In general, all employees in Indonesia, including expatriates who work for a minimum of six months in the country, must participate in and make contributions to the National Social Security System (Sistem Jaminan Sosial Nasional or "SJSN"), which is administered by the Social Security Administration Board (Badan Penyelenggara Jaminan Sosial or "BPJS").
The BPJS has two main agencies: BPJS Health (BPJS Kesehatan), which manages health security, and BPJS Employment (BPJS Ketenagakerjaan), which handles work accident, death, old age, pension and unemployment security.
Employers and employees are required to make monthly contributions to these programs, as a percentage of the employee's regular monthly salary/wages. These contributions are subject to modification by the Government of Indonesia (GOI) from time to time.
The following is a summary of the mandatory contributions in 2022:
|
Type of Social Security |
Contribution (as a % of regular monthly salary/wages) |
Remark |
|
|
Borne by employer |
Borne by employee |
||
|
Health Security |
4% |
1% |
Up to a maximum monthly salary of IDR 12 million as determined by Presidential Regulation No. 64 of 2020. An employee's monthly salary includes wages plus all fixed employment benefits. |
|
Work Accident Security (Jaminan Kecelakaan Kerja or "JKK") |
|
Employees do not make payments to JKK |
No maximum monthly salary applies. |
|
Death Security (Jaminan Kematian or "JKM") |
0.30% |
Employees do not make payments to JKM |
No maximum monthly salary applies. |
|
Old Age Security (Jaminan Hari Tua or "JHT") |
3.7% |
2% |
No maximum monthly salary applies. |
|
Pension Security (Jaminan Pensiun or "JP"): |
2% |
1% |
Up to a maximum monthly salary of IDR 9,077,600 as determined by the BPJS, effective as of March 1, 2022. The retirement / pension age is 58 starting January 1, 2022.
No rule on whether expatriates must participate in this program. |
|
Unemployment Security (Jaminan Kehilangan Pekerjaan or "JKP") |
Employers do not make payments to JKP |
Employees do not make payments to JKP |
0.46% of the employee's monthly salary paid by the GOI, as regulated by Government Regulation No. 37 of 2021. Up to a maximum monthly salary of IDR 5 million. No rule on whether expatriates must participate in this program. |
Key Takeaways
Changes to the Pension Security program were introduced in early 2022. The retirement age was raised to 58 years beginning January 1, 2022. And, effective as of March 1, 2022, BPJS Employment has determined that the maximum monthly salary for calculating Pension Security mandatory contributions is IDR 9,077,600.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
