Learn about payroll taxes in Indonesia thanks to Horizons’ up-to-date guide.
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The usual corporate tax rate in Indonesia is 22%, but this can vary by industry and depending on specific circumstances.
Indonesia has a progressive income tax system. The rates are:
Employers must contribute between 10.24% and 11.74% of employee salaries toward the country’s social security scheme.
Employees in Indonesia must contribute toward old age savings, healthcare insurance, and pension. Contributions total 4% of salary.
The tax office of Indonesia is called The Directorate General of Taxes (Indonesian: Direktorat Jenderal Pajak). It is also known as the DJP.
There is no employer payroll tax contribution (as seen in the US) in Indonesia. Employers are responsible for paying some amount toward social security, normally between 10.24% – 11.74% of employee salary.
For employees, Indonesia has a progressive payroll tax system with tax rates between 5% for the lowest earners to 35% for the highest earners in Indonesia. See the tax brackets below:
For employers in Indonesia, tax includes the following:
Your business can easily hire employees in Indonesia without opening a local entity.
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