Indonesia Labor Law 2026 | Employer's Complete Guide

Q: What are the maximum working hours in Indonesia?

40 hours per week: either 7 hours/day for 6 days, or 8 hours/day for 5 days. Overtime requires employee consent and is capped at 4 hours/day and 18 hours/week. Overtime pay: 1.5x for first hour, 2x for subsequent hours.

Q: What is THR and when must it be paid?

THR (Tunjangan Hari Raya) is a mandatory religious holiday allowance equal to one month's salary for employees with 12+ months tenure. Must be paid at least 7 days before the employee's religious holiday. Pro-rata for employees with 1-12 months tenure.

Q: What leave entitlements do employees have?

Annual leave: 12 days after 12 months. Sick leave: paid (100% for 4 months, then decreasing). Maternity: 3 months paid. Menstrual leave: 2 days/month. Marriage leave: 3 days. Bereavement: 1-2 days. Religious pilgrimage: once during employment.

Zantara AI

Loading Zantara...

Labor Law in Indonesia 2026: Employer's Guide

Indonesian labor law has specific requirements for employment relationships. Understanding these is essential for compliance.

Employment Contract Types

Contract Types

PKWT vs PKWTT

Feature	PKWTT Permanent/Indefinite	PKWT Fixed-Term/Contract	Freelance Non-employee
Duration	No end date	Max 5 years	Per project
Termination	With cause + severance	At contract end	Per agreement
Probation	Max 3 months	Not allowed	N/A
Best For	Core employees	Project/temporary	Specific tasks

PKWT (Fixed-Term Contract)

PKWT Limitations

PKWT can only be used for:

Temporary work
Seasonal work
One-time projects
Work related to new products/processes (max 2 years)

Cannot be used for:

Permanent positions
Core ongoing operations
Indefinite assignments

Violation: Contract automatically becomes PKWTT (permanent).

PKWT Duration Rules

Rule	Limit
Initial term	Max 5 years (cumulative)
Extensions	Within 5-year limit
No probation	Probation void if written
Compensation	Required upon completion

Working Hours

Standard Working Hours

Schedule	Hours/Day	Days/Week	Total/Week
Option 1	7 hours	6 days	42 hours
Option 2	8 hours	5 days	40 hours

Overtime Rules

Overtime Calculator

Calculate overtime pay

Default Inputs

Monthly Salary (IDR): 10,000,000 IDR
Overtime Hours: 10 hours
Day Type: Regular weekday

Estimated Result

Monthly SalaryRp 10.000.000

Hourly Rate (1/173)Rp 57.803

Overtime HoursRp 10

Overtime PayRp 1.127.168

Estimated total

Weekday: 1.5x first hour, 2x after

Rp 1.127.168

Minimum Wage

Regional Minimum Wage (UMR/UMK)

Province/City	2026 UMR (Approx)
DKI Jakarta	~IDR 5.1M
Bali	~IDR 2.9M
Surabaya	~IDR 4.7M
Bandung	~IDR 4.0M
Semarang	~IDR 3.1M

Minimum Wage Notes

UMR is minimum for permanent employees - Updated annually (usually January)
Sectoral minimums may apply - Components: basic salary can be 75%, allowances 25% - PKWT workers entitled to same minimums

Mandatory Benefits

Required Employee Benefits

0 of 8 completed0/8 required

Leave Entitlements

Annual Leave

Type	Entitlement
Annual leave	12 days/year (after 12 months)
Long leave	2 months after 6 years (some companies)
Religious holiday	As per agreement

Special Leave (Paid)

Event	Days
Marriage	3 days
Child's marriage	2 days
Circumcision	2 days
Baptism	2 days
Spouse/child/parent death	2 days
Other family member death	1 day
Wife giving birth/miscarriage	2 days

Maternity/Paternity

Leave Type	Duration	Pay
Maternity	1.5 months before + 1.5 months after birth	Full pay
Miscarriage	1.5 months	Full pay
Paternity	2 days	Full pay

Employment Contracts

Required Contract Elements

Contract Requirements

0 of 8 completed0/7 required

Company Regulations

When Required

Peraturan Perusahaan

Companies with 10+ employees must have:

PP (Peraturan Perusahaan) - Company regulations

Or with union:

PKB (Perjanjian Kerja Bersama) - Collective bargaining agreement

Must be registered with Manpower office and renewed every 2 years.

Foreign Workers

Foreign Employment Requirements

Requirement	Description
RPTKA	Foreign worker utilization plan
IMTA	Work permit
KITAS	Stay permit
Position	Must be permitted role
Companion	Indonesian understudies

See: KITAS Work Permit Guide

Common Violations

Violation	Risk
No BPJS registration	Fines + back payment
Below minimum wage	Legal action
No written contract	Contract becomes PKWTT
Excessive working hours	Penalties
No THR payment	Legal action
Improper termination	Severance + compensation

Common Questions

Ask Zantara

AI-powered answers from our knowledge base

Labor Law in Indonesia 2026: Employer's Guide

Questions about how this applies to your case?

Labor Law in Indonesia 2026: Employer's Guide

Employment Contract Types

Contract Types

PKWT (Fixed-Term Contract)

PKWT Duration Rules

Working Hours

Standard Working Hours

Overtime Rules

Overtime Calculator

Default Inputs

Estimated Result

Minimum Wage

Regional Minimum Wage (UMR/UMK)

Mandatory Benefits

Required Employee Benefits

Leave Entitlements

Annual Leave

Special Leave (Paid)

Maternity/Paternity

Employment Contracts

Required Contract Elements

Contract Requirements

Company Regulations

When Required

Foreign Workers

Foreign Employment Requirements

Common Violations

Common Questions

Ask Zantara

Related Articles