Indonesia

Default to PKWTT unless the role is genuinely fixed-term — seasonal work, project-bounded work, or a defined trial. Long-running PKWTs for ongoing roles are increasingly being reclassified.

Two contract types: PKWT (fixed-term) and PKWTT (indefinite). PKWT must be in writing and in Indonesian.

• PKWT maximum 5 years total including extensions
• PKWTT may be oral in theory; in practice always written
• Probation only permitted in PKWTT

Three months is hard-coded. There is no legal mechanism to extend probation, even by mutual agreement.

Maximum 3 months. During probation, either party may terminate without severance. Wages cannot fall below the applicable minimum wage.

Even mutual separations require a written agreement (perjanjian bersama). Verbal agreements are routinely overturned at the industrial relations court.

Termination requires cause and notice. Severance (uang pesangon), service appreciation (uang penghargaan), and rights compensation (uang penggantian hak) all apply per tenure tables.

• Severance: 1 month wage per year up to 9 months (UU 6/2023 schedule)
• Service appreciation: starts at 3 years tenure
• Mutual termination requires a written perjanjian bersama

Always check the provincial (UMP) and city (UMK) figures separately. The city figure can exceed the province.

Set provincially each November, effective January. Jakarta, Surabaya, and Batam typically lead. The 2026 formula ties increases to provincial inflation and growth indices.

Annual leave cannot be cashed out during employment — only on separation.

12 days annual leave after 12 months of service. Maternity leave 3 months (expanded provisions pending). Paternity 2 days. Long service leave 2 months after 6 years.

If you have not reviewed your handbook against the final UU 6/2023 PPs, do it. The outsourcing, severance, and working-hours provisions changed meaningfully.

UU 6/2023 (Job Creation Law) consolidated and amended Manpower Law provisions. Implementing PPs were finalized in early 2026.