PT PMA Hiring in Indonesia: What Companies Must Know

January 7, 2025

If you’re setting up a PT PMA in Indonesia and are ready to hire local talent, you’ll need to know about a few social security obligations.Let’s check them out!

Legal Requirements for PT PMA Hiring in Indonesia

1️⃣ BPJS Kesehatan

BPJS Kesehatan is Indonesia’s national health insurance program, providing employees with medical coverage. Employers must register employees in the BPJS Kesehatan program under Law No. 40 of 2004.

The contributions for BPJS Kesehatan are shared between employers and employees, with the employer responsible for 4% of the employee’s salary and the employee contributing 1%.

How to pay BPJS Kesehatan:

Register Employees
Through the BPJS websiteor by visiting the nearest BPJS office.
Make the Payment: Once you have calculated the total contributions for all employees, you can pay through various methods:
- Bank Payment.
- Electronic Payment.
- ATM Payment.

BPJS Kesehatan contributions must be paid by the 10th of the following month.

2️⃣ BPJS Ketenagakerjaan

Employers must also enrol their employees in the BPJS Ketenagakerjaan program under Law No. 24 of 2011 concerning the Social Security Agency. This covers various aspects of employment security, including work accident insurance, old-age savings, pension programs, and death insurance.

Employers are responsible for withholding the employee contributions from their salaries and remitting both the employer’s and employee’s shares to BPJS Ketenagakerjaan each month. Payments must be made by the 15th of the following month.

Ensuring Control: Maintaining control over critical infrastructure and resources.
Cultural Protection: Safeguarding local culture and media from foreign dominance.
Economic Support: Supporting local businesses and preventing monopolies.
Environmental Management: Managing the environmental impact of certain industries.

What if I employ contract workers? Do I need to pay them too?

Social security contributions for BPJS Ketenagakerjaan and BPJS Kesehatan also apply to contract employees in Indonesia. Employers must comply with these regulations to ensure that all workers receive essential health and employment protections, regardless of their employment status. However, when hiring freelancers, a PT PMA company do not need to pay social security contributions on their behalf because they are responsible for their own enrollment and contributions.

Compliance Tips for PT PMA Hiring in Indonesia

Enrolling employees in social security is a legal obligation for employers and critical to providing a supportive and secure working environment. To avoid penalties or any legal issues, always ensure accurate calculation of contributions, timely payments, and proper reporting.

When PT PMA companies are hiring in Indonesia, understanding the local labor laws is essential. Staying organized and adhering to deadlines can save your company from unnecessary complications. If your PT PMA company don’t have the time to manage them, it’s always best to consult with local experts like Usaha Expat.