Summary
Indonesia does not have a comprehensive social security system. Rather, it has a programme which covers retirement benefits, accident protection, healthcare and unemployment insurance. It is aimed primarily at providing protection for the lowest earners in Indonesian society.
Details
Contributions
The overall rate of contributions is approximately 11% for employers and 4% for employees. Income caps apply at a low level (approx. $1000 per month) to health and pension contributions. The pension element of contributions (2% employer, 1% employee) is not mandatory for expatriates.
Treaties
Indonesia has a limited range of social security agreement, primarily with other ASEAN nations. Practically, inbound expatriates and their employees will not be protected from having to pay Indonesian contributions by virtue of these agreements, which may lead to a double contributions, particularly for those assignees from the US and the UK.
Exemptions
Given the comparatively low rate of contributions, the expatriate exemption from pension contributions, and the income cap, there is little incentive to seek exemptions from Indonesian social security.
Administration
Monthly payroll withholding of social security contributions is operated by Indonesian businesses; In addition to this, there is quarterly and annual reporting.
Benefits
While expatriate contributions to the core elements of the social security scheme do in principle generate benefit rights, many benefits are means tested and therefore not payable to more highly paid individuals, and in practice foreigners rarely make benefits claims in any event.
Social security insights are intended to provide quick and straightforward insights into social security regimes. Always seek professional advice based on actual circumstances before acting.
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