In Indonesia, employers are required to contribute to the national social security system, known as BPJS (Badan Penyelenggara Jaminan Sosial). This system consists of two main programs:
BPJS Kesehatan (Health Insurance)
BPJS Ketenagakerjaan (Employment Social Security)
This article outlines the applicable contribution rates and highlights the latest update to the Pension Security (JP) salary cap effective March 2026.
BPJS Ketenagakerjaan (Employment Social Security)
This program includes the following components:
1. Jaminan Kecelakaan Kerja (JKK) – Work Accident Insurance
Employer: 0.24% – 1.74% (depending on risk classification)
Employee: 0%
2. Jaminan Kematian (JKM) – Death Insurance
Employer: 0.30%
Employee: 0%
3. Jaminan Hari Tua (JHT) – Old Age Savings
Employer: 3.7%
Employee: 2%
No salary cap
4. Jaminan Pensiun (JP) – Pension Security
Employer: 2%
Employee: 1%
Subject to a salary cap
2026 Update – JP Salary Cap Increase
Effective March 2026, the maximum salary used to calculate JP contributions has been updated:
Previous cap (Mar 2025 – Feb 2026): IDR 10,547,400
New cap (from Mar 2026): IDR 11,086,300
This means:
Contributions are calculated on actual salary up to this cap only
Employees earning above the cap will contribute based on IDR 11,086,300 maximum
Example (for salaries at or above the cap)
Employer contribution:
2% × 11,086,300 = IDR 221,726Employee contribution:
1% × 11,086,300 = IDR 110,863
BPJS Kesehatan (Health Insurance)
Employer: 4%
Employee: 1%
Salary cap: IDR 12,000,000 per month
This covers:
Employee
Spouse
Up to 3 children
Key considerations
Annual adjustment of JP cap
The JP salary cap is reviewed and adjusted annually based on economic indicators such as GDP growth.
Applicability
The cap only impacts employees earning at or above the threshold
Employees earning below the cap are not affected
Payroll impact
Contribution rates remain unchanged
Only the maximum calculation base has increased
This results in a slight increase in both employer cost and employee deductions
Practical impact
Employers: Slight increase in monthly pension contribution costs
Employees: Slight increase in payroll deductions
Timing: Changes apply from March 2026 payroll onward (often reflected in April payroll processing)
Social Insurance Contribution Base
The base salary used to calculate BPJS contributions is typically set at the time of onboarding and may not automatically adjust when an employee receives a salary increase during the year.
If an employee's salary is increased mid-year, confirm with your payroll team whether the contribution base needs to be updated to reflect the new salary. Failing to update it can result in under-contributions.
THR (Tunjangan Hari Raya) — Religious Holiday Allowance
THR is a mandatory statutory payment in Indonesia, typically paid before the major religious holiday relevant to the employee (e.g. Eid al-Fitr for Muslim employees). Entitlement depends on length of service:
Less than 12 months of service: Prorated THR = (Months of Service ÷ 12) × Monthly Salary
12 months or more of service: One full month's salary
Calculation base: Depending on company policy, the THR calculation may use basic salary only, or basic salary plus fixed allowances. Confirm which basis applies to your employees.
Summary
BPJS contributions remain mandatory for all employees in Indonesia
The JP pension cap has increased to IDR 11,086,300 effective March 2026
Contribution percentages remain unchanged (2% employer / 1% employee)
The financial impact is minimal but required for compliance