Hiring in Indonesia

Hiring your first employee in Indonesia? Recent regulatory focus on upskilling local talent and tighter scrutiny of foreign-worker placements means HR teams must be deliberate — and an Employer of Record (EOR) can be the practical shortcut to compliant hiring. Here’s what an HR practitioner needs to know right now.

Why it matters today?

The government is increasingly emphasizing local workforce development and expects employers to justify foreign hires. That means stronger documentation and closer review during work-permit approvals. Noncompliance attracts fines, back-pay risk and delays that can derail projects.

Practical checklist for hiring a foreign national

• Justification: prepare role-specific reasons why a local candidate cannot fill the position, plus the candidate’s qualifications.

  
  

• Permits: the local sponsor must secure the employment plan (RPTKA) and the work permit (IMTA) before the employee can obtain a limited stay permit (KITAS). These steps require prepared documentation and coordination with authorities.

  
  

• Payroll & taxes: payroll must be in IDR, with correct PPh 21 withholding.

  
  

• Employment contracts: Use compliant contracts (PKWTT or PKWT) in Indonesian and English, clearly defining probation, duties, and termination clauses per updated labour rules.

  
  

• Decide entity vs EOR: If you aren’t ready to establish a local company, use an EOR to onboard immediately and remain compliant.