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Payroll taxes in Indonesia.

Learn about payroll taxes in Indonesia thanks to Horizons’ up-to-date guide.

Horizons is where real, local hiring expertise meets world-class customer service. Quickly and compliantly hire employees in more than 150 countries worldwide, without the need to open a local entity.

What is the average employer tax rate in Indonesia?

The usual corporate tax rate in Indonesia is 22%, but this can vary by industry and depending on specific circumstances.

What is the average employee tax rate in Indonesia?

Indonesia has a progressive income tax system. The rates are:

  • 0 to 60 million IDR → 5% 
  • 60 to 250 million IDR → 15%
  • 250 to 500 million IDR → 25% 
  • 500 million to 5 billion IDR → 30% 
  • Above 5 billion IDR → 35% 

Employer contributions in Indonesia

Employers must contribute between 10.24% and 11.74% of employee salaries toward the country’s social security scheme.

Employee contributions in Indonesia

Employees in Indonesia must contribute toward old age savings, healthcare insurance, and pension. Contributions total 4% of salary.

Frequently asked questions (FAQ):

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.

  • Employer social security contributions: 31.42% of employee salary
  • Corporate tax rate of 20.6%

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:

  • 0 to 60 million IDR → 5% 
  • 60 to 250 million IDR → 15%
  • 250 to 500 million IDR → 25% 
  • 500 million to 5 billion IDR → 30% 
  • Above 5 billion IDR → 35% 

For employers in Indonesia, tax includes the following:

  • Social security (between 10.24% – 11.74% of employee salary)
  • Corporate income tax rate of 22%

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