Employer of Record (EOR) in Indonesia
Native Teams allows global businesses to tap into Indonesia’s talent pool without establishing a legal entity in the country. If you’re a solo professional, you can also get benefits that are typically associated with traditional employment.
How does an EOR in Indonesia work?
Partnering with an EOR provider like Native Teams enables businesses to expand internationally without needing to navigate complex legal frameworks or establish a local entity. The EOR manages administrative tasks such as payroll, contracts, onboarding, and legal compliance, while businesses maintain day-to-day control over their employees.
For freelancers, remote workers, and digital nomads, an EOR provides formal employment status while preserving work flexibility, offering access to traditional employment benefits like health insurance, pension plans, and legal contracts.
Who can use EOR Services in Indonesia?
Businesses and solo professionals who work on the global scene can benefit from EOR services in Indonesia.
Businesses
Companies of any size, from small startups to large multinational corporations, can benefit from EOR services in Indonesia. These services are especially useful for businesses expanding into Indonesia without the need to set up a legal entity. EOR providers enable companies to hire local employees, manage payroll, and comply with Indonesian labour regulations.
Individuals
Freelancers, remote workers, and consultants seeking the benefits of traditional employment in Indonesia can also use EOR services. An EOR helps individuals secure legal employment status, ensuring compliance with tax, social security, and other legal obligations.
Features of Native Teams EOR Services in Indonesia
Employment status
Native Teams' EOR services help freelancers establish their legal employment status no matter where they live and work. Employers can also hire, onboard, and pay their global teams compliantly.
HR administration and documentation
All HR tasks are automated, and essential documents are available with a single click via the Native Teams dashboard.
Global payroll
With a payroll calculator covering over 70 countries, both freelancers and employers can easily manage salaries, taxes, and deductions, all in one platform.
Benefits
Freelancers enjoy flexible work with traditional perks, while employers can offer benefits to attract top talent.
What legal requirements exist for employment in Indonesia
Employment contracts
Employers must provide written employment contracts that outline the terms and conditions of employment, including job duties, working hours, salary, benefits, and termination conditions. Contracts should be in Indonesian. If a bilingual contract is used, the Indonesian version prevails in case of discrepancies.
Work permits and visa
Foreign employees must obtain a work permit (IMTA) and a limited stay visa (KITAS). Indonesian nationals aren’t required to have special permits but must be registered with the relevant authorities.
Social security and insurance
Employers must register employees for the National Social Security (BPJS Ketenagakerjaan) program, which covers work accident insurance, old-age savings, pension benefits, and death benefits. They must also register employees for the National Health Insurance (BPJS Kesehatan) program.
Minimum wage and working hours
Employers must comply with the provincial minimum wage standard and the standard working hours. The typical working hours are 40 hours per week, either as 7 hours per day for 6 days a week or 8 hours per day for 5 days a week.
Taxation
Employers are responsible for withholding income tax (PPh 21) from employees' salaries and remitting it to the tax authorities. Employees must be registered for tax purposes and obtain a Tax Identification Number (NPWP).
Health and safety at work
Employers must comply with occupational health and safety regulations to ensure a safe working environment. They also must provide necessary safety training and equipment to employees.
Please note that all these requirements may vary depending on the job type, the employer and individual circumstances.
Explore Indonesia’s labour laws with our guide.
Why Choose Native Teams as your Indonesia Employer of Record?
With legal entities spread across 70+ countries, Native Teams is your go-to platform for ensuring compliance when working globally. We provide everything you need to scale and improve — from compliant employment contracts, work permits and visa services to managing social contributions and taxes. Let us handle the paperwork while you focus on improving your craft.
What is an Employer of Record?
An Employer of Record (EOR) is a third-party entity that legally employs workers on behalf of another company. It handles tasks such as payroll, taxes, benefits, and legal compliance with local labour laws. EOR services can also help freelancers and remote workers formalise their employment status and manage administrative responsibilities.
What are the costs of using an Employer of Record in Indonesia?
EOR costs in Indonesia vary based on provider, employee count, and services needed. Native Teams offers affordable options, starting at €79 per employee per month for businesses and €49 for individuals.
What is the difference between PEO and EOR?
An EOR fully assumes legal employment responsibilities, including payroll, taxes, and compliance. PEOs, however, operate under a co-employment model where the client retains legal employer status and shares responsibilities. EORs are ideal for companies expanding into new regions, while PEOs are useful for businesses with an existing legal presence looking to streamline HR processes.
What are the responsibilities of an Employer of Record (EOR) service provider?
An EOR service provider acts as the legal employer, ensuring labour law compliance and managing payroll, benefits, and employment contracts. They handle onboarding, offboarding, and administrative tasks, allowing businesses to focus on day-to-day operations while minimising legal risks.
Is using an Employer of Record in Indonesia legal?
Yes, using an EOR in Indonesia is completely legal and operates within the country's labour laws. Many international companies utilise EOR services to hire employees in Indonesia, while freelancers use them to secure formal employment.
Why should I use EOR instead of opening my own company or an office in Indonesia?
An EOR allows you to bypass the complex process of establishing a legal entity in Indonesia. It handles all legal responsibilities, including payroll and compliance, so you can start operations quickly. Additionally, it provides flexibility to scale your business without the burden of setting up or closing a legal entity.
How many people can I employ in Indonesia?
There are no legal restrictions on the number of employees you can hire in Indonesia as long as you comply with labour laws. Whether through an EOR or your own company, the number of employees you can manage depends on your business capacity and resources.