- Home
- Tax & Accounting
- Payroll Management
Tax & Accounting
Payroll Management
- Share:
The payroll function is an essential aspect of HR operations, affecting each employee. Meeting local regulations and statutory compliance is as crucial as ensuring employees receive their salaries on time and accurately.
LMI Consultancy offers a sophisticated local payroll service; benefit from their streamlined processes and reduce administrative burdens. Get direct access to local teams of experts who will help calculate your gross wages, carefully deduct all withholdings and deductions, provide easy-to-read payslips, and handle all your employment tax filings accurately.
Outsourced Payroll Management
- Cost: Can reduce overhead costs by approximately 30%. Reduces technical debt and offers better scalability. More flexible than in-house employee overheads and can be excellent value
- Time and Resources: Frees up time for business owners and managers to focus on strategic goals. Reduces administrative burden on employees and owners
- Compliance & Accuracy: Payroll providers specialise in payroll compliance, ensuring accuracy and reducing the risk of penalties. Compliance is managed for you
- Scalability: More scalable and can adapt to growth or contraction
- Control: Limits direct control but offers customisation options to meet specific payroll needs. You can pick and choose processes depending on what makes the most sense for you
- Expertise: Managers and owners are working with payroll professionals focused on payroll processing, compliance, and payroll and benefits technologies. Brings in fresh perspectives and ideas
In-House Payroll Management
- Cost: May appear cheaper initially with payroll software, but ongoing maintenance can become burdensome. Requires costs such as salaries, software, and employee time
- Time and Resources: Places more administrative burden on employees and owners
- Compliance & Accuracy: Business owners must dedicate significant time to compliance research
- Scalability: Requires technological investment as the company grows
- Control: Offers the most control over processes. Internal staff are familiar with internal workings, and only they have access to payroll records
- Expertise: Relies on the expertise of current employees
Manual Payroll vs Automatic Payroll: What’s Best for Your Business?
While automated payroll software simplifies salary calculations and tax withholdings, its complexity might not suit every business’s unique needs. Expert oversight and personalised support are the hallmarks of manual services, which are especially crucial for:
- Indonesian tax laws are intricate and subject to frequent changes.Indonesian tax laws are a complex web of regulations, frequently updated, making compliance challenging.
- By performing manual services, businesses can ensure accurate calculations and compliance, avoiding the financial and legal repercussions of mistakes.
- To ensure correct payroll processing, manual intervention is often required for cases involving expatriate employees, unique benefits packages, or uncommon deductions.
- With expertise in Indonesian labour laws and tax regulations, a local payroll tax consultant can ensure your payroll and tax management are handled correctly.
- By outsourcing payroll and tax management, you free up time and resources to focus on your core business activities.
Document Requirements
- List of employees data (employee numbers, NPWP, Status permanent/non permanent, marital status, position, grade (if any), Bank account details (number, name of bank, name of beneficiary)
- Payroll details including basic salary, monthly allowances, bonus or incentives (if any)
- Certificate of BPJS Ketenagakerjaan and Kesehatan
- List of temporary benefits
- List of allowances (if any)
- List of reimbursements (if any)
- List of load deductions (if any)
- Other required documents
Streamline Payroll Management in Indonesia with LMI Consultancy
- Consult your inquiry with our professional consultant
- Submit necessary document
- Proceed with the payment
- Application process
- Receive the complete document
Other Popular Company Setup Services in Indonesia
Setup a Business in Indonesia with LMI Consultancy
Established in 2016, LMI Consultancy has been supporting countless individuals in understanding the intricacies of visas, business setup, tax & accounting, and property investment in Indonesia, providing a comprehensive and dependable service.
We take pride in being an ethical and innovative company that places a strong emphasis on exceptional customer service and strives to set a new standard in our industry, guaranteeing a smooth and encouraging experience for our clients.
FAQ
What reasons might a business prefer manual payroll and tax processes to automated payroll?
The flexibility and personal attention offered by manual payroll services may appeal more to smaller businesses or those with non-standard payroll setups than automated software. Implementing a payroll management system may present initial cost and complexity challenges.
What's the Indonesian 13th-month salary?
According to Indonesian employment regulations, workers are given a bonus equivalent to one month’s salary each year. The salary benefit amounts to one month’s pay, plus any standard monthly stipends. Employees receive this benefit before their main religious holiday, identified during onboarding.
Which taxes apply to payroll distributions?
Monthly and annual tax payments and reporting are required of the company. The monthly taxes consist of the following:
- Corporate income tax under article 25 (PPh 25) needs to be settled by the 15th of the subsequent month at the latest submitted to the tax office on the 20th of the following month at the latest.
- Article 21 (PPh 21) Employee Withholding Tax is due by the 10th of the next month and must be filed with the tax office by the 20th.
In contrast, the yearly taxes amount to:
- Corporate income tax is due by the end of April, the fourth month after the fiscal year.
- Individual income tax must be paid by the end of March, three months after the close of the fiscal year.
Disclaimer : Our services in LMI Consultancy provide consulting services focused on ensuring client compliance with applicable immigration and legal regulations in Indonesia. We do not provide or facilitate the production of official government documents, nor do we offer any expedited or preferential access to government services.
Popular Services
Interesting News
Contact Us
Discover How We Can Help You
Transform your ambitions into achievements. Contact LMI Consultancy today and take the first step towards your business or life expansion across Asia!
- Jakarta HQ Office
- Seminyak Bali Office
- Sanur Bali Office
- Canggu Bali Office
- Jakarta HQ Office
Get Your Free Consultation
Connect with our consultants for expert advice.
- Seminyak Bali Office
Get Your Free Consultation
Connect with our consultants for expert advice.
- Sanur Bali Office
Get Your Free Consultation
Connect with our consultants for expert advice.
- Canggu Bali Office
Get Your Free Consultation
Connect with our consultants for expert advice.
News & Resources
Get to Know Latest Business & Visa Updates
As of 2025, Indonesia’s corporate income tax rate remains at 22%, while the personal income tax scale ranges from 5% to 35%. Sure, the varieties of tax schemes and swift changes in regulations might spark intricacies and confusion, and the cost of misinterpretation can be significant. The role of an expert partner can help businesses […]
LMI Consultancy
November 12, 2025
In a sweeping pivot in state enterprise governance, President Prabowo Subianto announced that foreign nationals (WNA) will now be eligible to lead Indonesia’s state-owned companies (BUMN), marking a bold shift in decades-old policy. The announcement came during a dialogue with Forbes Chairman Steve Forbes at the Forbes Global CEO Conference on 15 October 2025 in […]
natalia Hanifa
November 11, 2025
When a foreign- or locally-owned company enters Indonesia’s economic ecosystem, understanding the tax system, its interplay with tax treaties, and the current Indonesian tax regime under the prevailing income tax law becomes mission-critical. For foreign investors and expats establishing a company, understanding how Indonesian tax works is crucial. Indonesia also maintains tax treaties with over […]
LMI Consultancy
November 11, 2025
Indonesia’s economy continues to attract international attention, fuelled by steady growth, a young workforce, and increasing investor confidence. As more professionals and entrepreneurs establish their presence in the country, understanding the fundamentals of Indonesia’s taxation system becomes essential. One of the first requirements for both individuals and companies is the NPWP, or Nomor Pokok Wajib […]
LMI Consultancy
November 3, 2025
For foreigners who would like to reside in Indonesia for more than a year, short-term Indonesia visas are not very convenient when it comes to their sustainability. With a Single Entry Visa, it’s even likely impossible to stay more than the period of 180 days, while it’s possible with a Multiple Entry Visa, despite being […]
LMI Consultancy
October 30, 2025
A tax return is a formal declaration submitted to a government tax authority, detailing a taxpayer’s income, deductions, tax paid and tax owed during a given period. Universally, this document serves to provide transparency, enable assessment and ensure that taxes are paid in accordance with law. In Indonesia, a corporate income tax return (Surat Pemberitahuan […]
LMI Consultancy
October 29, 2025
