Benefit of Using EOR Services for Payroll in Indonesia

The benefit of using EOR Services, especially in Indonesia, is that it saves you the stress of learning the conditions of a new country. Especially if you want to navigate a global company. Of course, there are many things that are more of a priority to do right now.

Therefore, the article Benefit of using EOR services for Payroll Management here will be adapted to the context of Payroll in Indonesia.

Flexible Benefits Packages Provided by EOR Service in Indonesia

Image: Freepik

Previously, I will explain a little about what Payroll Management is

Before you read 6 Benefits of Using EOR Service?

  1. What is Payroll Management?

    If quoting from the article Forbes  “Payroll management encompasses the entire process of calculating employee hours, paying employees, withholding taxes and maintaining the financial documentation for your business.”

    This means payroll management is not only about paying employee salaries but also other important aspects such as taxes and documenting your business finances appropriately so they can be used again in the future.

    If you obey “The payroll management process is nothing but a set of regulated steps that are performed in the same order every month to form a payroll cycle.” describes payroll management as a series of regular steps carried out every month to form a payroll cycle. The word steps here explains that the payroll management process must be systematic and can be done repeatedly.

    Similar to “Payroll management is the administrative task of compensating employees for services rendered”

    In very simple terms, payroll management carries out administrative tasks to provide compensation to employees for the services provided. The focus is on the administrative tasks of payroll, ensuring that employees receive proper payment for their work.

    From the 3 sources above, it can be concluded that: Payroll management plays an important role in business operations, tasked with ensuring employees are paid on time and in accordance with applicable regulations.

    If you need Payroll Management you can contact Abhitech here

    Then, I will start to explain again what an Employer of Record (EOR) is.

  2. What Is an Employer of Record (EoR)?

    An Employer of Record (EoR) is a service provider that takes on the responsibility of being the legal employer for your employees in a foreign country, in this case, Indonesia.

    This means they handle payroll, benefits, tax compliance, and HR-related matters on your behalf. EoRs allow you to have a local workforce and establish a legal entity without the complexities and risks associated with direct employment.

    For more details, you can read the Abhitech article here.

    If you already understand Payroll Management and EOR, Abhitech will start discussing the benefits of using EOR Service for Payroll. This is for foreign companies who want to open a company in Indonesia.

Benefit of Using EOR Service in Indonesia - Streamlined Payroll Management

Image: Freepik

6 Benefits of using EOR Services for Payroll

  1. Ensuring Compliance with Local Regulations with EOR Service

    Are you tired of studying local regulations?

    Actually, it’s normal if you feel confused about local regulations in Indonesia. Because it could be that business regulations in Indonesia are very different from the regulations in your previous country.

    For example, Law No. 13 of 2003 which discusses employment.

    Wages or salaries are regulated in PP No. 78 of 2015.

    In 2022 there is “UU CIPTA KERJA”.

    There are still other things that companies must comply. 

    However, whatever the reason, the laws of a country must be obeyed so that your company that wants to develop in Indonesia does not encounter problems. That’s why Ensuring Compliance with Local Regulations is the main point of benefit of using EOR

    Many foreign companies like yours entrust EOR Service to be able to continue Compliance with Local Employment Laws.

    If you want to avoid mistakes in payroll management in Indonesia, Abhitech has created an article here.

  2. Cost Savings and Administrative Efficiency with EOR Service

    Many foreign companies do not want to use EOR Service and Payroll Management, because they feel it will only increase costs.

    It is true that you will be charged for services.

    But, actually, the service costs you pay to save on company operational costs and other administrative burdens.

    How much do you have to pay to invest in Payroll software and also how many staff does your company need?

    Do you know how to filter candidates to get payroll staff that suits your business?

    Suppose you calculate all that and compare it with EOR Service. In that case, it is clear that using EOR Service which includes Payroll Management is more cost-saving and efficient in administrative terms.

    For more details, you can contact the Employer of Record landing page from Abhitech here.

  3. Payroll Management and Accuracy with EOR Service

    When using Payroll Management and EOR services there is no room for them to make mistakes. If a Human Error occurs, your service company must immediately repair it.

    If you work with payroll management who has experience in many companies for decades and really understands the local culture of that country, of course even if they make a mistake, they can quickly fix it.

    In Indonesia, we have the slang “Flying hours don’t lie” which is used when someone is very experienced in a certain field and completes a difficult task with an effortless impression.

    If you believe “experience is the best teacher” Abhitech has learned from many teachers (experience).

  4. Employee Management and Onboarding 

    Good employee management definitely increases job satisfaction and employee retention, reduces turnover and recruitment costs.

    And also if you manage your employees in accordance with labor regulations then your company will definitely avoid fines and legal problems, as we discussed previously.

    EOR Service is not only Payroll Management but also helps handle all administrative aspects related to employee management and onboarding, ensuring all processes comply with applicable employment laws. This includes creating contracts, monitoring work hours, and managing benefits.

    If all of this is fulfilled, you can attract global talent’s attention in Indonesia.

    You can read more about how to attract global talent here.

  5. Scalability and Local Presence, Growth with EOR Service Agency

    Everyone wants their company to grow. However, sometimes companies grow faster than you think.

    In the near future you will need a lot of new employees, but there is no time to recruit yet.

    EOR services allow companies to quickly increase or reduce the number of employees according to business needs without worrying about administrative and legal aspects.

    Why can Employer Of Record (EOR) Service solve this more quickly?

    A good EOR service already has networking and resources to recruit employees quickly according to the company’s needs. 

    As you know EOR services such as whose services are very focused on Indonesia and has an extensive network.

    Why is that the benefit of using EOR Service?

    Networking here can include relationships with authorities, local vendors, and the local business community which is especially useful during periods of rapid growth or projects that may be temporary.

  6. Support and Flexibility

    You will work with others, and EOR Service will be willing to help you if there are problems.

    With experienced support, EOR services help companies overcome various challenges in employee and payroll management, including compliance and administration issues.

    EOR service also has a special team ready to help companies with various HR and payroll problems. This team consists of experts who understand local regulations and the best practitioners.

    When you have worked together, you can ask them directly, and you will get references for solutions to your problems. 

    To read more about Abhitech’s Payroll Service, please click on this page.


Image: FreepikBusiness Efficiency with EOR Service in Indonesia

Conclusion to get The Benefit of Using EOR Service

The benefit of using Employer of Record (EOR) services for payroll management in Indonesia is that it offers many significant benefits for foreign companies looking to operate efficiently and in accordance with local regulations. 

However, because this is quite vital you have to work with those who are experienced. Abhitech has been helping companies in Indonesia manage Payroll for more than 30 years, if you are interested please visit this page.

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