BPJS Ketenagakerjaan (Badan Penyelenggara Jaminan Sosial Ketenagakerjaan) is Indonesia's worker social security program. It is mandatory for all employers and provides comprehensive protection including work accident coverage, death benefits, old-age savings, pension plans, and since 2021, job loss insurance. The program is managed by a government agency and funded through employer and employee contributions.
The Four Main Programs
- JKK (Jaminan Kecelakaan Kerja): Work accident insurance covering medical costs and lost income from workplace injuries
- JKM (Jaminan Kematian): Death benefit providing compensation to families when workers die
- JHT (Jaminan Hari Tua): Old age savings program that workers can access at retirement or termination
- JP (Jaminan Pensiun): Pension program providing monthly benefits after retirement
Contribution Rates
Total contributions range from 8.7% to 10.2% of monthly wages depending on the industry risk category for JKK. Employers bear the larger share of contributions, typically around 6.5-8%, while employees contribute approximately 3%. JKK and JKM are fully employer-funded, while JHT and JP contributions are shared between employer and employee.
Employer Obligations
Indonesian employers must register all employees with BPJS Ketenagakerjaan within 30 days of hire. Contributions must be calculated accurately and remitted monthly by the 15th of the following month. Employers are responsible for both their portion and the employee portion (which they deduct from wages). Non-compliance results in penalties and potential legal sanctions.
Coverage for Foreign Workers
Foreign workers legally employed in Indonesia must also be enrolled in BPJS Ketenagakerjaan. They are covered by the same programs as local employees and receive the same benefits. However, rules about withdrawing JHT balances when leaving Indonesia differ from local employees. EORs operating in Indonesia handle all BPJS registration and contributions as part of their employment service.