Hiring staff for a villa or a company in Bali: contracts, payments, fines (2026)

AB
Andrei Balinsky
Founder of Balinsky
Published 12 October 2026
Indonesia's labour rules changed a lot after the 2020 reform (the job creation law, now No. 6/2023). Many tips online refer to repealed articles. Here is what applies now.‌‍​‍‌⁠‍​​⁠‍‍​‍⁠⁠‌‍‌‌‌‍⁠‍​‍⁠⁠‌‍‍⁠‌‍⁠‍‌‍⁠⁠‌⁠‌⁠‌‍⁠​‌‍‌‌‌‍‌​‌‍‌⁠‌‍‌‌​‍⁠⁠‌‍‍​‌‍‍‌‌⁠​‍‌‍‍‌‌‍⁠‍‌‍‌⁠​‍⁠‌‌⁠​⁠‌⁠‌​‌‍​‌‌‍‌‍‌‍‌‍​‍⁠‌‌‍​‍‌‍​‌‌‍⁠​‌‍‍‌​‍⁠‌‌‍​⁠‌‍⁠⁠‌‍⁠‍‌⁠‌​‌⁠​‍‌‍​‌‌‍​⁠‌⁠‌​‌⁠​⁠​‍⁠‌‌⁠​​‌‍​‌‌⁠‍‌‌‍⁠‌‌‍‌‌‌‍⁠‍‌⁠‌​‌⁠​⁠​‍⁠‌​⁠​‍​⁠​​​⁠​‍​⁠‌‍

Fixed-term contract

  • In writing and in Indonesian only.
  • Term - up to 5 years in total, including extensions.
  • When the term ends, the employee receives compensation: one month's salary per 12 months of work, pro rata for a shorter period.
  • If the employer terminates the contract early on its own initiative, it pays the salary for the remaining term.
  • Severance pay and the long-service bonus do not apply to a fixed-term contract. They are due only to employees on a permanent contract.
  • Foreigners are not entitled to compensation under a fixed-term contract.
  • The law treats an oral fixed-term contract as permanent. And dismissing a permanent employee costs more.‌‍​‍‌⁠‍​​⁠‍‍​‍⁠⁠‌‍‌‌‌‍⁠‍​‍⁠⁠‌‍‍⁠‌‍⁠‍‌‍⁠⁠‌⁠‌⁠‌‍⁠​‌‍‌‌‌‍‌​‌‍‌⁠‌‍‌‌​‍⁠⁠‌‍‍​‌‍‍‌‌⁠​‍‌‍‍‌‌‍⁠‍‌‍‌⁠​‍⁠‌‌⁠​⁠‌⁠‌​‌‍​‌‌‍‌‍‌‍‌‍​‍⁠‌‌‍​‍‌‍​‌‌‍⁠​‌‍‍‌​‍⁠‌‌‍​⁠‌‍⁠⁠‌‍⁠‍‌⁠‌​‌⁠​‍‌‍​‌‌‍​⁠‌⁠‌​‌⁠​⁠​‍⁠‌‌⁠​​‌‍​‌‌⁠‍‌‌‍⁠‌‌‍‌‌‌‍⁠‍‌⁠‌​‌⁠​⁠​‍⁠‌​⁠​‍​⁠​​​⁠​‍​⁠‌‍

Permanent contract

  • It can be concluded orally, but then the employee is given a letter of appointment.
  • On dismissal, severance pay and a long-service bonus are due. The amount depends on the reason for dismissal (Government Regulation No. 35/2021).
  • You cannot dismiss someone for illness if it lasts less than 12 months in a row.
  • You can dismiss for absence if the employee has not shown up for 5 days in a row without explanation and has received two written summonses.‌‍​‍‌⁠‍​​⁠‍‍​‍⁠⁠‌‍‌‌‌‍⁠‍​‍⁠⁠‌‍‍⁠‌‍⁠‍‌‍⁠⁠‌⁠‌⁠‌‍⁠​‌‍‌‌‌‍‌​‌‍‌⁠‌‍‌‌​‍⁠⁠‌‍‍​‌‍‍‌‌⁠​‍‌‍‍‌‌‍⁠‍‌‍‌⁠​‍⁠‌‌⁠​⁠‌⁠‌​‌‍​‌‌‍‌‍‌‍‌‍​‍⁠‌‌‍​‍‌‍​‌‌‍⁠​‌‍‍‌​‍⁠‌‌‍​⁠‌‍⁠⁠‌‍⁠‍‌⁠‌​‌⁠​‍‌‍​‌‌‍​⁠‌⁠‌​‌⁠​⁠​‍⁠‌‌⁠​​‌‍​‌‌⁠‍‌‌‍⁠‌‌‍‌‌‌‍⁠‍‌⁠‌​‌⁠​⁠​‍⁠‌​⁠​‍​⁠​​​⁠​‍​⁠‌‍

Mandatory payments

  • The holiday allowance (THR) - no later than 7 days before the employee's religious holiday. It is due after 1 month of service, pro rata. Late payment - a 5% fine. There are no exceptions by religion.
  • Service charge in a hotel or restaurant: 3% for possible losses, 2% for training, 95% - to staff.
  • BPJS social insurance is mandatory. Non-payment - up to 8 years in prison or a fine of up to 1 billion rupiah.‌‍​‍‌⁠‍​​⁠‍‍​‍⁠⁠‌‍‌‌‌‍⁠‍​‍⁠⁠‌‍‍⁠‌‍⁠‍‌‍⁠⁠‌⁠‌⁠‌‍⁠​‌‍‌‌‌‍‌​‌‍‌⁠‌‍‌‌​‍⁠⁠‌‍‍​‌‍‍‌‌⁠​‍‌‍‍‌‌‍⁠‍‌‍‌⁠​‍⁠‌‌⁠​⁠‌⁠‌​‌‍​‌‌‍‌‍‌‍‌‍​‍⁠‌‌‍​‍‌‍​‌‌‍⁠​‌‍‍‌​‍⁠‌‌‍​⁠‌‍⁠⁠‌‍⁠‍‌⁠‌​‌⁠​‍‌‍​‌‌‍​⁠‌⁠‌​‌⁠​⁠​‍⁠‌‌⁠​​‌‍​‌‌⁠‍‌‌‍⁠‌‌‍‌‌‌‍⁠‍‌⁠‌​‌⁠​⁠​‍⁠‌​⁠​‍​⁠​​​⁠​‍​⁠‌‍

Working hours

40 hours a week. Overtime - up to 4 hours a day and up to 18 hours a week. Annual leave - 12 days a year.‌‍​‍‌⁠‍​​⁠‍‍​‍⁠⁠‌‍‌‌‌‍⁠‍​‍⁠⁠‌‍‍⁠‌‍⁠‍‌‍⁠⁠‌⁠‌⁠‌‍⁠​‌‍‌‌‌‍‌​‌‍‌⁠‌‍‌‌​‍⁠⁠‌‍‍​‌‍‍‌‌⁠​‍‌‍‍‌‌‍⁠‍‌‍‌⁠​‍⁠‌‌⁠​⁠‌⁠‌​‌‍​‌‌‍‌‍‌‍‌‍​‍⁠‌‌‍​‍‌‍​‌‌‍⁠​‌‍‍‌​‍⁠‌‌‍​⁠‌‍⁠⁠‌‍⁠‍‌⁠‌​‌⁠​‍‌‍​‌‌‍​⁠‌⁠‌​‌⁠​⁠​‍⁠‌‌⁠​​‌‍​‌‌⁠‍‌‌‍⁠‌‌‍‌‌‌‍⁠‍‌⁠‌​‌⁠​⁠​‍⁠‌​⁠​‍​⁠​​​⁠​‍​⁠‌‍

A foreign employee

  • You need a foreign worker hiring plan (RPTKA) and a work KITAS. The fee is $100 a month.
  • For the employer, a foreigner without a permit means 1 to 4 years and/or a fine of 100 to 400 million rupiah.
  • For the foreigner: up to 5 years or up to 500 million rupiah, plus deportation.
  • The C18 visa for a future employee: 90 days without extension, once per company (since 14.06.2025).‌‍​‍‌⁠‍​​⁠‍‍​‍⁠⁠‌‍‌‌‌‍⁠‍​‍⁠⁠‌‍‍⁠‌‍⁠‍‌‍⁠⁠‌⁠‌⁠‌‍⁠​‌‍‌‌‌‍‌​‌‍‌⁠‌‍‌‌​‍⁠⁠‌‍‍​‌‍‍‌‌⁠​‍‌‍‍‌‌‍⁠‍‌‍‌⁠​‍⁠‌‌⁠​⁠‌⁠‌​‌‍​‌‌‍‌‍‌‍‌‍​‍⁠‌‌‍​‍‌‍​‌‌‍⁠​‌‍‍‌​‍⁠‌‌‍​⁠‌‍⁠⁠‌‍⁠‍‌⁠‌​‌⁠​‍‌‍​‌‌‍​⁠‌⁠‌​‌⁠​⁠​‍⁠‌‌⁠​​‌‍​‌‌⁠‍‌‌‍⁠‌‌‍‌‌‌‍⁠‍‌⁠‌​‌⁠​⁠​‍⁠‌​⁠​‍​⁠​​​⁠​‍​⁠‌‍

What may change

In 2024, the Constitutional Court ordered a new labour law to be adopted within two years. Keep an eye on changes.‌‍​‍‌⁠‍​​⁠‍‍​‍⁠⁠‌‍‌‌‌‍⁠‍​‍⁠⁠‌‍‍⁠‌‍⁠‍‌‍⁠⁠‌⁠‌⁠‌‍⁠​‌‍‌‌‌‍‌​‌‍‌⁠‌‍‌‌​‍⁠⁠‌‍‍​‌‍‍‌‌⁠​‍‌‍‍‌‌‍⁠‍‌‍‌⁠​‍⁠‌‌⁠​⁠‌⁠‌​‌‍​‌‌‍‌‍‌‍‌‍​‍⁠‌‌‍​‍‌‍​‌‌‍⁠​‌‍‍‌​‍⁠‌‌‍​⁠‌‍⁠⁠‌‍⁠‍‌⁠‌​‌⁠​‍‌‍​‌‌‍​⁠‌⁠‌​‌⁠​⁠​‍⁠‌‌⁠​​‌‍​‌‌⁠‍‌‌‍⁠‌‌‍‌‌‌‍⁠‍‌⁠‌​‌⁠​⁠​‍⁠‌​⁠​‍​⁠​​​⁠​‍​⁠‌‍

Editorial note

Balinsky editorial team · 12 October 2026. The text has been checked against Indonesian laws in force on this date. Update: reviews contained repealed rules: a fixed-term contract of "maximum 2 years plus 1", dismissal under Articles 158 and 161, severance pay under a fixed-term contract, a 15% housing allowance. In one review, the penalty for employing a foreigner without a permit was understated many times over. Materials the article is based on: https://t.me/BaliLawyer/46, https://t.me/BaliLawyer/47, https://t.me/BaliLawyer/48, https://t.me/BaliLawyer/49, https://t.me/BaliLawyer/50, https://t.me/BaliLawyer/54, https://t.me/BaliLawyer/102, https://t.me/BaliLawyer/107, https://t.me/BaliLawyer/127, https://t.me/BaliLawyer/146, https://t.me/BaliLawyer/184‌‍​‍‌⁠‍​​⁠‍‍​‍⁠⁠‌‍‌‌‌‍⁠‍​‍⁠⁠‌‍‍⁠‌‍⁠‍‌‍⁠⁠‌⁠‌⁠‌‍⁠​‌‍‌‌‌‍‌​‌‍‌⁠‌‍‌‌​‍⁠⁠‌‍‍​‌‍‍‌‌⁠​‍‌‍‍‌‌‍⁠‍‌‍‌⁠​‍⁠‌‌⁠​⁠‌⁠‌​‌‍​‌‌‍‌‍‌‍‌‍​‍⁠‌‌‍​‍‌‍​‌‌‍⁠​‌‍‍‌​‍⁠‌‌‍​⁠‌‍⁠⁠‌‍⁠‍‌⁠‌​‌⁠​‍‌‍​‌‌‍​⁠‌⁠‌​‌⁠​⁠​‍⁠‌‌⁠​​‌‍​‌‌⁠‍‌‌‍⁠‌‌‍‌‌‌‍⁠‍‌⁠‌​‌⁠​⁠​‍⁠‌​⁠​‍​⁠​​​⁠​‍​⁠‌‍

Sources

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