8 Payroll Mistakes in Indonesia You May Have been Making over the Years

8 Payroll Mistakes in Indonesia You May Have been Making over the Years

  • InCorp Editorial Team
  • 19 June 2020
  • 4 minute reading time

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 Cekindo

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 Cekindo, 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, Cekindo 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 Cekindo expert today. Fill in 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.

Lead Form

Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.

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

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.

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).