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Fixed-term contracts are common in Indonesia. They have a maximum initial term of two years but can often be renewed repeatedly. They are known as Perjanjian Kerja Waktu Tertentu (PKWT).
Fixed-term contracts are always recommended when hiring in Indonesia.
Open-ended contracts are legal in Indonesia, and can be suitable for employment with no specified end date. These contracts are known as Perjanjian Kerja Waktu Tidak Tertentu (PKWTT).
Generally, these employment contracts are not recommended when hiring employees in Indonesia.
There are no other notable types of employment contacts in Indonesia. The two primary types of employment contracts in Indonesia are fixed-term and open-ended contracts.
Your business can easily hire employees in Indonesia without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
We advise employers to hire employees on fixed-term contracts when possible in order to protect companies in cases of dispute.