Indonesia is one of the largest emerging markets in the world. As a regional economic powerhouse, it has increasingly attractive options for foreign professionals looking to work abroad. Cities all over this country are growing steadily and enjoying a growing economy and a fruitful job market. Since this trend isn’t just limited to the capital, it’s worth exploring the entire country to find the best employment opportunity for you. Whether you are an expat living and working in Indonesia, or preparing for your big move, it’s important to know about the employment of foreigners in this country. The Indonesian Rupiah (Rp) is the currency of Indonesia, and it equals 0.000071 US dollars (USD)
What is the average salary in Indonesia? People working in Indonesia make an average gross salary of $13,436 a year, $1,120/month, and $6.46 an hour. These numbers differ between cities, industries, and job titles. The highest salaries are found in the cities of Jakarta, Surabaya, Bandung, Medan, and Tangerang at $15,324, $15,060, $14,797, $14,532, and $14,310.
As in most countries, the process of finding employment in Indonesia is not a straightforward one. It filled with complex issues related to work visas, labor laws, bureaucracy, and regulations that change from time to time. Although finding a job in this country might be a challenge, it’s not impossible. All you need is effort, persistence, the right set of skills, good academic credits, as well as strong English and/or Indonesian language skills. Even with a population of over 260 million, Indonesia’s unemployment rate is currently at 5.28%. This is a good indicator for those working or planning to work here. As an expat myself, I understand how difficult and stressful it can be to move abroad. That’s why I’ve created this guide to offer as much information as possible to ensure your transition into the Indonesian job market goes smoothly. Without further delay, let’s dive right in:
Average Salary in Indonesia
If you’re looking to join the Indonesian job market, it would be best to look at average salaries for a specific job rather than the national average. Here are some common professions to get you started:
|Job title||Average annual salary|
|Human resource manager||$19,136|
The job market
A much larger labor force was originally employed in the agricultural sector. While it remains strong, accounting for about 40% of the labor force market, Indonesia has moved towards industrialization. Its rich supply of natural resources has attracted foreigners with skills in mining and construction sectors. However, the most important sector and the largest employer of the Indonesian economy is the service sector. There are plenty of job opportunities for those who want to teach English or take up positions in the tourism and humanitarian sectors. It’s also worth noting that Indonesia’s tech, e-commerce, and start-up sectors are increasingly becoming vibrant.
Finding a job in Indonesia
A majority of expats in Indonesia are employed by foreign companies or work in the export sector. The easiest way of finding such jobs is through an internal transfer within a company from your home country. This process makes it easier to obtain a work permit and transition into the new job market. Alternatively, you can directly contact Indonesian companies that offer employment in your industry. Several reputable job sites can be useful in finding work in Indonesia before relocating. Some of them include Monster, Job Street, Job DB, and Workster.
There are also opportunities for those who are qualified in TEFL (teaching English as a foreign language) or ESL (English as a second language).
As mentioned earlier, it’s not easy for foreigners to find employment in Indonesia. Government policies dictate that foreign nationals employed in this country must be experts in their field. Employers must also prove that no locals are willing and capable of filling the position. Certain sectors completely restrict the employment of foreigners. All this bureaucracy makes employers reluctant to hire foreigners. This policy pretty much excludes the young, adventuring expatriates with little or no experience from getting a job. As such, they often work as English teachers.
The work culture
With a population of over 260 million and over 300 different languages and ethnicities, the work culture in Indonesia is extremely diverse and varies depending on where you live. But as a general rule, you’ll have a 42-hour workweek, overtime must not exceed 14hrs/week, at least 12 days of annual leave, old-age benefits, and health insurance, just to name a few.
Women get 2-days menstruation leave per month, 3-month maternity leave, and 1.5-month miscarriage leave (with a doctor’s note).
Indonesia Average Household Income
The median annual household income in Indonesia was surveyed in 2015 and the value was $3,488. It was, however, predicted to increase to $5,966 by 2017. An increase in household income is one of the economic prosperity indicators. With the current positive trend of the Indonesian economy, it’s safe to say that salaries have been on the rise. This is particularly true for the middle class, which has, in turn, qualified Indonesia as a middle-income country. The rise of the middle class has led to the rise in consumer expenditure as most of them spend increasingly on discretionary goods.
Minimum Wage in Indonesia
Indonesia is one of the many countries with a statutory minimum wage to ensure decent living for its residents. The minimum wage is generally set by the Governor of each province. This is usually done annually per the national government’s wage policy and following recommendations from the District and/or Provincial Wage Councils. Some of the factors that determine the minimum wage rate include inflation rate, corporate capability, per capita income, level of economic development, conditions of the labor market, and cost of living among other things.
While some provinces have set a basic minimum wage that applies to all sectors, others have sectoral minimum wages for manufacturing, forestry, mining, agriculture, and so on. Sectoral minimum wages are based on agreements between worker federations and corporate organizations.
Indonesia currently has 34 provinces. Here’s a look at the minimum wages per month in some of them:
- Banten – 2,267,965 IDR ($162)
- DKI Jakarta – 3,940,973 IDR ($281)
- Jawa Barat – 1,668,372 ($119)
- Bali – 2,297,968 ($164)
- Papua – 3,128,170 ($223)
- DI Yogyakarta – 1,570,922 ($112)
- Lampung – 2,240,646 ($160)
- Jambi – 2,423,889 ($173)
These minimum wages increased by roughly 8.03% from last year’s figures, and are set to increase by another 8.51% in 2020 to cover the projected inflation and economic growth.
Minimum wage can also be set by collective agreements between employers and employees, so long as it’s not less than what’s determined by the Governor.
Note that minimum wage applies only to single workers and those who have been working for less than a year. In that regard, wages for married employees and those with more than one year of service are determined by a collective agreement between them or their union, and the relevant company management.
Average Salary in Jakarta
Jakarta is the capital and largest city of Indonesia. It’s the country’s commercial center, financial hub, as well as home to many important industries. It’s also the largest export center in the country. In fact, the Port of Jakarta is the largest seaport in the country and also one of the largest in the entire Java Sea basin. All this makes Jakarta the most likely place for foreigners and locals to find employment. If you’re thinking of working in Indonesia and aren’t sure where to begin, perhaps this would be a good place to start.
But before that, let’s find out how much you can make. First off, salaries in Jakarta are 14% more than those of Indonesia. The average gross salary in Jakarta is $15,323.86 a year, $1,277 per month, and $7.37 an hour. These numbers differ slightly between industries and the job title, so you might want to check out the specific salary of a particular job. 2019 salaries are about 2% higher than those of 2018, and the trend doesn’t show any signs of slowing down in the coming years.
Foreigners looking for employment in this city will have more luck in the service sector, especially in the financial, trading, and banking industries. Another area that offers lots of employment opportunities in the industrial sector, which includes automotive, biomedical, mechanical engineering, chemical, and electronics industries. Most of these industries are expanding, meaning job opportunities will be available even in the future.
Finding employment in Jakarta
The easiest way to find employment in this city is through intra-company transfers. If that proves difficult, you should consider moving to Indonesia to teach English, which is currently in great demand.
Cost of living in Indonesia
If you decide to work in Indonesia, you have to consider the cost of living as well. The cost of living in this country differs greatly between urban and rural areas, but it’s generally lower than most Western and European countries. Still, you need to see the facts before deciding to move here, considering cheap or expensive is subjective.
The cost of renting depends on the neighborhood and the type of housing. Expect a one-bedroom apartment in the city center to cost an average of $260/month. Those with a lower budget can find the same apartment outside of the city center for about $145/month. Larger apartments for families cost twice as much or even more. If you want to buy a house, keep in mind that foreigners in Indonesia are only permitted to buy property under the “Right to Use” (Hak Pakai) title. It also remains nearly impossible for expatriates to obtain a local mortgage. Even if you do, foreigners get high mortgage rates on local credit.
Housing constitutes the biggest share of monthly expenses. Once that is sorted, other expenses tend to follow suit. That being said, the other expenses you’ll need to budget for include transportation, food, personal care, utilities, entertainment, health insurance, etc.
For a single expatriate, a monthly salary of around $356 should be enough to stay in a single room (preferably close to your work) cook meals at home and occasionally eat in a traditional place. A family, on the other hand, needs a monthly salary of about $1,400-$1,600 to live comfortably.
About the author: Marta Kovachek is the author of this article. She graduated from the University of Chicago with a master’s degree in Economics. Marta enjoys writing about the current economic situation and loves helping our readers to find their next "destination". From places to live to complex social and economic topics, we always enjoy Marta's work. Please contact us in case of any questions.