatriate (IMTA) from the Minister of Manpower and Transmigration for its foreign employees. The application for IMTA must also be submitted through the Ministry of Manpower and Transmigration online system (www.tka-online.depnakertrans.go.id). The IMTA is valid for one year.

In certain regions, foreign nationals who work in Indonesia must also obtain a number of other permits.

The employer must also pay an annual contribution of US$1,200 to the Compensation Fund for the Utilization of Expatriate (Dana Kompensasi Penggunaan Tenaga Kerja Asing) (DKP-TKA).

After the issuance of both the RPTKA and IMTA, the employer can submit a VITAS application to the Immigration Office. If the VITAS application is accepted, the Immigration Office will send a telex confirming the approval to the Indonesian embassy in the foreign national's country of domicile. The foreign national must then collect the approval at the Indonesian embassy and get the VITAS stamp on their passport.

The time frame for processing the required permits is about two to three months.

Sanctions. The sanctions for failing to comply with the obligation to obtain the written permit to employ foreign nationals from the Ministry of Manpower and Transmigration are:

Procedure for obtaining approval. The foreign worker must submit the application for the limited stay permit to the Immigration Office no later than seven days after their arrival in Indonesia (verified by the entry permit). If the application is approved, the Immigration Office issues a Limited Stay Permit Card (KITAS), following which the employee receives a "control blue book" to record changes, if any, to his immigration status. The KITAS is valid for one year.

For sanctions see above, Visas: Sanctions.

Filings when foreign nationals start work. There are no official filings that need to be made when the foreign nationals start working in Indonesia, except for an extension of the work permit and stay permit and other related documents, as they are valid for 12 months.

Indonesian Company Law No. 40 of 2007 (Company Law) outlines the requirements, constraints and conditions in relation to company directors. The law is silent on any age restrictions imposed on company directors. Article 93 provides that the director must simply be "capable of performing legal actions". Therefore, the individual must have mental capacity to perform legal decision-making actions and have reached the age of majority. Under the Indonesian Civil Code, only persons who have reached the age of 21 can be considered as capable of performing legal actions.

The Company Law is silent on any nationality restrictions imposed on company directors.

The only explicit restrictions imposed on company directors are that they cannot, in the five years preceding their appointment, have been (Article 93(1), Company Law):

In addition, the authorised technical agencies are entitled to determine additional requirements under the applicable legislative regulations (Article 93(2), Company Law).

Members of a board of directors must be appointed by the general meeting of shareholders. A company's articles of association can also provide certain additional requirements and procedures for the election of company directors.

Employment agreements can be made for a definite or indefinite period of time (Law No. 13 of 2003 on Manpower (Labour Law)). Specifically, a fixed-term employment agreement must be made in writing, in the Indonesian language using the Latin alphabet (some Indonesian dialects do not use the Latin alphabet) (Article 57, Labour Law). If an employment agreement is in both Indonesian and a foreign language, the Indonesian version prevails in the event that there are differences in interpretation.

Employment agreements of an indefinite term can be made either orally or in writing (Article 51, Labour Law).

Any written employment agreement (fixed-term or indefinite) must state the following as a minimum:

In addition, it must be signed by the parties to the agreement.

Employment agreements of an indefinite term can be made orally or in writing (Article 51(1), Labour Law). However, in practice, employment agreements should be made in writing. An employment agreement can be made orally only if circumstances do not permit it to be made in writing.

There are no implied terms in employment agreements under the Labour Law or other applicable laws and regulations.

If a company has a registered labour union, the labour union can enter into a collective labour agreement (CLA) with the management of the company. A labour union can be established by at least ten employees in any business industry. The CLA is valid for two years but can be extended. Only a duly registered trade union with a registration number has the right to negotiate a collective labour agreement with the employer's management.

An employment agreement is a contract. Under the Indonesian Civil Code, a contract cannot unilaterally be changed and, therefore, an employment agreement cannot be unilaterally changed or revoked.

There is no national minimum wage. Instead, all 33 provinces settle their own minimal wage every year, which can also vary depending on industry. The minimum wage is generally set based on the estimated amount required to cover all basic needs.

For example, the minimum wage in Jakarta, in 2015, was set at just over IDR274 million per month.

The minimum wage is intended to cover employees working a 40-hour week in the formal sector (that is, any job sector or industry that is recognised, monitored and regulated by the government). The minimum wage requirement only applies to employees (whether working under a definite or indefinite employment contract) whose length of service is less than one year. For employees whose length of services is more than one year, the amount of wage will be negotiated by the employee and the employer.

There are two types of minimum wage:

The minimum wage of a regency cannot be higher than the minimum wage of the province.

There is some evidence of the increasing role of trade unions in wage bargaining. If the salary is composed of basic wage and fixed allowances, the amount of the basic wage must not be less than 75% of the total remuneration.

An employee can work a maximum of 40 hours per week, allocated in one of the following ways:

It is prohibited to employ the following employees between 11pm and 7am:

In general, employers who require an employee to work outside the normal working hours must pay overtime wages to the employee, unless the employee's position, function or job is that of a "thinker, planner, implementer or controller" whose working hours cannot be limited to normal working hours. These categories of employees are not entitled to overtime wages, but are entitled to a higher salary than that of ordinary employees. Overtime can only be performed for a maximum period of three hours per day and 14 hours per week. The overtime pay rate for one hour is 1/173 of the monthly wage plus fixed allowances, if any.

Employees are entitled to at least an half an hour break after four continuous hours of work (Law No. 13 of 2003 on Manpower (Labour Law)).

Under Indonesian labour laws and regulations, shift workers are those normally employed as blue-collar workers and security guards. For shift workers, the total working hours per day is eight hours and no more than 40 hours per week .

Workers who work a five-day week have Saturday and Sunday off. Workers who work six days a week are entitled to Sunday off. All employees are entitled to 12 working days of paid vacation per year after one year's uninterrupted service.

Workers are not obliged to work on formal public holidays (Law No. 13 of 2003 on Manpower (Labour Law)). Employers who require their employees to work on formal public holidays must pay the concerned employees for overtime work (see Question 10, Working hours). The Minister of Manpower together with the Minister for Religious Affairs and the Minister for the Utilisation of State's Apparatus issue a Joint Ministerial Decree every year, stipulating the specific date for each public/national holiday. Most public holidays are religious dates and, as most religions function under a different calendar (for example, the lunar cycle), the exact dates vary from year to year. Public holidays are included in the minimum holiday entitlement.

Employees are entitled to paid sick leave in the case of illness or injury that is evidenced by a medical certificate or statement.

Employees are also entitled to long-term paid medical leave provided that such leave is recommended in writing by a doctor and lasts for a period greater than one year.

Female employees are also entitled to two days of menstrual leave (the first and second day of menstruation).

An employee who is experiencing a prolonged sickness continues to be entitled to the payment of wages, as follows (Law No. 13 of 2003 on Manpower (Labour Law)):

The employer pays these wages.

The employer cannot recover any of the costs from the government.

Pregnant employees are entitled to take three months' paid maternity leave, of which 1.5 months are taken in the pre-natal period and 1.5 months are taken in the post-natal period (Law No. 13 of 2003 on Manpower (Labour Law)). In this period, employees receive their full salary. A pregnant employee is entitled to receive her full salary during her pregnancy.

An employee who has had a miscarriage is entitled to a 1.5-month rest period, provided this is recommended in a medical statement issued by an obstetrician or midwife.

Employers must provide proper opportunities to female employees, whose babies still need breastfeeding, to breastfeed their babies if this must be performed during working hours (Labour Law).

Male workers are entitled to two days' paid paternity leave if their wife gives birth or miscarries.

The labour laws are silent on the rights of a surrogate mother or parents under a surrogacy arrangement to leave, pay and other benefits. Provided all legal documents are given to the employer, parents under a surrogacy agreement will have the same maternal and paternal rights as parents of a naturally born child.

Labour Law does not recognise this type of leave. As long as all legal documents are given to the employer, parents of an adopted child will have the same maternal and paternal rights as parents of a naturally born child.

An employee is entitled to paid family leave in the following circumstances:

All the above mentioned leaves are paid leave, which means that the employee is paid his full salary for the period of his leave. However, the employer is not obliged to pay the allowances that are conditional on the attendance of the employee.

Indonesian labour laws are silent on carers' rights. In practice, leave can be granted by an employer as unpaid leave. This also applies for emergency care for dependants, a spouse or a close family member. An employee may be given permission for unpaid leave. Likewise, an employee may be given leave for emergency care for himself and his immediate family members.

A worker becomes entitled to annual leave after working for 12 consecutive months (see Question 11, Minimum holiday entitlement). An employee who has been working for the same employer for six consecutive years may also be entitled to a leave of at least two months in the seventh and eighth year of work.

If employees are transferred from one company to another without dismissal, the new company must provide at least the same remuneration as the previous company. The new company must also recognise the length of service of the employees. This applies to all types of employee transfer.

The Law No. 13 of 2003 on Manpower (Labour Law) and other applicable regulations do not differentiate between the rights of temporary and agency workers and the rights of permanent employees. Temporary workers' terms and conditions, including salary, cannot be lower than what is provided for under the existing laws in relation to permanent employees.

An agreement for a definite or specified period can be an agreement for a specified period of time or an agreement for a specified job.

Under Indonesian labour laws, an agreement for a definite or specified period can only be extended once. Generally, it can only be made for a maximum period of two years (with the possibility of a one-time extension for a maximum period of one year, or a one-time renewal for a maximum period of two years). Employees who are hired for a definite period, or temporarily, are entitled to the remaining amount of pay if their employment is terminated before the end of the specified period of the job.

In relation to agency workers who are seconded to another company, protection and working conditions provided to the workers at the other company must be at least the same as the protection and working conditions provided at the previous company.

See above, Temporary workers.

The Labour Law and other applicable labour regulations do not recognise the concept of part-time worker. Therefore, a part-time worker will be entitled to the same rights as a permanent worker.

While Indonesia has enacted various laws relating to data privacy in a number of specific areas (for example, banking and tax), no laws have been enacted on the protection of an employee's privacy before, during or after employment. The only law that may be applicable in this case is the Human Rights Law No. 39/1999, which stipulates that each individual has the right to their own privacy, and cannot be subjected to an investigation without their agreement, except on the order of a court or other legitimate authority under prevailing legislation.

There are currently no specific laws on data protection in Indonesia. The Law No. 13 of 2003 on Manpower (Labour Law) is also silent on the issue of data protection in relation to human resources.

All persons that are qualified to perform a job have the same opportunity to obtain the job without discrimination (Article 5, Law No. 13 of 2003 on Manpower (Labour Law)). The interpretation of Article 5 provides, among other things, that all persons who are qualified to perform a job cannot be discriminated against on the grounds of:

In addition (Article 6, Labour Law):

Indonesia has also ratified the following International Labour Organisation (ILO) Conventions:

The Labour Law does not regulate protection from harassment for employees. However, a company's manual or collective labour agreement will normally contain a provision regarding harassment and its sanction. Indonesian case law also provides protection for workers from harassment. However, the Indonesian court system is based on a civil law system and does not follow the rule of stare decisis (a legal principle under which judges must respect the precedents established by prior decisions).

Employees wishing to take action against sexual harassment they have experienced in the workplace can file a claim on the basis of civil tort law. The labour laws and regulations are silent on the claim limitation period for this matter.

Employees cannot be dismissed for reporting suspected crimes committed by their employers (Article 153(1), Law No. 13 of 2003 on Manpower (Labour Law)). This can be interpreted as a form of general protection for whistleblowers. There are no specific provisions regarding the protection of whistleblowers under the law.

The law does not set out notice periods for ordinary dismissals and unfair dismissals. However, in practice a 30-day notice must be given to terminate an employment contract.

The Law No. 13 of 2003 on Manpower (Labour Law) regulates individual employment termination and provides for:

In addition, an employer can dismiss an employee if:

The labour law sets out the dismissal and severance payment requirements. The amount and type of severance to be paid to an employee can vary depending on the basis of the dismissal. If the dismissal is due to the employee's fault, the employee is entitled to the following:

If the dismissal is not due to the employee's fault (dismissal without cause), the employee is entitled to two times the severance pay amount plus the standard service appreciation pay and compensation. The Labour Law does not contain separate provisions on severance payment for ordinary dismissals and unfair dismissals. However, it provides different formula of severance pay for the different reasons of dismissal/employment termination.

If the employee violates the provisions under the employment agreement, company regulations or CLA, then the employer can terminate the employment after it issues three consecutive disciplinary (warning) letters (Article 161, Labour Law).

In all other cases, the employer must attempt to negotiate the proposed dismissal with the employee or applicable labour union. In addition, all employment termination plans (except where dismissal is caused by the resignation of the employee) require approval, in the form of a decision of authorisation of the Industrial Relations Court. If the employee and the employer agree to the employment termination, they must enter into a mutual employment termination agreement. This must be done simultaneously with the payment of the severance package (see above, Severance payments). The entire transaction must be registered with the Industrial Relations Court, after which the court issues a deed of registration of the employment termination.

The long and expensive procedures involved with employment termination have induced employers to try and conclude an amicable settlement with employees.

If procedures are not followed or the parties do not reach a termination agreement, each party can bring the case to a mediator (officials from the Manpower Department). If the case cannot be settled through mediation, the mediator will forward the case to the Industrial Relations Court, and the losing party can appeal to the Supreme Court.

Law No. 13 of 2006 on the protection of witnesses and victims (Law No. 13/2006) provides protections for witnesses and victims at all stages of court proceedings within court jurisdiction. The protection to witnesses and victims is aimed at providing a sense of safety to witnesses and/or victims in presenting their testimony in a court proceeding. Article 10 sets out that witnesses, victims and people who report an offence should not be prosecuted under the criminal or civil code for the report or testimony which they will give, are giving or have given. These provisions are not applicable to witnesses, victims and people who provide information without a good intention.

Under Law No. 13/2006, whistleblowers cannot be discriminated against. Based on the principle of equality before the law, witnesses and victims in a court proceeding must be given a guaranteed legal protection.

An employee cannot be dismissed under certain circumstances, including the following (Article 153(1), Law No. 13 of 2003 on Manpower (Labour Law)):

Dismissal under one of the circumstances listed above will be declared null and void, and the employer will then be obliged to re-employ the employee concerned.

See above, Protection against dismissal.

The labour regulations do not contain provisions on redundancy notification. There is no specific definition of redundancy or layoff in Indonesian labour law. Redundancy or layoff would be treated as dismissal without cause (see Question 19). An employer should provide evidence as grounds for the redundancy. In particular, the evidence is needed if the case is brought to a government institution that handles labour cases.

Employers who wish to dismiss employees must first obtain approval from the Industrial Relations Court. Following this, consultation or discussion with the employee or labour union is required prior to mass or individual dismissal (see Question 19, Procedural requirements for dismissal).

The redundancy pay/severance package is calculated on the basis of the employee's:

Since redundancy/layoff is treated as dismissal without cause, the employee is entitled to two times the severance pay amount plus the standard service appreciation pay and compensation.

Under the Ministry of Manpower and Transmigration's Decision No. 150/MEN/2000 (as amended by the Ministry of Manpower and Transmigration's Decision No. KEP-111/MEN/2001 regarding the settlement of termination of employment and the determination of severance pay, service appreciation pay and compensation pay), "collective redundancies" means:

Collective redundancies require the permission or approval of the Labour Dispute Settlement Committee.

There is no requirement under law that employees be represented at management level. Management representation is regulated by the Company Law No. 40 of 2007 (Company Law). A company's articles of association can provide a procedure and requirements relating to the management team's selection (Company Law).

An employer whose company is engaging in a merger or acquisition, or whose company is changing ownership, must notify its employees of the merger or acquisition, or change of ownership (Articles 127(1) and (2), Company Law). Notification must be made at least two weeks before the respective transaction, to allow employees to decide whether they want to continue their employment following the transaction. This procedure (sale of shares), including an announcement in a newspaper, only applies for a change in shares of the controlling shareholders. In relation to an asset sale, the announcement to employees is not mandatory, but is done in practice.

Employee opinion can be voiced and can have an impact on the stakeholders' decision, as the employees have the opportunity to resign if they are not satisfied with the planned action or change.

Employee consent is not required for major transactions (see above, Consultation).

An employee can voice their concerns with the Ministry of Manpower and Transmigration appointed mediator. However, there is no requirement for an employer to consult their employees on major transactions. Despite there being no consultation requirement, the employer is required to notify the employees in the event that such a transaction will result in termination of their employment.

Employees cannot take any action other than voicing their concerns (see Question 22).

Employees are not automatically transferred on a business transfer. The following three options are possible in relation to permanent employees:

A non-permanent worker whose employment is not continued by the new employer is entitled to receive the wages for the remaining period of his contract.

There is no protection against dismissal for employees on a business transfer (see above, Automatic transfer of employees). However, as with all dismissal claims, the Industrial Relations Court approval is required before an employee can be dismissed (see Question 19, Procedural requirements for dismissal).

If the employment continues following the business transfer, the terms and conditions of employment must be the same as before the transfer, unless the change is approved by the Industrial Relations Court. The new employer must also recognise the employee's continuous length of service.

The labour laws are silent on the employer's liability for the acts of its employees. However, an individual must be responsible for the damage that he has caused by his own act, as well as for that which was caused by the acts of the individuals for whom he is responsible, or caused by matters that are under his supervision (Article 1367, Civil Code). Therefore, an employer may be liable for the acts of its employees.

Indonesian law does not provide for a parent company's liability for the acts of its subsidiary company's employees.

In the event of the employer's insolvency, the affected employees are entitled to a one-time payment of the stipulated severance pay, service appreciation pay and compensation pay.

The Law No. 13 of 2003 on Manpower (Labour Law) does not provide for a state guarantee fund. However, it does provide that, in the event of the employer's insolvency, the employee's salary and any other outstanding rights of the employee are treated as prioritised debts of the company.

Law No. 1 of 1970 regarding Occupational Safety sets out the general framework for the implementation of occupational safety. An employer must establish an occupational safety and health management system that complies with the legal requirements if it both:

An employees' representative must agree to the workplace occupational safety and health management system. The system must also be explained to all the company's employees, suppliers and customers. The Ministry of Manpower and Transmigration must supervise the implementation of the system, and evaluate and assess the system on a regular basis.

Resident foreign employees are taxed on the part of their salary earned in Indonesia and other remuneration earned during their stay in Indonesia (for example, bonus and religious holiday allowance). The Indonesian portion of the salary is taxed at source, and the employer must withhold the tax.

Non-resident employees (that is, an individual who does not reside in Indonesia and is present in Indonesia for less than 183 days in any 12-month period, or an entity that is not domiciled in Indonesia and is not conducting business or carrying out activities in Indonesia through a permanent establishment) are generally subject to a withholding tax of 20% of their gross income from Indonesia (Law No. 13 of 2003 on Manpower (Labour Law)).

Indonesia has concluded several tax treaties and agreements with other states. Taxation rates and deductions can be altered under these treaties. Double taxation treaties offer a lower withholding tax rate, usually 10% or 15%. In addition, most treaties provide an exemption from withholding tax where interest is paid to the government or other specified authority of the other country. The treaties also provide a "time test" for determining when a permanent establishment is deemed to exist. By the end of 2008, Indonesia had negotiated and implemented tax treaties with 57 countries.

Deductions can be made for dependant spouses and children. In addition, foreign nationals may be able to claim for some expenses that are paid for by the employer, such as accommodation or vehicles. However, this depends on how the employer has classified these payments. Items such as healthcare costs are classified as income.

Indonesia exempts the portion of the employee's salary that is attributable to a foreign company from taxation.

Non-resident individuals are subject to a withholding tax of 20% on their gross income from Indonesia (Law No. 13 of 2003 on Manpower (Labour Law)), unless the provisions of a double taxation treaty provide otherwise.

Tax resident individuals are subject to the following rates of income tax:

On 25 November 2011, the Indonesia Government issued Law No. 24 year 2011 regarding the Social Security System (Law No. 24). This Law regulates the provision of the social security system for Indonesian workers, as well as for foreign nationals who have worked in Indonesia for at least six months. A special institution named the Social Security Management Board (known locally as Badan Penyelenggara Jaminan Sosial or BPJS) was set up to administer the social welfare system.

BPJS is a non-profit institution. Law No. 24 distinguishes between two different types of social security programmes for employees, which BPJS manages:

Law No. 24 states that employers must register all their employees (including expatriates who work for more six months) in both these programmes.

The manpower social security programme was formerly known as the Jamsostek programme. Until the implementing regulations on the manpower social security programme are issued, certain provisions of the Jamsostek programme are still applicable. Employees who are already members of the Jamsostek programme will automatically become members of the manpower social security programme.

The following contributions must be made by both the employer and employee for both social security programmes:

The only recognised bonus under the Law No. 13 of 2003 on Manpower (Labour Law) is the Tunjangan Hari Raya (THR) or religious allowance. The THR is paid to workers who have been working for longer than three months. Workers who have been working for a consecutive 12-month period are entitled to a minimum THR amount of one month's salary. The THR must be paid no later than seven days before the Idul-Fitr holiday. In practice, contractual or discretionary bonuses can be provided to employees.

If a work is made in the course of an employment relationship or based on an order from the employer, the party who creates the work is deemed to be the creator and copyright holder, unless agreed otherwise by the parties (Article 8(3), Law No. 19 of 2002 concerning copyright law). In addition, the author of the work is entitled to both economic and moral rights. The moral rights in a work cannot be transferred, even if the economic rights have been transferred to another party. IP rights differ depending on the laws relating to the industry in which they are created.

The party who assigned the work is the party who is entitled to the patent for an invention produced in the course of an employment relationship, unless otherwise agreed by the parties (Article 12(1), Law No. 14 of 2001 concerning patent law). Inventors are entitled to compensation determined by the concerned parties. The law recognises inventors' moral rights, who are entitled to have their name stated on the patent certificate.

Indonesian laws do not restrict an employer's ability to impose non-competition and non-solicitation covenants on an employee, provided the employer and employee have entered into a formal agreement regarding this matter.

The employer is not required to continue paying former employees while they are subject to post-employment restrictive covenants.

The government is planning to reform the Law No. 13 of 2003 on Manpower (Labour Law) to address:

In 2010, the government established a committee to review and redraft the Labour Law. The government hoped that the review would be completed and a new draft produced by 2013. However, so far the new Labour Law has not yet been issued.