BPJS Employment becomes mandatory when a foreign-owned company employs workers who are required to participate in Indonesia’s employment social security system. Indonesian employees are covered under employment, while foreign workers become mandatory participants after working in Indonesia for at least six months. Directors and commissioners who receive wages are also included as wage-recipient participants.
When Does BPJS Employment Start for Indonesian Employees?
A foreign-owned PT PMA with no employees does not incur employee BPJS Employment contributions simply because it has been incorporated.
Once the company employs an Indonesian worker, the employer must register itself and the worker in accordance with the applicable participation requirements. The obligation is tied to employment rather than revenue, headcount, or completion of a probation period. Workers serving a probation period are included among wage-recipient participants.
Setting up BPJS Employment? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com
BPJS registration should consequently be incorporated into the company’s payroll setup when employment begins.
When Must Foreign Employees Join BPJS Employment?
A foreign national who has worked in Indonesia for at least six months is included as a wage-recipient participant under BPJS Employment.
The six-month period is the statutory threshold; holding a KITAS alone does not determine when mandatory participation begins. The company’s immigration arrangements for the foreign worker are separate from the BPJS participation threshold.
Do Directors and Commissioners Have to Join?
Directors and commissioners who receive wages are included as Penerima Upah, or wage-recipient participants, under the BPJS Employment framework.
This means a PT PMA should not assume that BPJS Employment only becomes relevant when operational employees are hired. A director or commissioner receiving wages from the Indonesian company can also create a participation obligation.
How Much Does BPJS Employment Cost?
BPJS Employment contributions for wage-recipient workers are divided among several programs:
- Jaminan Kecelakaan Kerja (JKK): 0.24% to 1.74% paid by the employer, depending on occupational risk classification.
- Jaminan Kematian (JKM): 0.30% paid by the employer.
- Jaminan Hari Tua (JHT): 3.7% paid by the employer and 2% by the employee.
- Jaminan Pensiun (JP): 2% paid by the employer and 1% by the employee, subject to the applicable pension contribution wage ceiling.
The employer’s total cost varies according to wages, the employee’s applicable programs, the JKK risk category, and the pension wage ceiling.
For BPJS contribution support, email MAP Resources Indonesia at info@mapresourcesindonesia.com
BPJS Health is a separate social security program with its own contribution rules and should not be included when calculating BPJS Employment contributions.
Does Outsourcing Payroll Transfer the BPJS Obligation?
Using an external provider to process payroll does not transfer the employing company’s BPJS obligations.
Need payroll support? MAP Resources Indonesia can assist at info@mapresourcesindonesia.com
The employer remains responsible for ensuring required workers are registered and that the remuneration reported for BPJS purposes is correct. BPJS Employment requires employers to register workers and report the information used to determine participation and contributions.
What Happens If an Employer Does Not Register?
Employers that fail to comply with mandatory BPJS participation can face administrative sanctions, including written warnings, fines, and restrictions on access to specified public services.
Unpaid contributions may also remain due for periods in which workers should have been enrolled. The consequences should not be described as an automatic suspension of OSS access or work permits, as the sanction depends on the applicable enforcement mechanism and the public service involved.
Manage BPJS Employment Compliance with MAP Resources Indonesia
MAP Resources Indonesia helps foreign-owned companies meet BPJS Employment requirements for their Indonesian payroll. Contact us today at info@mapresourcesindonesia.com.
