04:05 APAC
Asia Briefing from Dezan Shira & Associates
Indonesia BPJS compliance is a prerequisite for legally employing staff in Indonesia, meaning it must be in place before operational hiring begins, rather than being treated as a post-establishment administrative step. Foreign investors must therefore factor BPJS registration into early workforce planning, as employees cannot be placed onto compliant payroll structures without it, directly linking social security registration to the ability to lawfully activate employment. All employers, including foreign-owned PT PMA companies and representative offices, are required to register with BPJS once an employment relationship is established. The obligation is triggered by hiring activity rather than company size or revenue,
meaning compliance applies from market entry. Employment is only considered fully active when payroll processing is aligned with BPJS enrolment, establishing a clear legal threshold for valid hiring in Indonesia. BPJS coverage combines healthcare and employment protection through BPJS Kesehatan and BPJS Ketenagakerjaan, with contribution levels directly impacting total employer cost. BPJS Kesehatan requires a 4 per cent employer contribution and 1 per cent employee contribution, capped at IDR 12,000,000 per month, limiting maximum employer exposure to IDR 480,000 per employee. BPJS Ketenagakerjaan includes workplace accident cover, death
benefits, and pension and housing funds, with several components calculated on capped salary bases. More detailed breakdowns of employer obligations and cost structures are available from Dezan Shira’s ASEAN Briefing . China Enforcement of foreign work permit salary thresholds in China has tightened since early February 2026, with Category A and Category B requirements now applied more consistently across major cities including Beijing and Shanghai. Although these salary-based pathways have long existed in policy, implementation had previously been more flexible.
Recent immigration updates confirm that authorities are re- verifying salary data
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GLOBAL PAYROLL MAGAZINE ISSUE 23
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