🅿️ Thinking about hiring staff for your business or household in Bali? 🤔 Whether it’s for a café, a villa, or a personal assistant, many foreigners rush into it without understanding local rules—and that’s where things go wrong fast. From visa issues to contract disputes, one wrong step can lead to fines or even deportation notices.
🅰️ It may seem simple at first—just post a job and find someone good. 🧾⚠️ But Indonesia has strict labor laws, and hiring someone without proper documents or contracts can quickly turn into a legal mess. Many foreigners don’t realize that even hiring a part-time cleaner requires official registration, written agreements, and tax compliance.
🆂 The solution? Learn the right steps to legally hire employees in Indonesia. ✅ This includes how to choose between PKWT and PKWTT contracts, register for BPJS (social and health insurance), and understand your obligations as an employer under Indonesian labor law. With the right guidance, you can hire confidently without breaking the rules.
🆃 “When we first opened our small guesthouse, we didn’t know we needed to register every staff member,” 💬 says Emma, an expat in Canggu. “Legal Indonesia helped us fix our contracts, handle BPJS, and even avoided a potential fine. Now we hire properly—and sleep better at night.”
🅴 One foreign company in Ubud unknowingly hired five locals without BPJS registration. 🧑⚖️ Months later, they were reported, fined, and required to pay back contributions. All of it could have been avoided with a few simple steps taken at the beginning.
🅰 Before hiring anyone in Bali—whether Indonesian or foreign—get familiar with local laws and document requirements. 🤝📄 If you need support drafting employment contracts, setting up BPJS, or navigating foreign worker permits, our legal team is ready to help. Let’s make hiring smooth, legal, and stress-free.
Table of Contents
- How to Legally Hire Staff in Bali Without Getting Fined ⚠️
- The Right Way to Write Employment Contracts in Indonesia 📝
- What You Must Know About BPJS and Employee Registration 🏥
- Hiring Foreign Employees in Bali: What’s Actually Allowed 🌍
- How to Set Fair Salaries and Comply with Local Standards 💰
- Working Hours, Leave, and Overtime Rules in Indonesia ⏰
- Dismissal Rules: How to Avoid Legal Trouble with Staff ⚖️
- FAQs About Hiring, Contracts, and Labor Law in Bali❓
How to Legally Hire Staff in Bali Without Getting Fined ⚠️
Hiring employees in Bali sounds simple, but there are legal rules you need to follow. Whether you’re opening a café, villa, or yoga studio, hiring the wrong way can lead to heavy fines or even deportation.
Start by posting job ads on trusted platforms like JobStreet, LinkedIn, or local Facebook groups. University job fairs are also great for finding junior staff.
If you’re short on time, recruitment agencies can help—but they usually charge 10–30% of the annual salary. Just remember, all staff must be officially documented!
The Right Way to Write Employment Contracts in Indonesia 📝
Once you’ve found the right person, don’t skip the contract! Indonesia has two main types: PKWT (fixed-term) and PKWTT (permanent).
PKWT is great for seasonal or short-term jobs but has limits. PKWTT is for long-term staff. If you’re hiring with a trial period, it must be written in the contract—otherwise, it doesn’t count.
During probation (up to 3 months), you can end the contract if things don’t work out. Be sure to include salary, duties, working hours, and social contributions in writing.
What You Must Know About BPJS and Employee Registration 🏥
Every employee—local or foreign—must be registered with BPJS Ketenagakerjaan (for work accidents and retirement) and BPJS Kesehatan (for health).
This is proof the person is officially hired. Even part-timers or probation workers may require registration, depending on the agreement. If you’re caught with unregistered staff, the fines and legal trouble can be serious.
Setting up BPJS is a bit tricky, so consider using a local HR consultant to stay compliant.
Hiring Foreign Employees in Bali: What’s Actually Allowed 🌍
Hiring foreigners in Indonesia is possible, but complicated. You must prove the position needs a foreign expert, then get government approval through an RPTKA (workforce plan).
After that, you need an IMTA (work permit) and a KITAS (residence permit). Foreigners can’t just be hired for any role—they’re only allowed in specific, higher-level positions.
Plus, you must train local staff alongside them to transfer knowledge. And don’t forget: foreigners also need to be registered in BPJS!
How to Set Fair Salaries and Comply with Local Standards 💰
Paying fair wages is not just about being kind—it’s the law. Each region in Indonesia has a set minimum wage, and Bali is no exception.
You must pay your workers at least this amount. Besides the basic salary, you need to provide a THR (13th-month bonus) before major holidays like Idul Fitri.
Some regions also require extra allowances. Make sure you pay monthly and document everything. This keeps your workers happy and your business safe from legal problems.
Working Hours, Leave, and Overtime Rules in Indonesia ⏰
A full-time workweek in Indonesia is 40 hours, usually spread over five 8-hour days. Workers are entitled to a 1-hour lunch break after 4 hours of work.
If you need staff to work longer, be careful—overtime pay applies: 1.5x for the first 2 extra hours, then 2x after that.
Workers get 12 days of paid leave per year after one year of service. Maternity, paternity, and sick leave are also protected by law. Respecting these rules keeps morale high and avoids labor disputes.
Dismissal Rules: How to Avoid Legal Trouble with Staff ⚖️
Firing someone in Bali isn’t as easy as saying “you’re fired.” If you dismiss someone without cause, you may owe them severance.
The amount depends on how long they’ve worked with you. Employees must give 30 days’ notice if they resign, and you must also give proper notice unless it’s a serious offense.
Probation dismissals can happen quicker, but they must still be documented. Also, if you fire a foreign worker, you must report it to immigration.
FAQs About Hiring, Contracts, and Labor Law in Bali❓
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Can I hire someone on a handshake deal?
No. Always use a written contract to protect yourself and the worker.
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Do I have to register temporary workers with BPJS?
Yes, in most cases. Better safe than sorry.
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What if my foreign hire doesn’t have a KITAS yet?
They cannot legally work until the KITAS is issued.
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Is there a grace period for registering new employees?
It should be done immediately after the contract is signed.
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Can I pay below the minimum wage if the worker agrees?
No. It’s illegal even if the employee agrees.
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What’s the punishment for illegal employment?
Fines, deportation of foreigners, and even business closure.
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Do I need to offer paid leave right away?
Paid annual leave starts after 12 months, but sick and maternity leave rights start immediately.
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How long is a probation period?
Up to 3 months by law, and it must be written in the contract.
