Home Blog 8 Payroll Mistakes in Indonesia You May Have been Making over the Years Human Resource | Indonesia | Payroll 8 Payroll Mistakes in Indonesia You May Have been Making over the Years InCorp Editorial Team 28 May 2025 4 minutes reading time Table of Contents 8 Common Payroll Mistakes in Indonesia The Solution: Indonesia’s Payroll Outsourcing Payroll Outsourcing in Indonesia with InCorp Though mundane, payroll is the foundation of your workforce efficiency. It can also be one of the most challenging human resource (HR) functions to manage for many companies in Indonesia. While many employees are eagerly waiting for the payday to arrive, payroll is what makes in-house HR personnel feel discouraged in so many ways. Furthermore, payroll functions can turn into a disaster for organisations if it is done incorrectly such as wrong payroll calculations and failure of doing proper tax reporting. Businesses can suffer tremendously from legal complications and employee’s dissatisfaction with ineffective payroll handling. The vast majority of companies commit to all sorts of big and small payroll mistakes. Don’t be surprised that you may be making one or many of the same mistakes over the years without realising them. In this article, we are going to show you the 8 payroll mistakes and how payroll outsourcing can help you take care of them. 8 Common Payroll Mistakes in Indonesia 1.Wrong Classification One of the most common payroll mistakes is the misclassification of employees. An employee classification determines their tax responsibilities in Indonesia. 2. Inadequate Record Keeping You must have proper payroll record-keeping for a certain period under the Indonesian Law. You may encounter issues if you do not have the documents that authorities ask for during an audit. 3. Missed Deadlines When your company grows, payroll functions can become more complex. Thus, your employees may not be able to cope and miss the deadlines, resulting in legal penalties. 4. Inaccurate Payroll Taxes Payroll taxes deducted from employee’s salaries require accurate calculation. In-house HR teams that are not experienced may do it wrongly. 5.Complications due to Multiple Locations If your business has several locations, it becomes extremely difficult for your employees to keep up. They may not be aware of the latest legal updates as each location has its own set of rules. 6.Time Attendance Miscalculation You need to keep track of employee’s time attendance to calculate their payroll accurately as well. Since time ticket entries calculation is a tedious task and takes a lot of precious time, incorrect entries are very common, leading to wrong salary calculation. 7. No Appropriate Backup and Security Many companies do not back up their data and purchase security software to safeguard their payroll information. Therefore, their payroll system is prone to hacks and may lose their data permanently. 8. Heavy Reliance on Technology Companies tend to rely heavily on payroll software due to technological advancement. However, at the end of the day, you need a professional to validate if the data inputs are correct. Otherwise, you will have to spend more effort to correct it in the system no matter how advanced your technology is. The Solution: Indonesia’s Payroll Outsourcing To avoid making these payroll mistakes, you can rely on experts who always keep themselves updated with Indonesia’s payroll rules and regulations. Not to mention, they have the most advanced accounting software and technology, which you don’t have to fork out money to purchase yourself. You can thus ensure greater payroll accuracy and security with full compliance from payroll outsourcing providers in Indonesia. Considering the following benefits below, you will find that payroll outsourcing can be a good fit for your organisation: Improve data security, avoid data leaks, hacks and attacks Save time and money with professional assistance and advice Access the latest payroll technology and software Forgo a full-time payroll team Mitigate mistakes and legal risks, avoid severe penalties Payroll Outsourcing in Indonesia with InCorp For many business owners, they see payroll as a non-core activity. However, they also understand that effective payroll management is of critical importance to any organisations, and payroll outsourcing is the key. At InCorp, we see payroll outsourcing in Indonesia as our core business. We want to effectively transform your business processes and help you save time and money. Regardless of your business structure and company size, InCorp provides end-to-end payroll outsourcing services in Indonesia that are comprehensively customised to your business needs. If you are looking for a reputable Indonesia’s payroll outsourcing provider that is reputable, experienced, and genuinely understands the importance of payroll, speak to your InCorp expert today. Fill in the form below. Read Full Bio Verified by Heldy Narua Senior External Finance Manager at InCorp Indonesia Heldy, with seven years of experience, leads InCorp Indonesia's External Finance team, specializing in reliable Payroll Outsourcing and Finance Management solutions. She has an Accounting and Business Administration degree from Sampoerna University and Oregon State University. She is certified with Brevet AB, highlighting her technical expertise and commitment to client success. Frequently Asked Questions What are the obligations related to payroll? Health Insurance and Social Security Insurance (BPJS) are mandatory. The company and the employee will bear a certain percentage, respectively. Another obligation is tax withholding. The percentage and type of taxes vary from case to case. Contact us to get information on your specific field. How many employment and hiring options exist in Indonesia? According to Indonesia’s Manpower Law, employers can hire Indonesian talents under temporary or permanent employment. How does the HR outsourcing mechanism work? As your HR outsourcing provider, InCorp signs a standard employment agreement with an outsourced employee. After this, we take care of the employee’s payroll in coordination with your company. InCorp is also responsible for paying the salary to the employee. How does InCorp’s recruitment outsourcing mechanism work? As a professional executive search agent, InCorp helps promote job vacancies, screen, and shortlist applicants, conduct pre-interviews, and arrange final interviews with applicants. This can also be topped up with an employee background check. Get in touch with us. 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