HR Consulting & Payroll Outsourcing
Why should I engage Cedar to assist with Payroll?
Cedar's payroll outsourcing services will ensure that clients can count on accuracy, security and privacy as key aspects of payroll, as well as getting access to our technology and expertise in manpower compliance matters.
Our Services cover:
Payroll Calculation
Monthly payroll calculation including bonuses, allowances, overtime, employee income tax, social security contributions, and take-home pay
Bank Integration
Produce bank file and provision of client account for take-home pay
E-Payslips
Produce and distribution of e-Payslips
Monthly Reports
Produce monthly reports including salary report, tax report, and reimbursement report, etc.
Tax Administration
Administration and payment of employee income tax and social security
Annual Reports
Annual employee income tax report and tax slip
What are the services covered in Cedar HR Consulting Management?
Our team assists clients in ensuring compliance with laws, regulations, policies, and procedures governing employee management. This includes various legal requirements pertaining to recruitment, employment practices, workplace safety, compensation, benefits, and employee rights. Upholding ethical standards and mitigating legal risks are integral aspects of this service.
Our Services cover:
Employee Handbook and WLKP
We specialize in designing Employee Handbooks that integrate HR best practices and align with your business environment. These handbooks serve as legal evidence that your company's policies adhere to employment laws, thus mitigating employer risk.
Advisory and Consulting
We provide tailored support and professional recommendations on compliance and HR best practices, aligned with relevant local employment laws.
Frequently Asked Questions
What is WLKP?
WLKP (Wajib Lapor Ketenagakerjaan Perusahaan) is one of the employment services on the kemnaker.go.id portal related to company information. According to UU No. 7 Year 1981, every company has an obligation to report in writing when establishing, stopping, re-operating, transferring or dissolving a company and renew it annually to the Minister of Manpower or an appointed official. WLKP itself must contain information such as company identity, employment relations, labor protection, and employment opportunities. By registering the Company through WLKP, they will automatically be registered in the Ministry of Manpower database which will later be used by the government to provide better services related to employment.
In the regulation, it has been explained that the sanction of imprisonment is at maximum of 3 months or a maximum fine of Rp. 1,000,000 if the company does not carry out its obligations to report company data, either after its establishment or an annual extension. The report must be submitted no later than 30 days. WLKP is also mandatory if the company wants to apply for a permit to use foreign workers.
What is BPJS?
BPJS is an abbreviation of Badan Penyelenggara Jaminan Sosial, which is a special institution tasked with administering Indonesia’s social security. This program was started in 2014 under UU No. 24 Year 2011. All Indonesian citizens are required to participate in the BPJS program. This includes foreigners and workers who are domiciled in Indonesia for at least 6 months and pay dues.
This institution provides two types of programs, which are BPJS Ketenagakerjaan (Employment Program) and BPJS Kesehatan (National Health Program). BPJS Ketenagakerjaan consists of Accident at Work Security (JKK), Death/Funeral Security (JKM), Old Age Saving (JHT), Pension Plan (JP), and Unemployment Insurance (JKP) which is applicable to employees. Meanwhile, BPJS Kesehatan covers the National Health Insurance (JKN) program which provides comprehensive medical services through step-by-step referrals according to the patient’s medical indications. JKN is intended to cover all Indonesians and foreign residents of Indonesia (i.e. not only employees).
What is THR in Indonesia?
Religious Holiday Allowance or commonly called THR is one of the efforts to meet the needs of workers and their families in celebrating Religious Holidays where the government requires employers to provide THR to their workers. THR is worker’s income rights that must be paid by employers to workers ahead of Religious Holidays in the form of money.
Religious holidays here are Eid al-Fitr for Muslim workers, Christmas Day for Catholic and Protestant Christians, Nyepi Day for Hindu workers, Vesak Day for Buddhist workers, and Chinese New Year for Confucian workers. The THR regulation is explained in more detail in Minister of Manpower Reg. No. 6 of Year 2016.
Can a PMA company employ expatriates in Indonesia?
PMA companies can employ expatriates (TKA/Tenaga Kerja Asing) in Indonesia. Companies need to have a Permit to Use Foreign Workers (IMTA), which is a license that must be owned for every foreign worker employed by business activities in the context of investment by PMA/PMDN who use labor in their activities. IMTA is valid for a period of 1 (one) year and can be extended further.
The IMTA application procedure is submitted by investors for each foreign worker employed to the Director for Controlling the Use of Foreign Workers (Ditjen P2TKA), the Directorate General of Manpower Placement Guidance at the Ministry of Manpower and Transmigration through the service counters available at the P2TKA Directorate or at BKPM.
How is Personal Income Tax implemented?
An individual’s income is subject to 5% to 35% of progressive income tax rates.
Expatriate workers need to know that personal income tax (PIT) in Indonesia is determined through a self-assessment scheme.
The country has adopted a worldwide income taxation system, meaning that individuals considered as Indonesian tax residents must pay tax to the government on the income they earned in Indonesia, and also on income they earned from abroad, unless there is an applicable double tax agreement.
Non-resident taxpayers will only be liable to pay PIT for income they earn in Indonesia, unless the country in which they are a tax resident has an applicable tax treaty with Indonesia. In these cases, the taxpayer might not pay any tax in Indonesia or pay a reduced amount.
Given these tax treatments, it is important for expatriate workers to understand their tax liabilities in Indonesia. It is advisable to use the services of registered local tax advisors to help determine which tax law regime will be applicable along with any exemptions that may bring.