How Indonesia Payroll Works? – When the company is growing, hiring employees might be needed to streamline the business process. As an employer, knowing how to manage payroll for your employees is important since it isn’t nearly as simple as just paying salaries. In Indonesia, payroll management requires several steps that ensure the calculations comply with government regulations.
All the salary needs to be made in Indonesian Rupiah, even though the employee is a foreigner, but if they are working in the area around Indonesia, they cannot be paid by their currency. Also, inside the Indonesia payroll system, there is a requirement of the employer to pay their BPJS and tax which applicable in the Indonesian Law.
There are several variables that can be included when you determine an employee’s basic salary amount such as education background, competency, company’s ability to pay that amount in the long term. After that comes tax, allowance, bonuses, and other components depending on the company’s policy if those will be inclusive in their salary (gross salary) or exclusive from their salary (net salary).