Indonesia has become one of the best markets in Asia for business. It has a diverse workforce as well as varying labour compliance protocols. Hence, it is important to understand Indonesian laws, government regulations and taxes for your specific industry. An efficient HR & Payroll tech solution like Ramco can be a key differentiator to accelerate your company's growth in Indonesia. This subcontinent is home to diverse ethnic groups and cultures. With many employees working from home and facing dynamic challenges owing to the pandemic, a payroll solution that is tailored to the local needs of your employees will help companies manage their HR and payroll-related policies efficiently.
If you read this article, you are probably already aware of the common benefits of having an integrated payroll system in your organisation. Therefore, in this blog, we will focus on the fine details that a Chief Human Resource Officer, Payroll Manager, or a small business owner in Indonesia may overlook but are critical in deciding on an ideal HR and Payroll solution.
1. Compliant with government regulations and tax policies of Indonesia
Three laws govern payroll tax in Indonesia:
- The Income Tax Law
- The Social Security Law
- The National Health Insurance Law
These laws are collectively referred to as PITNHI or Peraturan Pemerintah Nomor 18 Tahun 2004 tentang Pajak Penghasilan dan Retribusi Sosial dan Kesehatan. Ramco's HRP solutions are compliant with all laws and regulations and are updated regularly to ensure your company does not fall behind in compliance. It automatically calculates mandatory allowances and deductions according to your HR policies, as well as taxes applicable to your business.
2. Automated statutory deductions & integration with Indonesian government agencies
We are well-versed in Indonesian labour laws and regulations, including BPJS (social security deductions), health insurance, taxes, and compensation packages. Our team of experts can help you set up your payroll, register your employees for BPJS, and guide you through the entire process.
With the ability to automatically integrate with various Indonesian government agencies for benefit claims and other features in a single application, Ramco's HRP solution helps you achieve a more productive payroll process. Not only is it fully compliant with new regulations and laws and up to date, but it also offers a wide range of features that can replace your manual processes and legacy systems to help you achieve your business goals. The solution's flexibility allows you to make your payroll efficient and productive.
3. Designed to meet the local and cultural needs of Indonesia
Our payroll service is designed to meet Indonesia's local and cultural needs. With so many different ethnic groups and traditions, you must manage your employees in a way that respects cultural diversity while meeting your business needs. This means understanding various religious holidays and customs and being able to handle multiple languages and regional communities in the workplace. That's why our HR & Payroll solutions for Indonesia offer features like multilingual support for Indonesian and English and data fields for religion, ethnicity, and marital status to accommodate and manage different employee groups. There are also customizable workflows available to establish internal controls through automated workflows.
4. Manage your entire payroll system through our mobile app
With our mobile app, you can manage your entire payroll system from anywhere, at any time. You can do all of the following and much more right from our mobile app-
- Manage employee data and information such as employee tax codes, pay rates, bank account information, and employee contact information.
- Manage employee leave types, entitlements, and balances-for example, annual leave, sick leave, or holidays.
- Enter timesheets for employees or import timesheet data from other systems.
- Calculate payroll, including allowances and deductions, or let our software calculate them for you automatically.
- Generate pay stubs for your employees.
- Process payroll in bulk using our payroll wizard - or generate individual pay stubs as needed.
You can manage all of the above basic features in addition to your customised HR workflow features from the comfort of our mobile app.
5. Real-time chatbot and WhatsApp support for payroll creation and overall employee engagement
Employer and employee engagement is a critical factor in overall success. With a real-time chatbot and WhatsApp support for payroll generation, we have created a strong channel for employee engagement that allows them to request their salary slips on-demand at any time. It also helps reduce human involvement in generating payslips which can help companies save money by decreasing employee turnover rates and improving workflow efficiency.
6. Automate salary/EMI deductions for employees who opt for early salary or loan against salary
Early salary and loans against the salary are a great way to help your employees overcome financial obstacles, especially while struggling with the pandemic. But managing these deductions for individual employees is cumbersome, tedious, and prone to errors and fraud when done manually. Our payroll solution automates the deduction of salaries or EMIs for employees who opt for early pay or loans against salary. The solution leverages our advanced machine learning models and Big Data analytics that help us calculate and deduct the salary advance that needs to be repaid by the employee at the end of each month. An added benefit is that the solution helps entrepreneurs, especially startups, understand their employees' credit history, repayment behaviour, and overall financial health to improve their HR policies.
Conclusion
Indonesia is the largest spender on technology in Southeast Asia. It is time for our HR and payroll processes to be automated with an approach dedicated to Indonesia's laws, culture, and working style, rather than adopting a slapstick rigid solution from the west. Your payroll solution should be more than just employee data management and must add value through optimization, automation, and collaboration. Ramco is a reliable and cost-effective HR and payroll system that potentially saves you a lot of time and money in the long run while constantly evolving, just like your business needs.
