How to Hire in Bali: A Guide for Foreign Businesses

Hiring in Bali offers access to a vast local and foreign talent pool, but it comes with specific legal requirements you need to understand. Indonesian employment law dictates strict rules for contracts, employee benefits are mandatory, and incorrectly classifying a worker can lead to significant penalties.

Additionally, if you plan to bring in foreign talent, that involves navigating work permits and adhering to labor laws for expatriates.

This guide breaks down the essentials of how to hire in Bali, covering employment contracts, workplace compliance, compensation, benefits, and the rules for hiring both local and foreign employees.

Understanding Indonesian Employment Regulations

Types of Employment Contracts in Bali

In Bali, employment relationships are primarily governed by Indonesia’s Labor Law (Law No. 13 of 2003) and further clarified by regulations like Minister of Manpower (MoM) Regulation No. 35 of 2021. These laws strictly define how workers can be classified. It’s crucial to use the correct contract type; misclassifying an employee, for instance, by using a fixed-term contract for a permanent role, can result in fines, payment of backdated benefits, and even hiring restrictions.

Additionally, your company’s registered business activities, defined by its KBLI codes (Klasifikasi Baku Lapangan Usaha Indonesia), will determine the types of roles you can legally fill based on its registered business activity.

Here’s an overview of common contract types in Bali, Indonesia for hiring employees:

Contract Type	Best For	Key Considerations
Fixed-Term (PKWT)	Temporary, seasonal, or project-based roles.	– Maximum 5-year duration, including renewals. – No severance pay, but end-of-contract compensation is required. – Must be in writing and registered with the Ministry of Manpower. – Can only be used for roles that are non-permanent in nature.
Permanent (PKWTT)	Long-term employees, key business roles.	– No end date. – Severance pay required upon termination. – Full benefits included (BPJS, paid leave, etc.). – Not permitted for foreign hires – expats must be on fixed-term contracts linked to their work permit.
Freelance/Independent Contraactor	Short-term projects, consulting, specialized skills.	– Not legally considered an ‘employee.’ – No entitlement to BPJS, severance, or other benefits. – Must be structured as a B2B agreement (invoicing required). – Overuse of freelancers to fill full-time positions can trigger worker misclassification penalties.

Workplace Compliance and Employer Obligations in Bali

Bali’s employment laws cover three key areas: company policies, employee rights, and employer obligations. Emerhub’s HR compliance experts can help stay ahead of labor law changes and optimize internal policies to protect both employers and employees. Here are some key considerations our experts can help you navigate:

1. Company Regulations (Peraturan Perusahaan)– If you employ more than 10 people, you’re legally required to establish Company Regulations (CR), approved by the Indonesian Ministry of Manpower. This document is valid for 2 years, after which it must be renewed. It must specify salary structures, working hours, benefits, and termination policies. Without it, your business defaults to standard labor laws, which may not always be in your favor.
2. Employee Entitlements– Employees must receive at least the provincial minimum wage, social security (BPJS), overtime pay, and severance compensation if applicable. Failing to comply can lead to fines, backdated payments, or legal disputes.
3. HR Compliance Best Practices– To mitigate legal risks, you should maintain well-documented records of employment contracts, payroll, and benefits. Regular HR audits, along with staying updated on labor law changes, help ensure compliance and foster a secure, transparent workplace.

Compensation, Benefits, and Employee Rights in Bali

Minimum Wage Across Indonesia and Salary Requirements

Indonesia’s minimum wage is set at the provincial levels, meaning minimum wage varies depending on where in Bali your business operates. Each year, the government adjusts these rates based on inflation, economic growth, and cost of living.

As of 2025, the minimum wage across Bali’s regions is as follow:

Province	Minimum Wage (IDR/month)	Minimum Wage (USD/month)
Badung	3,534,339	235.62
Denpasar	3,298,117	219.87
Gianyar	3,119,080	207.94
Tabanan	3,102,520	206.83
Jembrana	2,996,561	199.77
Buleleng	2,996,561	199.77
Klungkung	2,996,561	199.77
Karangasem	2,996,561	199.77
Bangli	2,996,561	199.77

While these minimum wage figures are important for compliance, especially for operational or labor-related roles, it’s worth noting that they typically don’t reflect the salary expectations for skilled professionals or managerial positions. 

If you are looking to hire experienced or specialized talent in Bali, salaries will naturally be determined by their skills, experience level, and the prevailing market rates for those specific roles, which are usually significantly higher than the baseline minimum wage. 

Offering competitive salaries above the minimum is key to attracting top talent, especially in sought-after fields.

Employee Benefits and Social Security (BPJS) Contributions

When hiring in Bali, you’ll need to enroll your employees in Indonesia’s national social security program (BPJS)– a mandatory system covering healthcare and employment benefits. BPJS is split into two main programs:

• BPJS Kesehatan (Health Insurance)– Covers medical expenses, hospitalization, and preventive care.
• BPJS Ketenagakerjaan (Employment Benefits)– Includes workplace accident insurance, old-age benefits, pensions, and death benefits.

Both you and your employees will contribute to BPJS. These monthly contributions must be remitted no later than the 10th of the following month (of the following business day if it falls on a public holiday) to avoid penalties:

• Health Insurance (BPJS Kesehatan): 4% employer contribution, 1% employee contribution.
• Old-Age Security (JHT): 3.7% employer contribution, 2% employee contribution.
• Pension Security (JP): 2% employer contribution, 1% employee contribution.
• Employment Injury Security (JKK): 0.24% employer contribution (varies by industry risk level).
• Death Security (JKM): 0.3% employer contribution.
• Housing Savings Program (Tapera): 0.5% employer contribution, 2.5% employee contribution (to be implemented by 2027).

Working Hours, Overtime, and Leave Entitlements

Bali follows Indonesia’s national labor regulations, setting the standard workweek at 40 hours. However, businesses have flexibility in structuring these hours:

• Five-day workweek: 8 hours per day (Monday to Friday)
• Six-day workweek: 7 hours per day (Monday to Saturday)

Any work beyond this limit is considered overtime, and you must compensate employees accordingly. If your business requires extended hours due to seasonal peaks, client deadlines, or operational surges, it’s essential to budget for overtime costs in advance:

• The first hour of overtime must be paid at 1.5 times the employee’s hourly wage.
• Any additional overtime hours are 2 times the hourly wage.
• Employees also cannot work more than 4 hours of overtime per day or 18 hours per week.

Apart from fair wages and working hours, employees in Bali are entitled to various types of leave to support their well-being. These include:

• Annual Leave– At least 12 days of paid leave per year, granted after one year of continuous employment.
• Sick Leave– Fully paid leave with a medical certificate, though extended illnesses may involve a tiered pay reduction system.
• Public Holidays– Bali observes at least 15 public holidays annually, with slight variations based on government declarations specific to Balinese culture.
• Maternity Leave– Three months of paid leave (1.5 months before birth and 1.5 months after).
• Other Leave Entitlements– Bereavement leave, marriage leave, and religious leave in specific circumstances.

How to Hire Foreign Employees in Bali

Navigating Visa and Work Permit Requirements for Foreign Hires

Hiring foreign talent in Bali means following Indonesia’s strict visa and work permit regulations. Every expat employee needs proper authorization to work legally, and companies must secure the right permits to stay compliant. From limited stay permits (KITAS) to business visas, understanding these requirements ensures a smooth onboarding process and avoids legal complications:

• Company Sponsorship is Mandatory– Only registered Indonesian businesses can legally sponsor foreign employees. If you don’t have a local entity, you can either set up your own company with Emerhub’s assistance or connect with Employer of Record (EOR) services, where they act as the legal employer while you manage the employee’s daily work.
• Not Every Role is Open to Foreigners– Indonesia reserves certain positions for locals, including HR, legal, and some retail jobs. Our on-ground experts can help you navigate exemptions, structure compliant contracts, or find local talent to fill key positions.
• Work Permit and KITAS Process– Your company must first secure a Foreign Manpower Utilization Plan (RPTKA), followed by the work permit (IMTA) and a valid limited stay permit (KITAS). This process takes an overall 4 to 8 weeks and requires strict adherence to Indonesia’s immigration regulations.
• Changing Employers isn’t Simple– Work permits are tied to a specific job and company. If a foreign employee switches roles or employers, they’d have to restart the entire application process.

Employment Contracts for Foreign Hires in Bali

As mentioned earlier, employment agreements must follow fixed-term (PKWT) rules and align with the validity of the employee’s work permit (KITAS), typically granted for six or twelve months. Here are some key considerations when hiring foreign employees in Bali:

• Limited Contract Types– Foreign employees can only be hired under fixed-term (PKWT) contracts, which must be renewed based on the KITAS duration.
• Visa-Linked Employment– Contracts cannot exceed the validity of the employee’s work permit. To extend the contract, employers must apply for a new KITAS before the current one expires.
• Tax and Benefits Compliance– Foreign employees must pay progressive income tax (5% to 35%) and contribute to BPJS Ketenagakerjaan for workplace injury and pension coverage.

Given these restrictions, it’s crucial for you to structure employment contracts correctly to maintain compliance and avoid visa setbacks or payroll-related issues. Emerhub’s on-ground experts can help you meet regulatory standards while managing payroll, tax filings, and social security registration on your behalf.

Employer of Record (EOR) Solution for Hiring in Bali

If you’re expanding to Bali but don’t want to set up a local entity, an Employer of Record (EOR) allows you to hire employees without navigating company registration, tax compliance, or work permits. Under an EOR, a local entity legally employs your team, while you manage their day-to-day work.

Our EOR services cover every aspect of employment compliance in Indonesia, including work permit sponsorship, payroll processing, tax reporting, and employee benefits administration. We’ll ensure full legal compliance whether you’re hiring one employee or building a remote team.

Looking to hire in Bali with ease? Reach out to our experts today to explore the best hiring solutions for your business!