Indonesia flag Indonesia: Operating a Business in Indonesia

Work conditions in Indonesia

The Active Population in Figures

201820192020
Labour Force 132,587,588135,802,879134,616,083

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 68.98%69.65%70.20%
Men activity rate 83.67%83.85%84.14%
Women activity rate 54.01%55.18%55.99%

Source: International Labour Organization, ILOSTAT database

 
Employed Persons, by Occupation (% of Total Labour Force) 2015
Agriculture, forestry and fishing 32.9%
Wholesale and retail trade; repair of motor vehicles and motorcycles 18.6%
Manufacturing 13.5%
Construction 7.1%
Education 4.9%
Accommodation and food service activities 4.6%
Transportation and storage 4.0%
Public administration and defence; compulsory social security 3.5%
Financial and insurance activities 1.5%
Human health and social work activities 1.3%
Mining and quarrying 1.1%
Administrative and support service activities 0.9%
Information and communication 0.5%
Arts, entertainment and recreation 0.4%
Professional, scientific and technical activities 0.3%
Real estate activities 0.3%
Water supply; sewerage, waste management and remediation activities 0.2%
Electricity, gas, steam and air conditioning supply 0.2%
 
For Further Statistics
The Indonesian Labor Market
For Further Information About the Labour Market
Portal for official information about Indonesia

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Working Conditions

Legal Weekly Duration
The legal duration of work is 7 hours a day and 40 hours a week for 6 working days in a week, or 8 hours a day and 40 hours a week for 5 working days in a week.
Retirement Age
55
Working Contracts
The work contract is essentially governed by the law and to a lesser extent by individual negotiation and collective agreements. Hiring conditions are strict and the formality of the work contract is rather rigid.

There are two types of contracts: fixed term and open-ended.

Labour Laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labour

Minimum Wage
The minimum wage fluctuates a lot depending on provinces. In January 2022, the highest minimum wage was for Jakarta, at 4,641,854 rupiah per month (USD 322.10), an increase of 5.1% from 2021. The lowest minimum wage was for Central Java, at 1,812,935 rupiah per month, an increase of 0.78% from 2021.
Average Wage
The average salary in the country is around 12,100,000 IDR per month (USD 862) (Salary Explorer, 2022).
Social Contributions
Social Security Contributions Paid By Employers: 0.24%-1.74% for work accident protection; 0.3% for death insurance; 3.7% for old age savings; 2% for pension; 4% for healthcare. The monthly income cap for pension contribution is updated annually. Since 1 January 2020, maximum salary cap for health insurance is IDR12,000,000.
Social Security Contributions Paid By Employees: 2% of gross monthly earnings for old age insurance; 1% of gross monthly earnings for health insurance; 1% for pension. As of 1 January 2020, maximum salary cap for health insurance is IDR 12,000,000. The monthly income cap for pension contribution is updated annually.

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Social Partners

Social Dialogue and Involvement of Social Partners
We can mention the ASPEK Indonesia union.
Unions
National Front for the Indonesian workers' struggle (FNPBI)
Unionisation Rate
Less than 4% of the active population (formal and informal sectors) and 14% of the active population (formal sector).
Labour Regulation Bodies
National Portal of Indonesia with information about work market and regulations

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Latest Update: June 2022

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