Home Blog Payroll Outsourcing: Why It is A Must Do when Running A Business in Indonesia Human Resource | Payroll Payroll Outsourcing: Why It is A Must Do when Running A Business in Indonesia InCorp Editorial Team 10 June 2019 4 minutes reading time Table of Contents Reasons for Payroll Outsourcing in Indonesia Criteria to Choose a Payroll Outsourcing Provider in Indonesia Cekindo as Your Payroll Outsourcing Provider in Indonesia Unless you do payroll outsourcing in Indonesia, payroll is one of the most legally intensive and time-consuming human resource functions that any organization has to deal with on a daily basis. You are not only legally obliged to make sure your employees receive their paychecks on time, you will also need to have a very dedicated and qualified HR to put in all the time and effort every day. Millions of businesses all over the world have outsourced their payroll. Business people have come to realise that such administrative work is a big drain of their time, as the work is only getting more and more complicated by the day. This article elaborates the reasons payroll outsourcing in Indonesia is a must when doing business. You will also know the criteria of choosing a reliable payroll service provider. Reasons for Payroll Outsourcing in Indonesia Here are the main reasons business owners choose to outsource their payroll processing: Cutting Down Costs and Time First of all, you do not need to hire a team of professional human resource personnels who are specialised in tax law, labour law and accounting. Full-time experts in house can add up your overall expenses massively. What is more, payroll requires the latest accounting and payroll software. These software are not cheap. So why not pass these savings from software investments to other core functions at your company? Without a large team of HR and computers with accounting and payroll software that take up a lot of space, you will not need a big office either. With that, you can eventually save on your rent as well, which means significant savings for the long run. Allowing You to Focus on Core Business As a business owner, you should always let the experts do what they do best. So, your company can then do what it does best. By outsourcing payroll processing to a payroll professional, you and your company can finally focus on developing your employees, marketing for sales, and more, to take your business to another successful level. Payroll is a critical function but definitely not a glamourous one. So, right now, save your energy and resources for other key business functions. Only by doing so, your business can grow even more. Complying with Indonesian Laws With so many labour rules, tax laws, rules and regulations, it has become extremely challenging to calculate employees’ exact salary and compensation. Untimely tax reporting and other non-compliances can lead to hefty fines and other serious sanctions. Related article: Payroll Processing and Outsourcing in Indonesia: How It Works Criteria to Choose a Payroll Outsourcing Provider in Indonesia While payroll outsourcing is definitely something you must consider for your business, you need to be aware that not all payroll outsource providers are created equal and will provide you with the best solution. Here are the major characteristics a payroll outsource provider must have: Reliable, trustworthy and secure Experienced with impeccable track records in the industry Comprehensive HR and business consultation offering Possessing the ability and capability to provide legal consultation and solutions for all legal matters Technology readiness such as accounting software, advanced computers and devices Related article: Cost Benefits of Payroll Outsourcing in Indonesia Cekindo as Your Payroll Outsourcing Provider in Indonesia A good payroll provider offers capabilities that deliver peace of mind for you and your business. Cekindo has a team of experienced payroll specialists that are at your service. Through our tailor-made solutions, you will be able to reduce your administrative burdens. Our payroll outsourcing services include monthly payroll calculation, monthly tax calculation and social security payment. Get in touch with us today by filling in the form below or visit our offices in Jakarta, Bali and Semarang. 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 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. What is the Indonesian employment status in PMA company? In Indonesia, employment arrangements are categorized into temporary employment agreements (PKWT) and permanent employment agreements (PKWTT). Temporary contracts are for short-term, seasonal, or experimental work, while permanent contracts are for continuous employment. 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. What non-wage compensation do employers in Indonesia usually provide their employees with? Besides the agreed-upon salary, employers typically offer other compensations such as overtime pay, paid annual leave, festive holiday leave, and insurance. Get in touch with us. 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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. More on Human Resource The Future of Work: Will AI Replace Humans in the Workplace? Read more 10 Reasons Outsourcing Services Will Supercharge Your Manufacturing Growth Read more COVID-19 in Indonesia: Relaxation of BPJS of Employment Contributions Read more