Editor’s Note:
Domestic workers in Indonesia are generally considered part of the informal workforce, and employment practices can vary significantly from one household to another. Salary levels, benefits, leave arrangements, severance payments, and other employment conditions are often determined through mutual agreement between the employer and employee. This article is intended as practical guidance for expatriate employers and should not be considered legal advice. Readers are encouraged to verify current regulations and seek professional advice when necessary.
Although the employment laws in Indonesia are specific for the formal workforce, most household staff are considered part of the informal workforce and therefore the regulations are often not as clear. Often finer details of the employment contracts, if it is even deemed necessary, may be left to the discretion of the employer.
It is because of unstated assumptions that we suggest that you have a written agreement with your employee to reduce the possibility of misunderstanding due to language barriers as well as for your protection should you need proof of what you agreed on at a later date in the employment period.
Minimum Wage Guidelines
Many expatriates ask whether household staff must be paid the local minimum wage. While minimum wage regulations are clearly defined for employees in the formal sector, most domestic workers such as housekeepers, nannies, cooks and gardeners are generally considered part of Indonesia’s informal workforce. As a result, minimum wage regulations are often used as a guideline rather than a strict legal requirement for household employment.
Salary levels are typically determined through mutual agreement between the employer and employee and can vary significantly depending on the employee’s experience, responsibilities, English language ability, working hours, and whether they live in or out.
Many Indonesian families do not necessarily pay the local minimum wage. It is common for employers to consider accommodation, utilities, meals, laundry facilities and other benefits provided to live-in staff as part of the overall compensation package.
For reference, the approximate provincial minimum wages for 2026 are:
- Jakarta (DKI Jakarta): Rp 5.69 million per month
- Surabaya (East Java Province): Rp 2.3 million per month
- Bandung (West Java Province): Rp 2.2 million per month
- Denpasar (Bali Province): Rp 2.9 million per month
These figures are subject to periodic government revisions and should only be used as a general guideline when determining compensation.
Compensation Benefits – that may be paid in addition to base salary, or included in the base salary
Food Allowance
In addition to salary some employers provide a food allowance, or will provide basic food items such as rice, sugar, tea, coffee and oil and supplement it with the food allowance. Some employers may choose to simply work this into the salary, so that the staff is responsible for their own food purchases. This method seems to work with fewer headaches and misunderstandings.
Some employees make a distinction between “food allowance” and salary so in the case of termination the severance pay would be less as they would not have to include the food allowance.
Transportation
Transportation expenses for live-out staff may be given in addition to the salary. The average given depends on distance, type of transportation and how many transfers the employee has to take to and from your home.
Medical
Some employers choose to have their staff get a medical checkup before they start work, or in the first weeks.
It is common practice for the employer to reimburse the costs incurred by domestic workers for the Indonesian National Social Health Insurance, BPJS. Should your employee have family or dependents, you should let him or her know whether or not you are prepared to cover family members’ insurance costs. Domestic workers can be asked to show proof of their payment to BPJS for themselves and their family members before reimbursements are made.
Further reimbursements for doctors or medicine are strictly up to you.
Some employers also choose to contribute to BPJS Ketenagakerjaan, which provides workplace accident coverage, death benefits and old-age savings. While not mandatory in all situations, it is becoming increasingly common among expatriate employers.
Trial / Probation Period
If you choose to do so, let the potential employee know that he or she would initially work for a trial period of time, normally one or two months, after which both parties may decide if the arrangement is working out.
Pay Periods
Staff are usually paid every two weeks. But once a month is accepted as well. Make sure arrangements are agreed upon and understood by both parties.
Some staff prefer not to take their salary (or their full salary) until they want to go home to their village for the holiday period, so they are not tempted to spend their salary.
Overtime
If an employee works past normal hours, for example during a dinner party, paying overtime wages would be customary. This is also true for Indonesian official public holidays.
If a staff member chooses to work during a public holiday, he or she should be compensated for this.
Vacation
Unlike employees in the formal sector, annual leave arrangements for domestic workers are generally based on mutual agreement between employer and employee. Many employers provide between 12 and 14 days of paid annual leave per year in addition to public holidays and time off during the Lebaran period.
Staff normally want to take this vacation over the Lebaran holiday period (see below). The timing and scheduling of this and any other vacation period that you choose to offer also depends upon your own personal schedule and needs, so this should be discussed and mutually agreed upon as well.
This is especially important if Lebaran is just a few months away, even though they haven’t been working for you for a year, they will still expect to take vacation over the holidays. The amount that is paid may be pro-rated from the total time taken.
Living Arrangements
Decide which staff, if any, will live in or out. If live in, what kind of arrangements will you have for them? Will they share a room or have a private room?
Health Checks
If you would like the employee to have a health checkup, this will be the responsibility of the employer to pay for it. In most cases this is probably not necessary unless you suspect there might be a health issue or if the person will be working in close proximity to your young children.
If a health examination is requested, it should be conducted respectfully and with the employee’s consent. Any medical information obtained should remain confidential. A general medical examination may be appropriate when staff will be responsible for food preparation, childcare or elder care.
Uniforms
Some employers choose to provide either a uniform or a work clothing allowance for employees, with perhaps the exception of night guards. They can be purchased ready-made or you may also choose to have them custom made.
It is recommended that uniforms be provided only after the trial period. Ask your staff member what type of clothing they feel more comfortable wearing. Not all people are comfortable wearing uniforms.
Loans
Loaning money to staff is NOT recommended. Should you decide to do so it is advised that you loan money:
- only after staff has worked satisfactorily for you for at least 6 months.
- that no more than 1 month’s base salary be loaned at a time.
- that an agreed payback schedule is worked out in writing.
- that any previous loans have been repaid in full.
Many long-term household staff will eventually request financial assistance for family emergencies, school fees, weddings, medical expenses or home improvements. Employers should establish clear policies early in the employment relationship regarding loans and salary advances to avoid misunderstandings.
Some employers have a policy that they will never loan more money than the amount that would be payable as severance. In this way, if the employee leaves unexpectedly or is unable to repay the loan, the employer is not left significantly out of pocket.
Annual Salary Reviews
Indonesia experiences regular inflation and rising living costs. Many employers review household staff salaries annually, often around January when new provincial minimum wage figures are announced.
Salary increases typically depend on performance, length of service, additional responsibilities and increases in the cost of living. Annual increases of between 5% and 10% are common for valued long-term employees, although practices vary considerably.
Mobile Phones and Communication
Most household staff own mobile phones and use WhatsApp as their primary form of communication. Employers should establish expectations regarding mobile phone use during working hours, particularly when staff are responsible for childcare, driving or food preparation.
Clear communication of expectations can help avoid misunderstandings while still respecting the employee’s need to communicate with family members.
Lebaran/THR Bonus
It is a government regulation that all employers give a one month’s salary bonus to household staff after one year’s employment. This bonus is referred to as THR (Tunjangan Hari Raya). If your staff has been working for less than 12 months the bonus is pro-rated.
This bonus is given to staff, at the latest, two weeks before Lebaran/Idul Fitri (or Christmas if they are Christian) to be used for expenses relating to the holiday.
The amount should be paid based on the employee’s salary and not include discretionary gifts or allowances unless otherwise agreed. If your company employs your household staff, the employing company is required to pay the THR.
Undoubtedly an additional amount paid by the family/user that the staff work for is also appreciated. This additional gift to help them celebrate the holidays goes a long way towards building goodwill.
Many domestic helpers choose this time to return to their villages to celebrate the holiday with family. The bonus is very important, as most Indonesians are not able to accumulate significant savings and they use the bonus to cover holiday shopping and transportation home.
In the case of employing a Christian household employee, you would compensate at the time of the Christmas holidays, Hindu employees at Nyepi, and Chinese-descent employees at Chinese New Year. But, to be sure, ask them when they would like to receive their 13th month bonus.
Household Utensils
You might consider supplying the entire staff with their own eating, drinking and cooking utensils, as well as linens. This helps ensure the health and well-being of the entire household.
Incidentals
Some expatriate employers choose to provide toiletries or used clothing for their household staff.
Starting Date
If all goes well, everyone should agree upon the starting date.
Severance Pay
Because domestic workers generally fall within the informal employment sector, severance arrangements are often based on custom, fairness and mutual agreement rather than strict labor law provisions.
Many employers choose to provide an end-of-service payment when employment ends, particularly for long-serving staff. A commonly used guideline is one month’s salary for each completed year of service, although arrangements vary widely.
The terms of any severance payment should ideally be discussed and documented at the beginning of employment.
