6 Reasons Why You Should Outsource Payroll in Indonesia

Managing your company’s payroll internally can be quite a headache. Especially in emerging markets where laws and regulations are often changing. Even the slightest mistakes in accounting can eventually cost a lot of money.  We have put together this article to give you six reasons why payroll outsourcing can be more efficient for your company than […]

Managing your company’s payroll internally can be quite a headache. Especially in emerging markets where laws and regulations are often changing. Even the slightest mistakes in accounting can eventually cost a lot of money. 

We have put together this article to give you six reasons why payroll outsourcing can be more efficient for your company than doing it in-house.

What is payroll outsourcing

In short, payroll outsourcing means that instead of dealing with payroll matters in-house, you outsource payroll to a professional service provider such as Emerhub. This concerns all financial transactions related to employees, including:

  • calculation of salaries and wages
  • calculation of benefits
  • tax deductions
  • payroll payments

Why you should outsource payroll in Indonesia

Payroll is a non-core activity. It is a time-consuming obligation, yet, its role in the company’s sustainability is crucial.

Some entrepreneurs think that it is wiser and more affordable to handle payroll in-house. However, in many cases and the long term, it is more comfortable and more economical to outsource payroll activities. Here’s why.

#1 Save money on monthly expenses

Outsourcing a payroll service is more cost-effective and can reduce your costs significantly. That is, when you outsource payroll management, you don’t have to spend your money on:

  • hiring or training in-house payroll employees
  • paying taxes on payroll employees
  • buying expensive accounting software
  • keeping the accounting software up-to-date

#2 More time to focus on your core business

Although payroll job is repetitive work, it requires a lot of time and attention to detail, no matter how many employees you have on your payroll. Therefore, delegating your monthly time-consuming tasks to professionals can be a strategic move, especially for small and growing companies.

Why? Because all that time you will save by outsourcing payroll services can be invested in developing your strategies, growing sales, and expanding your business instead.

Gary Keller, an American entrepreneur, and best-selling author has said: ‘You can do two things at once, but you can’t focus effectively on two things at once.’ Outsourcing a payroll service enables you to focus more on productivity instead of spending your time and nerves on tedious administrative tasks that you can easily outsource.

#3 Guaranteed compliance with local laws

Using a professional payroll service also frees you from having to delve into the myriad of local manpower laws that accompany payroll management. It is also essential since laws in emerging markets can sometimes change overnight and it is not always possible to keep up with all regulations, deadlines, and tax obligations.

Keep in mind that failure in maintaining compliance can be expensive. The law is the law and being unaware of some regulations, or implemented changes does not mean that you are not liable. That is, you are legally responsible for all errors that occur.

However, outsourcing the service guarantees you that a team of professionals who know all requirements and who keep an eye on all recent changes in regulations will manage your employees.

#4 Keep the salaries confidential

If you handle your payroll in-house, there will always remain a risk that some of the employees could get access to payroll information in the company’s server or that the payroll staff would reveal the salary information to others.

When outsourcing payroll management, however, your data will be kept in well-secured servers. Thus, there is no chance that someone from your company could find out these delicate details. This way you will avoid the potential dramas that may occur in the office.

#5 Avoid mistakes

As already mentioned, errors in payroll can be expensive. Not only what concerns compliance with the law, but regarding the well-being of your employees as well. In other words, if you want to keep your employees happy and motivated, ensure timely and correct paychecks.

How to verify that all your calculations and payments are correct when you manage payroll on your own? If you outsource payroll, professionals will handle everything, and you can be sure that calculations, salaries, and reports will be done accurately and on time.

#6 Less worry

When you outsource payroll management to a professional service provider, all monthly hassles and concerns will be gone. In addition to having the peace of mind that everything related to your payroll will be handled flawlessly and on time, you can be worry-free regarding the following, too:

  • Your bookkeeper calling in sick, taking maternity leave, or suddenly leaving the company with all the necessary knowledge and you having to hire or train a new employee.
  • Embezzlement. Even with the most trusted and long-term employees, there will always remain a risk of fraud.
  • Fines. Late or incorrect reporting results in penalties. Professional payroll employees are punctual. Thus they will handle everything competently, accurately, and on time.

How to outsource your payroll in Indonesia to Emerhub

For outsourcing your payroll to Emerhub, all you need to do is provide us with the following information:

Information we need
1. Number of employees
2. Name and position of each employee
3. Main gross salary of each employee
4. How much for allowances
5. Amount of wages for insurance calculations (does not include benefits)
6. Number of employees in each department, their names, and positions
7. Who got cash advance and how much
8. Number of dependents
9. Who is resident/non-resident
10. Who took annual leave, how many days, which dates
11. Tax ID number
12. Bank account details of each employee


Payroll services Emerhub offers:

  • Setting up records of employees’ salaries, wages, bonuses, and applicable taxes
  • Applicable insurance calculations (social, health or unemployment)
  • Processing payroll payments

Payroll outsourcing in Indonesia

Drop us an email with your details at [email protected] to contact our office in Jakarta. Our experienced accountants are more than happy to help.

Payroll outsourcing in Bali

If your business is in Bali, get in touch with our Bali office directly. Directly send us an email with your inquiry at [email protected], and we will get back to you as soon as possible.

Payroll outsourcing in Vietnam

For outsourcing payroll services in Vietnam, send us your details and ask for a quote from our Saigon office via [email protected].

Payroll outsourcing in the Philippines

Fill in the form below or contact us via [email protected] to discuss the details about payroll outsourcing in the Philippines.

Since 2011, Emerhub has helped over 500 companies of all sizes enter Southeast Asian markets.

Get in touch with Emerhub by filling in the form below to discuss how we can help your business thrive in Indonesia.