Article 1 paragraph (1) of Law Number 24 of 2011 regarding the Social Security Administration Agency (“UU 24/2011”) establishes a legal entity to administer social security programs, consisting of BPJS Ketenagakerjaan (Employment Insurance) and BPJS Kesehatan (Health Insurance). BPJS Ketenagakerjaan functions to administer programs for work accident insurance, old-age benefits, pension benefits, and death benefits. On the other hand, BPJS Kesehatan administers health insurance programs.
Article 14 of UU 24/2011 mandates that everyone, including foreigners working for at least six months in Indonesia, must participate in social security programs (BPJS Ketenagakerjaan and BPJS Kesehatan). Employers are gradually required to register themselves and their employees as BPJS participants, according to the social security programs they follow.
Workers have the right to register themselves as participants of the social security program at the expense of the employer if the employer has clearly not registered their workers with BPJS. More specifically, employers who employ ten or more workers or pay wages of at least IDR 1 million per month must enroll their workers in the social security program.
In administering BPJS Ketenagakerjaan and BPJS Kesehatan programs, BPJS contribution collections are enforced. Thus, BPJS payments are financial payments that must be paid by participants and employers in Indonesia to the BPJS institution. The function of these payments is to finance the social security programs offered by BPJS Ketenagakerjaan and BPJS Kesehatan.
Employment Insurance Payments
The calculation of BPJS Ketenagakerjaan payments in Indonesia is relatively straightforward and based on a certain percentage of the worker’s gross salary. However, before discussing the calculation, it’s important to note that there are several categories of membership in BPJS Ketenagakerjaan.
Firstly, Wage Recipients (PU), who are individuals employed and remunerated by an employer. This category covers services such as Work Accident Insurance (JKK), Death Insurance (JKm), Old-Age Insurance (JHT), Pension Insurance (JP), and Employment Loss Insurance (JKP). Secondly, Non-Wage Recipients (BPU), who are workers engaged in economic activities independently to earn income. The services provided by BPJS for this category include Work Accident Insurance (JKK), Death Insurance (JKm), and Old-Age Insurance (JHT).
Thirdly, Construction Service participants, who are providers of planning consultancy services for construction work, construction work services, and supervisory consultancy services for construction work. The services obtained by this category include Work Accident Insurance (JKK) and Death Insurance (JKm). Fourthly, Indonesian Migrant Workers, who are Indonesian citizens working and earning wages outside the Republic of Indonesia. The services received include Work Accident Insurance (JKK), Death Insurance (JKm), and Old-Age Insurance (JHT).
Work Accident Insurance (JKK) is a protection program in the form of cash and/or medical coverage provided when participants experience work accidents or diseases caused by the work environment. The JKK contribution rate for PU participants paid by the employer ranges from 0.24% to 1.74% of the monthly salary or wage according to the level of work risk, while for BPU participants it is 1% of income, with a minimum contribution amount of IDR 10,000 to IDR 207,000.
Death Insurance (JKm) is a protection program in the form of cash provided to the heirs of participants when the participant dies not due to work accidents or occupational diseases. The JKm contribution rate for PU participants paid by the employer is 0.30% of the monthly salary or wage, and for non-wage recipients, the contribution rate is IDR 6,800 per month.
Furthermore, for workers in the construction services field, JKK payments are paid by the service provider in stages or at once. If the payment is made in stages, the first contribution is 50% of the total contribution, and the second and third payments are each 25% of the total contribution. Meanwhile, JKK and JKm payments for Indonesian migrant workers, according to Regulation of the Minister of Labor No.4 of 2023 concerning Social Security for Indonesian Migrant Workers, are IDR 37,500 before working, IDR 332,500 during and after working for work agreements with a duration of 24 months, IDR 189,000 for work agreements with a duration of 12 months, and IDR 108,000 for work agreements with a duration of 6 months, with the condition that payment is made as soon as possible before departure. If the work agreement exceeds the specified duration, JKK and JKm payments are IDR 13,500 per month and are paid in full according to the excess duration of the work agreement.
Old-Age Insurance (JHT) is a protection program in the form of cash paid in a lump sum when participants reach retirement age, die, or suffer permanent total disability. The JHT contribution for PU participants is 5.7% of the monthly salary or wage, where 3.7% is paid by the employer and 2% is paid by the worker. The JHT contribution amount for BPU participants is 2% of income, with a minimum contribution amount of IDR 20,000 to IDR 414,000. Meanwhile, Indonesian migrant workers who want to prepare for their retirement savings can also participate in the Old-Age Insurance (JHT) program by paying additional payments starting from IDR 50,000 to IDR 600,000.
Pension Insurance (JP) is a protection program organized to maintain a decent standard of living when participants lose or reduce their income due to reaching retirement age or suffering permanent total disability. The JHT contribution for PU participants is 3% of the monthly salary or wage, where 2% is paid by the employer and 1% is paid by the worker.
Employment Loss Insurance (JKP) is a guarantee provided to workers/laborers who experience termination of employment with the aim of maintaining a decent standard of living when workers lose their jobs. Workers can meet basic living needs adequately when facing the risk of termination of employment while trying to find new employment. The JKP contribution amount as stipulated in Government Regulation No.37 of 2021 concerning the implementation of the Employment Loss Insurance program is 0.46% of the monthly salary or wage of the worker reported by the company to BPJS Ketenagakerjaan, where 0.22% is borne by the Central Government, 0.14% is sourced from the recomposition of JKK program payments, and 0.10% is sourced from the recomposition of JKm program payments.
Social Health Insurance Payments
Referring to Presidential Regulation Number 64 of 2020 concerning the Second Amendment to Presidential Regulation Number 82 of 2018 concerning Health Insurance (“Perpres 64/2020”), BPJS contribution participants are categorized into three, namely Premium Assistance Recipients (PBI), Wage Recipient Workers (PPU), as well as Non-Wage Recipient Workers (PBPU) and Non-Workers (BP). The amount of BPJS Kesehatan payments varies according to the category of its Participants.
Firstly, PBI participants are people categorized as poor and unable to afford payments. The PBI participant contribution is IDR 42,000, paid by the Central Government with payments from Regional Governments according to the fiscal strength of each region. Thus, it can be said that PBI participants for health insurance are not charged to the participants.
Secondly, PPU participants are every person who works for an employer and receives a salary or wage, such as state officials, leaders and members of the Regional People’s Representative Council (DPRD), Civil Servants (PNS), Soldiers (members of the TNI), members of the Police, village heads and village apparatus, private employees, and other workers or employees who receive a salary or wage from the employer. The contribution for PPU participants is 5% of the monthly salary or wage, where 4% is paid by the employer and 1% is paid by the participant. For additional family members of PPU participants, such as the 4th child and subsequent children, father, mother, and parents-in-law, an additional contribution of 1% of the monthly salary or wage per person per month will be charged, where this contribution is paid by the PPU participant.
The salary or wage used as the basis for calculating the contribution consists of basic salary or wage and fixed allowances, namely allowances paid to workers without considering the presence of the worker. The highest limit of the monthly salary or wage used as the basis for calculating the contribution amount for PPU participants is IDR 12,000,000 (twelve million rupiahs). Meanwhile, the lowest limit of the monthly salary or wage used as the basis for calculating the contribution amount for PPU for private employees is the minimum wage of the regency/city. If the Regional Government does not stipulate the minimum wage of the regency/city, the basis for calculating the contribution amount is the provincial minimum wage.
Thirdly, PBPU and BP participants are workers outside the employment relationship or independent workers, workers who are not salary or wage recipients, investors, employers, and non-workers who can afford to pay payments. The contribution for PBPU and BP participants is IDR 35,000 per person per month, paid by the participant and IDR 7,000 paid by the government for class III, IDR 100,000 per person per month for class II, and IDR 150,000 per person per month for class I, paid by the participant or other parties on behalf of the participant. Fourthly, for Veterans, Independence Pioneers, and widows, widowers, or orphans of Veterans or Independence Pioneers, the contribution set is 5% of 45% of the basic salary of Civil Servants (PNS) in grade III/a with 14 years of service per month, where this contribution is paid by the government.
