payroll outsourcing indonesia

Why You Need to Outsource Your Accounting and Payroll

  • InCorp Editorial Team
  • 1 December 2017
  • 3 minute reading time

In the business process, administrative tasks like accounting and payroll will become more complicated as business grows. If you want to avoid the complexity, the most practical solution is payroll outsourcing in Indonesia, and we will tell you while.

Many components make up a business. For it to run like a well-oiled machine, it requires a reliable, scalable system for payroll and accounting. These may be easy if you have very few employees to manage or you operate domestically. This way, you’re familiar with business-related laws such as accounting, taxation, and labour.

But, unless you have no reason to grow your business (which may sound counter-intuitive), you will soon hire more people or expand to other countries such as Indonesia. Here are some of the best reasons.

Why Switch to Payroll Outsourcing in Indonesia

1. Compliance with Indonesian Regulations

Indonesia’s regulations on labour, accounting, auditing, and tax reporting are not easy to understand by foreign companies. It’s not surprising considering they tend to change over time.

Moreover, they involve many formulas. Calculating overtime pay alone can differ per every overtime hour. Minimum wages, meanwhile, can change depending on the GDP growth rate and inflation.

The country uses a progressive rate, but there are exemptions. If the employee earns no more than IDR 54 million (~$4,000) they are exempt from the income tax rates.

While you can always take time to learn, your lack of deep familiarity can put your business in serious jeopardy. At the very least, you will pay fines for late tax reporting. At worst, you may spend some time in jail, have your business license revoked, or your company registration cancelled.

The importance of complying with Indonesian laws is the topmost reason you should consider payroll processing outsourcing in Indonesia. Cekindo has top-notch business consultants and work closely with certified accountants and tax specialists with expert knowledge and years of experience in their fields.

We also have our payroll experts who can take care of every detail pertaining to salaries, including mandatory social security and healthcare contributions, overtime, pension plan, and individual tax returns.

2. Cost Savings

Accounting and payroll outsourcing saves you money in many ways. One, you can now avoid spending cash on hiring and training.

In fact, you don’t have to think about employees at all. That responsibility already lies on us. It is our job to ensure only a professional handles the tasks and that there’s always a person who can do the job at any given time.

You also don’t need to spend on costly accounting and payroll software. There’s no need to rent a bigger office for your team either. (And if you want to save more on rent, check out our serviced and virtual offices in Jakarta and Bali.

3. Better Management

One of the biggest mistakes entrepreneurs, especially start-ups, make is spreading themselves too thin. With so many tasks to take care of, they easily feel the burnout and become less efficient and productive.

Pareto principle suggests 80 percent of the best outcome usually comes from 20 percent effort. Simply put, running your business well is about doing the things that matter the most, and these don’t include routine tasks, which others can do for you.

Related article: 5 Compelling Reasons to Outsource HR in Indonesia

Payroll Made Easy with Cekindo

Outsourcing your payroll and accounting in Indonesiashould not be complicated. Cekindo guarantees fast, convenient, reliable, and transparent PEO outsourcing services for your company.

No hassle and huge savings – these are Cekindo’s commitment. Get in touch with us via the form below.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

Frequent Asked Questions

There are many benefits of payroll outsourcing in Indonesia. However, some of the most noteworthy ones include cost reduction (no need to build an internal team), compliance (Indonesia is well-known for its constantly changing payroll regulations), and core business focus (payroll is a non-revenue-generating task).

Health Insurance and Social Security Insurance (BPJS) are mandatory. The company and the employee, respectively, will bear a certain percentage. Another obligation is tax withholding. The percentage and type of taxes vary from case to case.