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Working hours in Indonesia: what foreign business needs to know!

David Lang
Founder & CEO, Viettonkin; FDI and Fortune 500 Consultant
Trường (David) Lăng, Founder & CEO of Viettonkin, is a distinguished FDI advisor and Fortune 500 consultant, spearheading thousands of successful investment projects to connect ASEAN economies with the world.
Trường (David) Lăng, Founder & CEO of Viettonkin, is a distinguished FDI advisor and Fortune 500 consultant, spearheading thousands of successful investment projects to connect ASEAN economies with the world.
Labor Laws All Business Owners Should Know About labor laws

Important Labor Laws in Indonesia: What you need to know!

Knowing labor laws in Indonesia is important before establishing a business in Indonesia. A comprehensive understanding of existing labor laws is important as any non-compliance will lead to problems with authorities. In this article, we will give you the guidelines for the crucial regulations regarding labor law for the employer.

What is the working hour in Indonesia?

Regarding work hours, all employees must only spend 40 hours working in a week. For six workdays, it is divided into seven hours per day. For five workdays, it is eight hours per day.

What are the regulations for overtime work?

Employers are obliged to pay overtime fees if the employees are required to work over the time limit specified by labor laws. The overtime can only be performed if there’s an agreement between both parties; employer and employee. The maximum time of overtime work is three hours a day, or 14 hours a week, not including the overtime during public holidays or weekends.
The calculations for overtime fee are as follows:

Hours in a day Workweek Weekend & Public Holidays
5-Days Workweek 6-Days Workweek
1st hour 1,5x - -
1st 5-hour - - 2x
1st 8-hour - 2x -
Each hour later 2x 3x 3x
7th & 8th hour - - 4x
10th & 11th hour - 4x -

How to determine the employee’s salary?

If the salary component consists of a basic salary and fixed allowance, the amount of minimal basic salary is 75% of the total basic salary and fixed allowance. Each provincial-level government annually issues a minimum wage that is applicable in the province. This is one of the most important things that you have to know. Minimum wage refers to the lowest monthly wage consisting of basic wage including fixed allowance. The employer is prohibited to pay lower wages than the Provincial Minimum Wage. Jakarta has a high minimum wage compared to other smaller cities.

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About the Author
David Lang
Founder & CEO, Viettonkin; FDI and Fortune 500 Consultant
Trường (David) Lăng, as Founder and CEO of Viettonkin, dedicates his extensive expertise to fostering robust trade and investment bridges between Southeast Asia and global partners. With over 17 years of experience, he has successfully guided over 3,000 FDI projects and advised Fortune Global 500 corporations on complex market entry and expansion strategies. His impactful work includes providing technical assistance to governments, developing innovative initiatives like Viettonkin's 'FDI Desks,' and maintaining strategic relationships with central authorities and NGOs. David's thought leadership in economic development and policy advocacy empowers businesses worldwide to confidently navigate and thrive in emerging markets.

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