I. Salary Standards
In 2025, the minimum wage in Jakarta, the capital of Indonesia, will be 5,396,761 Indonesian rupiah, which is approximately 2,370 yuan.
The minimum wage standards vary in different regions based on their economic development conditions. For instance, the minimum wage in Central Java Province is marked as 2,169,348 Indonesian rupiah, which is approximately 950 yuan.
The average minimum wage in all regions of Indonesia will increase by 6.5% in 2025
II. Types of Labor Contracts
Fixed-term contract: It is prohibited to set a probation period. The term is 1 to 5 years, and the total cumulative contract duration shall not exceed 5 years.
Open-ended contract: The probation period is up to 3 months. During the probation period, both parties may terminate the contract by giving 7 days’ notice without compensation.
III. Working Hours and Overtime System
Standard working hours: The legal standard working hours are 40 hours per week. Enterprises can flexibly choose the working mode of “work six days and rest one” (7 hours a day) or “work five days and rest two” (8 hours a day).
Overtime regulations
According to the law, employees are not allowed to work overtime for more than 4 hours a day, and the upper limit of cumulative overtime per week is 18 hours.
Overtime pay calculation (hourly wage =1/173× fixed salary) :
IV. Social Insurance (BPJS)
Social security benefits in Indonesia are divided into two major categories: employment insurance (BPJS employment) and healthcare insurance (BPJS Healthcare), which cover various aspects of employees’ pensions, medical care, retirement, death, work-related injuries, etc.
Employment insurance takes effect in the month of employment, while medical insurance takes effect in the following month.
V. Holidays and Benefits
Annual leave: At least 12 days are available upon one year of service. Any unused days can be extended to the following year through negotiation. Unused annual leave at the time of resignation shall be paid at 100% of the daily wage.
Sick leave
Maternity leave: Female employees are entitled to 3 months of paid leave (1.5 months each before and after childbirth), with 100% salary paid.
Vi. Compensation for Contract Termination
Fixed-term contract: Termination must be notified one month in advance. Compensation shall be given for the remaining contract period salary plus one month’s salary for each full year of service.
Open-ended contractVII. Individual Income Tax Calculation
Threshold: For single employees, the tax-exempt amount for annual income (i.e., the threshold) is 54,000,000 Indonesian rupiah.
Pre-tax deduction: 4.5 million Indonesian rupiah per dependent per month.
Formula: Taxable income = Total income – Employee social security contributions – Threshold – Deductions – Exemptions
VIII. Other compulsory benefits
Indonesian law stipulates that employers are required to provide Religious holiday subsidies (THR) to their employees.
THR is a mandatory benefit that employers must provide to all employees. Employees can only be eligible for THR benefits if they have been employed for at least 30 years before the payment date.
THR is generally one month’s salary and is paid before either Eid al-Fitr or Christmas, depending on the employee’s religious belief. If the employee has worked for less than one year at the time of distribution, the actual working time will be converted.
Settle in the Wanxinda Industrial Park of the Batang National Economic Special Zone in Indonesia
For Chinese enterprises, especially small and medium-sized ones, seeking cost advantages, policy support and mature industrial facilities, Central Java is undoubtedly an ideal investment destination. And how to seize this historical opportunity quickly and with low risk?
The Wanxinda Industrial Park in the Batang National Economic Zone of Indonesia is the answer we have provided.
As the largest economy in ASEAN, Indonesia is providing a “zero-delay” production start-up solution for its manufacturing industry with a combination of national-level special economic zones and spot standardized factories.
1. Tariff breakthrough
Relying on the Indonesia-ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP), enjoy zero-tariff export treatment for 90% of goods within the region.
2. Cost-locked win
Tax policies: Enterprises in special economic zones enjoy 15 years of corporate income tax reduction and exemption (exemption for the first 5 years and halving for the following 10 years), and all tariffs on imported equipment in bonded zones are waived.
Labor costs: The proportion of workers under the age of 25 is 38%, and the average monthly salary in the manufacturing industry is only one third of that in China.
Energy security: The electricity price is approximately 0.5 RMB, with a peak price of 0.75 RMB.
Employee social security: The medical insurance premium is paid by both the enterprise and the employee at 1% of the salary, the endowment insurance is paid by the enterprise at 8.4% of the salary, and the work-related injury insurance is paid by the enterprise at 0.24% of the salary. (Less than 10% in total
3. Spot goods get a head start
1 million square meters of high-standard factory buildings in Batang Special Economic Zone, Central Java Province, are available for immediate use.
Complete supporting facilities
Close to the expressway
Green and energy-saving factory building
“One-stop” service
At this moment, what is scarcer than “cost depressions” is the resource of “strategic springboards”.
Please contact the Wanxinda investment promotion team immediately to obtain a customized implementation plan – starting when others are hesitant is the true dimension reduction competition!
The bilingual (Chinese and English) specialist of the Management Committee of the Special Economic Zone in Central Java Province, Indonesia, responds 24/7
