Navigating Payroll and Regulatory Updates
In previous editions of our newsletter, we discussed the role of HR practices in the ESG score and the advantages of HR Shared Services. This newsletter tackles another critical aspect of HR: meeting the standards of Indonesia’s ever-changing regulations regarding payroll, BPJS, and taxes. As a Human Resources Shared Services provider, we understand the complexity and time required to navigate these regulations. This burden can decrease productivity and divert resources from strategic goals. Here’s a quick preview of what you need to watch for in 2024.
Minimum Wage Adjustments
Indonesia revises minimum wage rates based on annual increases. We constantly monitor these provincial changes to ensure our clients comply, protecting workers’ interests and guaranteeing fair compensation.
Social Security and Healthcare
The regulation of social security and healthcare contributions in Indonesia changes dynamically. Edukarir offers up-to-date solutions to meet clients’ unique needs, ensuring accurate BPJS contributions and proper filing.
Tax Regulation Changes
The Directorate General of Taxes in Indonesia has delegated the implementation of the Average Effective Rate (TER) to determine Article 21 Income Tax (PPh) starting January 1, 2024. Our tax team experts work closely with us to adjust our systems whenever necessary, keeping you updated on new tax changes.
Electronic Reporting
The Indonesian government is implementing paperless reporting and documentation for services such as payroll tax, transitioning from physical files. Our services support this transition, allowing you to meet ever-increasing compliance requirements on time.
Employment Law Updates
Labor regulations, such as overtime, holiday entitlements, and working hours, change yearly. Edukarir proposes tailored solutions for different employment environments, ensuring a smooth transition process.
Latest BPJS Update
For example, the latest BPJS update increased the pension fund (BPJS TK) upper limit from IDR 95,596 to 100,423.
Ensuring Compliance for Our Clients
Integration of Payroll, Tax, and BPJS Contributions
Our HR Shared Services can complement payroll processing while accommodating tax computation and BPJS contributions. We adopt a holistic approach to accurately deduct and remit employee health insurance (JKM & BPJS Kesehatan), workplace accident insurance (JKK), and retirement insurance & benefits (JHT & JP). We ensure compliance with the most recent taxation regulations, like the TER (Tarif Efektif Rata-Rata). Our continuously adapted systems and processes guarantee accuracy in salary calculations and deductions, as well as reporting.
Proactive Communication
We proactively inform our customers about regulatory changes, enabling them to understand the impacts and make the right decisions.
Compliance Expertise
Our team possesses comprehensive knowledge of payroll and law in Indonesia. We observe regulatory changes and participate in industry seminars to stay on the cutting edge.
Benefits of Staying Compliant
Maintaining compliance offers several benefits for both businesses and employees:
- Reduced Risk of Penalties: Avoid hefty fines and penalties associated with non-compliance.
- Improved Employee Relations: Employees appreciate when companies prioritize accurate social security contributions and tax obligations.
- Enhanced Brand Reputation: Demonstrating strong business ethics positively impacts your ESG rating.
