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Work visas, permits and paying your taxes

The visa and permit situation in Indonesia is complex, and getting it wrong threatens your employment.

Try to make sure your company handles all the permits and paperwork possible. Working in Indonesia is a legal minefield and you should do everything you can to make sure you are protected under the law. Labour laws in Indonesia will apply to you while working here.  These may be subject to change at short notice.

You must carry identification at all times (your passport will do, but also a resident's permit if you are residing there for some time). Keep copies of all your permits, visas, passports, and other immigration documents at home and at work, as there are occasional ‘sweeps’ to find illegal workers.

Business hours are set slightly earlier than in the West.  It is normal to work 8am to 4pm Monday to Friday, although many places also work on Saturday mornings.  Employees usually have an hour for lunch, except on Fridays when people usually take from 11.30am to 1.30pm for Friday prayers.

There are thirteen national holidays and many people take a day of their annual leave at the same time to create a longer four-day weekend. Many of the holidays are variable year-to-year as they are based on other calendars. There are also many commemorative days on which businesses do not close.

Everyone (including foreign nationals) must register with their local Tax Office, receive a personal tax number, and pay income tax. Your personal tax number is called the NPWP (Nomor Pokok Wajib Pajak) and may be required for activities such as opening a bank account.

The rate of income tax starts at 5% and rises to 30% depending on income, and is calculated based on worldwide income.

Taxable income (tax rate):

  • Rupiah (Rp) 1-50 million (5%)
  • Between Rp 50-250 million (15%)
  • Between Rp 250-500 million (25%)
  • Over Rp 500 million (30%)

Your employer will probably calculate and pay your income tax directly from your salary, but you are legally responsible for your tax and will need to send in an annual tax return. Be sure to get receipts and evidence that your tax has been paid, and be sure that your deductibles and taxable benefits have been taken into account. It is advisable to take specialist advice, especially if you have any employees of your own, such as maids or drivers.  Many international accounting firms will have staff in Indonesia who can assist.

Speaking (or at least trying to speak) Bahasa Indonesia (the official Indonesian language) is likely to be helpful and respectful to your Indonesian colleagues; it would benefit you to take a course upon or before arrival.  Most Indonesians speak another language such as Javanese as their first language, but Bahasa Indonesian is the primary language for business, education, administration, and the media, and is spoken by nearly every Indonesian. Equally, it is important to speak English clearly, slowly, and without too much slang or idiom.  Coarse language is very likely to offend.

You may be given a nickname or Indonesian name when you arrive, if your full name is hard for Indonesians to pronounce.   This is not intended as a sign of disrespect but friendliness. If you need to go to a meeting on another island, it is usually possible to fly there. There are 100 airports in Indonesia and flying is often the easiest way to get around.  However, you will need an Indonesian credit card to book a domestic flight online, so be prepared to ask a colleague to book for you or just show up at the counter on the day.  

If you are working as an EFL teacher, your students are likely to be polite and motivated.  They are also likely to know some English as English is part of the national curriculum.  A reputable employer will likely arrange a room in a shared house with other teachers and paid Indonesian staff.  You will normally be teaching at the end of the student’s school day or the adult’s workday, and will probably spend 20 to 25 hours a week teaching. Jobs in Bali are very competitive so you may need to work elsewhere in Indonesia first before securing a job there.

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