HR, PEO & Employer of Record (EOR) Services in Indonesia

Introduction

Indonesia offers immense opportunities for businesses seeking scale and resilience. With a rapidly growing middle class, strong digital adoption, and abundant natural resources, it has become a strategic hub for investment across industries like e-commerce, renewable energy, manufacturing, and infrastructure. Expanding into Indonesia means tapping into a dynamic market that bridges Asia and the global economy.

EOR & PEO Solutions in Indonesia

If you’re looking to hire employees in Indonesia without setting up a legal entity, using an Employer of Record (EOR) like Empleyo is the simplest and most compliant path forward. An EOR in Indonesia acts as the official legal employer on your behalf, managing everything from payroll and HR administration to employment contracts and statutory employee benefits.

This model allows you to expand into Indonesia quickly, while remaining fully compliant with local labor laws without the complexity or cost of registering a local entity.

What Is an Employer of Record in Indonesia?

An Employer of Record Indonesia (also known as an EOR provider) enables businesses to hire and onboard Indonesia employees without having to incorporate in-country. The EOR manages:

You continue to oversee your team’s day-to-day tasks, while the EOR service handles legal obligations as the official employer on paper.

What’s the Difference Between EOR and PEO?

A Professional Employer Organization (PEO) typically supports businesses that already have a registered entity in Indonesia, offering co-employment solutions for HR, payroll, and benefits. An EOR, however, is ideal when you don’t have a legal presence in Indonesia but still want to hire full-time staff.

Whether you choose an EOR or PEO depends on your Indonesia hiring strategy, budget, and long-term plans for the market.

Benefits of Using an EOR Service in Indonesia

By using an EOR solution, companies can confidently build their team in Indonesia, access top talent in Indonesia, and stay focused on business growth without getting tangled in bureaucracy.

Hiring in Indonesia

Indonesia is a thriving market with a growing pool of skilled professionals, making it an ideal destination for businesses looking to expand globally. But to hire in Indonesia successfully, it’s important to understand your options especially when you don’t have a legal entity in Indonesia.

That’s where using an Employer of Record in Indonesia makes all the difference.

Your Hiring Options in Indonesia

Businesses have two main paths to hire employees in Indonesia:

The second option is faster, lower-risk, and ideal for companies that want to test the Indonesian market, launch quickly, or hire remote employees without permanent infrastructure.

Why Use an EOR to Hire in Indonesia?

This approach is especially useful for startups, global teams, and growing businesses that need to hire quickly and remain fully compliant.

Employment in Indonesia

Understanding how employment in Indonesia works is key to managing your team successfully and staying compliant. Whether you’re hiring directly or using an Employer of Record (EOR), companies must follow Indonesian labor laws closely especially when it comes to employment contracts, payroll, and employee benefits.

That’s why many growing businesses choose to use an EOR in Indonesia to handle these responsibilities with confidence.

Employment Contracts in Indonesia

All employees in Indonesia must be hired under a written employment contract, clearly outlining the job role, salary, benefits, working hours, and duration of employment. Contracts must comply with the Labor Code of Indonesia, and are usually signed before or on the first day of work.

By working with a Indonesia employer of record, you can ensure that all employment contracts in Indonesia are properly structured, compliant, and aligned with local requirements without having to hire a full in-house HR team.

Payroll & Employer Contributions

Payroll in Indonesia involves more than just paying a monthly salary. Employers are required to withhold income tax and make contributions to:

These deductions and employer contributions are calculated based on the employee’s gross monthly salary, and must be submitted on time to remain compliant. An EOR in Indonesia handles this for you, managing all payroll, tax filings, and reporting on your behalf.

Employee Benefits and Leave

Indonesian labor law mandates several employee benefits, including:

Using an employer of record service ensures your team in Indonesia receives all required benefits and that your business remains fully compliant with Indonesian employment law.

Termination & Notice Periods

Ending an employment contract in Indonesia requires careful adherence to local labor laws, particularly around termination procedures and notice periods. Employers must follow statutory guidelines, which include valid grounds for termination, advance notice, and in many cases, severance obligations.

Partnering with an Employer of Record (EOR) ensures compliance, reduces risk, and streamlines the process of managing employee exits in a fair and legally sound manner.

Visas & Permits in Indonesia

If you’re planning to hire employees in Indonesia or bring in foreign talent, understanding Indonesia’s visa and permit requirements is critical. Navigating these processes can be complex, but working with a trusted Employer of Record (EOR) in Indonesia makes it much easier.

An experienced EOR provider will ensure all permits are handled legally, so you can focus on building your team in Indonesia with confidence.

Work Permits for Foreign Employees in Indonesia

Foreign nationals planning to work in Indonesia for more than 30 days must obtain a work permit and a limited stay permit, which is a complex multi-step process. The employer is responsible for sponsoring the foreign employee and must first obtain an Expatriate Placement Plan (RPTKA) approval from the Ministry of Manpower.

After this, the employer applies for a work permit (IMTA), and subsequently, the employee applies for a Limited Stay Visa (VITAS) from an Indonesian embassy abroad. Upon arrival in Indonesia, the employee must then convert the VITAS into a Limited Stay Permit (KITAS), which grants legal residency. The work permit is specific to a job, employer, and location, and foreign workers are subject to restrictions on the types of positions they can hold.

Types of Visas for Foreign Talent

There are several types of visas used to work or do business in Indonesia, including:

Each visa type has specific use cases, duration limits, and documentation requirements. If you’re looking to hire in Indonesia or send international staff temporarily, an EOR Indonesia solution helps you identify the right visa and manage the application process end-to-end.

Business Permits for Foreign Companies

To operate directly in Indonesia, foreign companies typically need to register a legal entity in Indonesia and apply for a business license. This can be a time-consuming process that includes office registration, investment approvals, and compliance with Indonesian labor laws.

Alternatively, you can use an EOR in Indonesia to bypass the need for a local entity. The Indonesia employer of record is already registered and authorized to employ staff and manage payroll, contracts, and local compliance — making it easier and faster to hire employees in Indonesia.

Why Visas & Permits Matter for Global Hiring

If you’re hiring foreign employees in Indonesia, or placing international staff in-country, it’s essential to stay compliant with immigration laws. The right employer of record service helps you:

Common Questions on EOR in Indonesia

How quickly can an EOR help me hire an employee in Indonesia?

While timelines can vary, an EOR generally offers a fast-track solution, with some providers claiming to onboard an employee within a few weeks or even days, as they handle all the legal and paperwork requirements.

Who is the legal employer of the worker?

The EOR becomes the official, legal employer of the worker in Indonesia. However, the client company retains full control over the employee's day-to-day work, including job responsibilities, performance management, and assignments.

What types of employees can be hired through an EOR in Indonesia?

EORs can engage both local Indonesian nationals and foreign employees, though foreign hires require proper work permits and visas. The EOR manages compliance with labor laws and immigration requirements for each type of worker.

Is it legal to use an EOR in Indonesia?

Yes, EOR arrangements are legal so long as the provider operates under the regulatory framework governing outsourcing entities, remains properly licensed, and fulfills all statutory employment obligations.

Do EORs mitigate compliance risks in Indonesia’s complex labor law environment?

Absolutely. EORs are especially valuable in Indonesia, due to its detailed and evolving employment regulations. Engaging one helps ensure contract accuracy, benefits compliance (like BPJS and THR), and adherence to regional minimum wages.