Changes in social security rates in Indonesia for 2021

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  • Indonesia has increased its social security contributions for Class III participants, but reduced the maximum salary base for pensions for 2021.
  • Indonesia’s social security programs are managed by two organizations – the Social Security Administrator for Health (BPJS Kesehatan) for health care and the Workers’ Social Security (BPJS Ketenagakerjaan) for pensions.
  • The health care program is said to be the largest single-payer national health insurance program in the world, covering 83 percent of the country’s 270 million people.

Indonesia has implemented new social security rates for 2021, which will impact health and pension premiums.

The government has increased the premium for Class III health facilities for non-employees from 25,500 rupees (US $ 1.74) to 35,000 rupees (US $ 2.39) in addition to reducing the maximum salary base for pensions of 8,939,700 rupees (US $ 612) to 8,754,600 rupees (US $ 599).

Indonesia’s social security programs are run by two organizations – the Social Security Administrator for Health (BPJS Kesehatan) for workers’ health care and social security (BPJS Ketenagakerjaan) for pensions. The country launched its universal healthcare and retirement programs in 2014, requiring every citizen and expat to join.

The health care program is said to be the largest single-payer national health insurance program in the world, covering 83 percent of the country’s 270 million people. Those enrolled in the program are eligible for a range of treatments, from organ transplants to dental treatment to physiotherapy.

Healthcare class facilities

The BPJS Kesehatan System is divided into three classes: Classes I, II and III, which determine the type of room a patient receives; Class I qualifies the largest and is shared with one or two other patients. The level of treatment is the same regardless of the type of class.

What are the bonuses for the employees?

Five percent of an employee’s monthly salary will be used to pay the health care premium, with a salary cap of 12 million rupees (US $ 821).

Private sector workers will pay one percent and the remaining four percent will be paid by their employer. For civil servants, the government contributes 3% and the employee 2%. In addition, the premium covers the employee’s spouse and his three dependent children up to the age of 21.

What are the premiums for the self-employed?

The contributions for non-salaried / self-employed members are as follows:

  • Class I – 150,000 rupees (10.26 USD) per person per month;
  • Class II – 100,000 rupees (US $ 6.84) per person, per month; and
  • Class III – 35,000 rupees (US $ 2.39) per person per month.

For those paying for Class III, the government will top up an additional 7,000 rupees (US $ 0.47)

How do you calculate retirement bonuses for employees?

The retirement program covers the following:

  • Work compensation – provides protection against accidents occurring during or as a result of work;
  • Old Age Benefit – provides protection to members who are retired, laid off;
  • Retirement benefits – provides guaranteed income in retirement; and
  • Life insurance – when the participant dies, his heirs can claim the benefits.

The required contribution rate to the pension fund is three percent of the employee’s monthly salary. This is divided between the employer (two percent) and the employee (one percent).

For 2021, the maximum salary base used to calculate pension deductions has been reduced from 8,939,700 rupees (612 USD) to 8,754,600 rupees (599 USD).

The government calculates the maximum salary base using the following formula:

Highest wage limit in 2020 x (1 + Gross domestic population growth rate in 2020)

So:

8,939,700 rupees (612 USD) x (1 + (- 2.07) / 100)) = 8,757,700 rupees (625 USD) (rounded)


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