Home » Doing Business in Indonesia » Employing Expatriates

Guidelines for Salary Standards for Foreign Workers

Translate this Page

GOVERNMENT REGULATION /ANNOUNCEMENT
Guidelines for Salary Standards for Foreign Workers
(Decision of Director General of Taxation, No. KEP-173/PJ/2002, dated April 3, 2002)

THE DIRECTOR GENERAL OF TAXATION

Considering:

a. that the guidelines for standard of salary for foreign workers as stated in the Circular of the Director General of Taxation no. SE-25/PJ.43/1993 dated October 7, 1993 (State Gazette no. 5479 p. 13B-14B), no longer represents the actual salary conditions of foreign workers today;

b. That based on considerations as intended in section a above, it is necessary to stipulate a decision of the Director General of Taxation on Guidelines for Salary Standards for Foreign Workers;

In view of:

1. Law no. 6 of 1983 (State Gazette no. 3994 p. 1B-20B and forward), on General Rule and Application of Taxation (LN RI of 1983 no. 49, TLN RO No. 3262) as already amended by Law No. 16 of 2000 (State Gazette no. 6503 p. 1B-9B and forward) (LN RI of 2000 No. 126, TLN RI No. 3984);

2. Law no. 7 of 1983 (State Gazette no. 3995 p. 1B-31B and forward) on Income Tax (LN RI of 1983 no. 50, TLN RO No. 3263) as already amended by Law No. 17 of 2000 (State Gazette no. 6506 p. 1B-7B and forward) (LN RI of 2000 No. 127, TLN RI No. 3985);

3. Decree of the Minister of Finance, No. KMK-545/KMK.04/2000 (State Gazette no. 6569 p. 2B-5B) on Tax Inspection Procedures;

4. The Decision of the Director General of Taxation No. KEP-545/PJ/2000 (State Gazette no. 6577 p. 1B-6B) on Implementing Instructions with regard to Withholding, Depositing, and Reporting of Article 21 and Article 26 Income Tax, in connection with the Employment, Services and Activities Performed by Individuals;

DECIDES:

To stipulate:
THE DECISION OF THE DIRECTOR GENERAL OF TAXATION ON GUIDELINES FOR SALARY STANDARDs FOR FOREIGN WORKERS.

Article 1

Referred to as salary standards for foreign workers in this Decision of the Director General of Taxation, is the amount of gross income for 1 (one) month, in relation with the work, in the form of salary and other wages, that are received by foreign workers that work in industries other than oil and natural gas exploration.

Article 2

The Guidelines for Salary Standards for foreign workers, as stated in the Attachment of the Decision of the Director General of Taxation is to be used for:

a. If there is an indication that the Taxpayer's Bookkeeping is not correct so that the amount of payable tax could not be calculated

b. If there is a proof that demonstrates a payment for a foreign worker’s salary that is not entirely entered for the payment of Article 21 or Article 26 Income Tax;

c. The inspector does not have the data to determine the amount of a foreign worker’s salary, in order to determine the amount of the obliged Article 21 or Article 26 Income Tax;

Article 3

The use of the guidelines for salary standards for foreign workers as intended in Article 2 shall consider:

a. The nationality of the stated foreign worker;

b. The type of business of the company which the foreign worker receives his/her remuneration from (the employer);

c. The position or title of the foreign worker in the company he/she works for.

Article 4

At the time when this Decision of the Director General of Taxation begins to take effect, the Circular of the Director General of Taxation No. SE-25/PJ.43/1993 dated October 7, 1993 on the Guidelines for Standard of Salary/Wages of Foreign Workers shall be declared null and void.

Article 5

This Decision of the Director General of Taxation shall begin to take effect on January 1, 2002, and will be used for tax year 2002.

For public cognizance, this Decision of the Director General of Taxation shall be published by placing it in the State Gazette of the Republic of Indonesia.

Stipulated in Jakarta on April 3, 2002

THE DIRECTOR GENERAL

- signed –

HADI POERNOMO
Employee Main Number: 060027375

Salary Standard Guidelines for Foreign Workers [ PDF 50 KB]

Our thanks to Ray Indra for translating and providing this information.

Copyright © 1997-2012, Expat Web Site Association Jakarta, Indonesia http://www.expat.or.id All rights reserved. The information on Living in Indonesia, A Site for Expatriates may not be retransmitted or reproduced in any form without permission. This information has been compiled from sources which we, the Expat Web Site Association and volunteers related to this site, believe to be reliable. While reasonable care has been taken to ensure that the facts are accurate and up-to-date, opinions and commentary are fair and reasonable, we accept no responsibility for them. The information contained does not make any recommendation upon which you can rely without further personal consideration and is not an offer or a solicitation to buy any products or services from us. Opinions and statements constitute the judgment of the contributors to this web site at the time the information was written and may change without notice.