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Zantara AI
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Zantara AI
AI Legal Advisor
Bali Zero handles visas, company setup, tax and property compliance in Indonesia. Ask us directly on WhatsApp.
Chat with Bali Zero on WhatsAppTerminating employees in Indonesia (PHK - Pemutusan Hubungan Kerja) requires following specific legal procedures and paying proper severance.
Different types of employment termination
| Feature | Employer-Initiated Company decision | Employee Resignation Voluntary | End of Contract PKWT expiry | Serious Misconduct Immediate dismissal |
|---|---|---|---|---|
| Examples | Redundancy, poor performance | Employee choice | Contract term ends | Theft, violence, fraud |
| Severance | Full or partial | Compensation only | Compensation payment | None (usually) |
| Notice | Required | 30 days typically | Per contract | Not required |
| Process | Formal procedure | Resignation letter | Automatic unless renewed | Investigation required |
Severance in Indonesia typically has three components:
The amount depends on reason for termination and years of service.
Calculate potential severance payment
Estimated total
UP: 5 months × 1, UPMK: 2 months
Rp 123.250.000
| Service Period | Months |
|---|---|
| < 1 year | 1 month |
| 1 to < 2 years | 2 months |
| 2 to < 3 years | 3 months |
| 3 to < 4 years | 4 months |
| 4 to < 5 years | 5 months |
| 5 to < 6 years | 6 months |
| 6 to < 7 years | 7 months |
| 7 to < 8 years | 8 months |
| 8+ years | 9 months |
| Service Period | Months |
|---|---|
| 3 to < 6 years | 2 months |
| 6 to < 9 years | 3 months |
| 9 to < 12 years | 4 months |
| 12 to < 15 years | 5 months |
| 15 to < 18 years | 6 months |
| 18 to < 21 years | 7 months |
| 21 to < 24 years | 8 months |
| 24+ years | 10 months |
Based on termination reason
| Feature | Company Closure | Redundancy | Company Loss (2 years) | Force Majeure | Retirement | Serious Misconduct | Resignation |
|---|---|---|---|---|---|---|---|
| UP | 1× full | 1× full | 0.5× | 0.5× | 1.75× | None | None |
| UPMK | 1× full | 1× full | 1× full | 1× full | 1× full | None | Compensation only |
| UPH | Yes | Yes | Yes | Yes | Yes | Only unused leave | Unused leave |
Steps for legal termination
For performance/conduct issues, use progressive discipline:
After SP3, termination is possible with reduced severance.
Note: For serious misconduct, immediate termination possible without warnings.
For fixed-term contracts (PKWT), upon expiry:
| Contract Length | Compensation |
|---|---|
| Each month of service | 1 day's wages |
| Example: 12 months | 12 days' wages |
| Example: 24 months | 24 days' wages |
If PKWT terminated early by employer: - Must pay remaining contract value - Plus compensation for service period - Unless for serious misconduct
| Document | Purpose |
|---|---|
| Termination letter | Official notice |
| Severance calculation | Detailed breakdown |
| Bipartite minutes | Meeting records |
| Agreement | Mutual consent |
| Receipt | Proof of payment |
| Reference letter | For employee (optional) |
| Mistake | Impact |
|---|---|
| No written warnings | Can't prove cause |
| Skipping bipartite | Process invalid |
| Underpaying severance | Legal claims |
| Immediate termination without grounds | Must reinstate or pay full |
| Not documenting | Weak legal position |
AI-powered answers from our knowledge base
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