Key Takeaways 

  • EORs help businesses that don’t own entities in Bali to legally hire employees there.
  • Bali EORs handle all HR functions for their clients, including onboarding, payroll, and benefits administration.
  • Effective EORs have experience hiring in Bali and maintain compliance with all local employment and tax laws.
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Considering hiring an employee in Bali or perhaps even a full team? If you are, there’s a lot you need to know about hiring and employing workers in this province of Indonesia. Bali is a large island just off the coast of Java, Indonesia. Unlike most other provinces that follow Islam, Bali is distinct because of its Balinese Hindu religion, unique culture, and architecture. With its diverse geography, including excellent surfing beaches and stunning mountains, Bali has become a premier tourist destination, and a large proportion of its gross regional domestic product comes from this industry.

Bali is home to a population of over four million and is increasingly popular with expats and remote workers. For these reasons, Bali can be an excellent source of talented workers in the region. If you want Balinese employees to join your workforce, there are a few options for you, including working with an EOR or Employer of Record that hires workers on your behalf. In this guide, we’ll examine how Bali EORs work, whether this service is right for you, and how they aid in effectively hiring workers in Bali.

What is a Bali EOR?

An Employer of Record (EOR) in Bali acts as the legal employer for your team, handling all employment responsibilities while you focus on managing daily operations and employee performance. The EOR takes care of onboarding, payroll in Indonesian Rupiah (IDR), tax compliance, and benefits, allowing you to expand your workforce in Bali without needing to establish a legal entity on the island.

Why Partner with an EOR company in Bali?

Bali Employer of Record
  • Seamless Payroll in IDR: Ensure your employees are paid accurately and on time, with full compliance to local wage regulations and employment standards.
  • Access to Local Talent: Tap into Bali’s growing talent pool in tourism, hospitality, and creative industries without dealing with the complexities of local hiring.
  • Flexible Growth Model: Scale your operations quickly, taking advantage of Bali’s economic opportunities without long-term infrastructure commitments.
  • Minimized Risk: From contract management to dispute resolution, an EOR reduces the risks associated with employment and ensures you remain compliant with local labor laws.

With an EOR service in Bali, you can harness the island’s potential as a hub for business and creativity while simplifying workforce management and minimizing overhead.

Ready to get started with a Bali EOR?

Let us handle the complexities of hiring, compliance, and payroll in Bali while you focus on growing your team.

  • Hire employees in Bali with a Bali EOR
  • No local entity is needed
  • Pricing starts at USD 199 per employee
  • Remote People can also help you find the best talent in Bali

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How Does a Bali Employer of Record Arrangement Work?

By using an EOR service in Bali, businesses do not need to form their own legal entity in Indonesia, which is especially helpful for companies entering Bali’s economy, heavily driven by tourism, hospitality, and emerging tech ventures.

Within this setup, the Bali EOR usually manages several critical tasks:

  • Drafting and finalizing employment contracts in line with Indonesian labor laws
  • Processing payroll in Indonesian Rupiah, ensuring proper withholdings for income tax (administered by the Directorate General of Taxes)
  • Contributing to BPJS (Badan Penyelenggara Jaminan Sosial), which covers both healthcare (BPJS Kesehatan) and employment-related social security (BPJS Ketenagakerjaan)
  • Monitoring mandatory benefits such as annual leave, overtime pay, and severance—particularly important in the hospitality sector
  • Additional HR support, such as work permits and Bali recruitment. 

Because Bali’s tourism market is dynamic, staffing needs may fluctuate, and an EOR can help businesses scale quickly without setting up a formal local entity. The EOR tracks any legislative updates or administrative procedures that could affect employee management, ensuring full compliance with Indonesian labor standards. This diligence minimizes the chance of fines or legal disputes for overseas companies unfamiliar with local statutes.

Meanwhile, the client company retains ownership of daily operations, directing on-the-ground staff and overseeing performance. The EOR steps in to handle official employer responsibilities: generating employment contracts, managing statutory contributions, and ensuring payroll accuracy. Ultimately, partnering with a Bali EOR allows organizations to focus on strategy and service delivery in one of Indonesia’s most vibrant markets, while leaving HR and compliance matters in experienced hands.

Bali EOR vs Bali Legal Entity

Once you have workers selected, or even sometimes before, you’ll need to decide how to employ them. One option is to set up a legal entity in Bali, which can be complex and time-consuming. Another option is to work with an EOR company that can hire employees on your behalf. You should look at these two options in-depth before choosing what’s best for your organization.

Bali, as an Indonesian province, follows the general laws of Indonesia with some slight provincial differences. To set up an entity here, you’ll need to go through the lengthy process of navigating these laws. However, registering an entity can be a good idea if you want to work in the local market in Bali and/or wish to employ Bali workers for an extended period of time. If you want to learn about setting up an entity in Bali, there are many things to know about the process and local governance. 

For the most part, companies set up PT PMAs (Perseroan Terbatas Penanaman Modal Asing), which translates to foreign-owned limited liability companies. To open a PT PMA in Bali or elsewhere in Indonesia, you need to have at least two shareholders, but these can be individuals or legal entities. There is no restriction on nationality for the shareholders. However, wholly-foreign-owned companies are limited to certain industries. In Bali, that means only tourism, hospitality, real estate, manufacturing, agriculture, trade, and services. In addition, the director of a PT PMA needs to be a resident of Bali. To open a PT PMA, the shareholders must register 10 billion IDR (Indonesian Rupiah, roughly 660,000 USD) in initial capital, which is a limitation for many foreign investors.

To register a PT PMA in Bali, the only type of entity that foreign investors can own, you’ll need to follow these steps:

  • Choose and reserve a company name with the Ministry of Law and Human Rights
  • Select an industrial business classification code (KBLI) based on your type of business activities
  • Register your legal entity by creating a Deed of Establishment and having this ratified by the Ministry of Law and Human Rights
  • Obtain a taxpayer identification number (NPWP) and tax registration certificate from the local tax office
  • Obtain a declaration of domicile from the regency or city government
  • Apply for a Business Identification Number (NIB) through the Online Single Submission (OSS) system. This will automatically register your company for health and social security benefits

This process can be costly and time-consuming. In a 2020 review, the World Bank gave Indonesia a low score of 69.6/100 for ease of set-up and a ranking of 73rd in the world.

Working with an EOR firm in Bali is often a more effective option. Since a Bali EOR already has a registered entity that will hire employees on your behalf, getting people hired, onboarded, and working can be much quicker. These service providers typically don’t charge initial start-up costs but instead assess monthly fees for their services. The cost of managing your employees and ensuring compliance with all local labor laws through an EOR can add up. However, it’s usually a better choice for businesses that want to hire small numbers of employees in Bali, or that won’t be working in this market for a long time. Conversely, hiring staff through an EOR can also be a good first step for testing the waters in Bali before committing to creating an entity.

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How Does a Bali Employer of Record Help with Payroll and Taxes?

Managing payroll and taxes in Bali (and across Indonesia) can be complex due to detailed local regulations, tax obligations, and mandatory benefit contributions. A Bali Employer of Record (EOR) takes this burden off your plate, ensuring everything is calculated and processed accurately and compliantly.

Today, most Bali EOR providers use modern online platforms to automate payroll calculations. However, they still rely on accurate input from either the employer or employees to properly track working hours, paid leave, overtime, and bonuses. Some EOR platforms come with built-in time and attendance systems, allowing employees to log hours directly. Others require the client to submit payroll data in an agreed-upon format each pay period.

Once the data is received, the EOR:

  • Calculates gross and net salaries
  • Withholds and remits income taxes according to Indonesian law
  • Calculates mandatory contributions for BPJS Kesehatan (health insurance) and BPJS Ketenagakerjaan (employment social security)
  • Ensures that religious holiday bonuses (THR) and other statutory payments are included
  • Pays all taxes and social contributions to the appropriate Indonesian authorities on time

By working with an experienced EOR, companies avoid payroll errors, missed tax deadlines, and compliance risks, ensuring their teams in Bali are paid accurately, legally, and on time.

How Does a Bali Employer of Record Help with Benefits Administration?

Any EOR provider that works in Bali should be familiar with the mandatory benefits required in Bali. Workers are entitled to paid time off (PTO), family and maternity leaves, as well as insurance through the Indonesian Social Security Authority. The EOR will calculate deductions from employees’ salaries and your employer contributions and pay these regularly to that authority. It will also help to manage leave scheduling, often by providing an employee portal that lets employees request time off and managers approve or deny these requests.

What Labor Laws Apply to Hiring in Bali?

Bali’s labor laws aren’t specific to this island province and follow Indonesian national laws in most respects. These are the main points of law in Bali that you should be aware of whether you’re hiring employees through an EOR or your own entity:

Employment Contracts

Contracts in Bali can be either written or oral. They should include the following information in order to be legally binding: the name, address, and line of business of the employer; name, sex, age, and address of the worker; type of job; place of work; amount of wages and how they’re paid; rights and obligations of both the employer and the worker; start date and term of contract; and the place and date of the signing. Fixed-term contracts are now possible for up to five years in Bali and can be renewed.

Working Hours and Paid Holidays

Bali employees work a 40-hour work week spread over either five or six days. Any hours over this are overtime and must be paid at the rate of at least 150% of the hourly wage for the first hour and 200% for subsequent hours. Employees can work a maximum of four hours per day and 18 hours per week, and all overtime must be performed according to a written agreement.

BPJS Ketenagakerjaan and BPJS Kesehatan

The BPJS Ketenagakerjaan (Social Security Agency) provides work accident, death, and survivors’ insurance as well as old age savings and pensions. The BPJS Kesehatan (Social Security Agency on Health) provides public healthcare coverage. These are the two important national organizations administering social security in Indonesia that both employers and employees must make contributions to. Combined, employees must pay 4% of their salaries for these benefits, and employers contribute an additional 6.24-7.74%.

Workers’ Compensation

Worker’s compensation is included in the BPJS Ketenagakerjaan coverage discussed above. This provides compensation to workers for total and partial disabilities and to survivors in the case of the worker’s death. A lump sum of 60% of the worker’s salary for 80 months is paid to the family.

 

If a worker contracts a work-related illness or disability and can’t work after 12 months, they must receive double their normal severance pay in addition to service recognition pay. 

Learn more

Taxes (Directorate General of Taxes)

Personal income tax in Bali is on a progressive scale from 5-35% depending on income level. Employers must withhold these taxes and then submit them to the Directorate General of Taxes. 

Parental Leave

Expecting mothers are entitled to 90 days of fully paid maternity leave. Their contracts also cannot be terminated for six months after having given birth. Fathers are allowed two days of paternity leave after the birth of a child to be fully paid by the employer. There is no other parental leave stipulated by the state.

Probation Periods

Probation periods can last up to three months. During this time, a worker cannot be paid less than the minimum wage. In Bali, that’s 2,813,672 IDR/month (around 185 USD). However, each regency (district) and the city of Denpasar have their own minimum wages, which are the same or higher.

Union Membership

Union membership is a right for all Indonesians, which of course includes Balinese workers. Employers must provide opportunities for officials and members of trade unions to carry out activities during working hours as agreed by both sides.

Employment Termination

Employers can terminate workers for gross misconduct or unjustifiable absences. In other cases, notice of 14 days must be given to the employee and/or their union. Severance pay must also be given in the amount of one month’s salary for each year worked. 

How Much Does a Bali Employer of Record Service Cost?

The cost of partnering with an Employer of Record (EOR) in Bali typically starts at around $599 per employee per month. However, the total cost can vary depending on several factors, including the complexity of the services you need, the level of employee support required, and the EOR provider’s pricing structure.

Some EORs charge a flat monthly fee that includes all essential services, such as employment contracts, payroll management, tax compliance, and statutory benefits administration, while others offer a more modular pricing model. In a modular setup, services like advanced HR support, visa and work permit processing (KITAS), or enhanced employee benefits packages may incur additional charges.

Key factors that can impact the overall cost include:

  • The number of employees you plan to hire
  • Seniority and salary levels of employees
  • Whether expatriate employee support (such as work visa sponsorship) is needed
  • Any customized HR or reporting services requested
Even with additional service costs, using a Bali EOR is often far more affordable and efficient than establishing a local entity (such as a PT PMA), which can involve significant upfront costs, legal fees, and ongoing compliance burdens.

Is Employer of Record Legal in Bali?

Yes, using an Employer of Record (EOR) is fully legal in Indonesia, including in the province of Bali. Indonesian employment laws recognize EOR arrangements as a legitimate way for foreign companies to hire local employees without needing to set up a foreign-owned entity (PT PMA) or branch office.

However, to operate legally, the EOR must be properly licensed under Indonesian labor regulations and must comply with all local requirements, including managing employment contracts in Indonesian (Bahasa Indonesia), paying mandatory social security contributions (BPJS), withholding the correct taxes, and respecting employee rights under the Indonesian Labor Law (Law No. 13 of 2003 and its updates).

What Are the Pros and Cons of a Bali Employer of Record?

Before choosing a Bali Employer of Record (EOR), it’s important to understand both the advantages and potential trade-offs. While an EOR offers a fast and compliant way to hire in Bali, there are also a few limitations to consider based on your company’s long-term goals.

  • Pros

Efficient Hiring

Speeds up the hiring and onboarding process

Legal Compliance

Ensures full adherence to local employment laws

Streamlined Administration

Reduces administrative workload for easier management

  • Cons

Higher Long-Term Costs

Fees can become significant over time

Reduced Control

Limited direct oversight over employee management

Hire in Bali the Smart Way with Remote People’s EOR Services

Partnering with an Employer of Record (EOR) in Bali is the fastest, most cost-effective way to build your local team without the time, expense, or risk of setting up a legal entity. An experienced EOR handles all the heavy lifting – managing employment contracts, payroll, taxes, and compliance with Bali’s labor laws – while you stay focused on growing your business.

With Remote People’s trusted EOR services, you can hire top talent in Bali quickly, stay fully compliant, and avoid costly mistakes.

Looking to grow your team in Bali? Follow these easy ways to hire seamlessly and stay fully compliant with the help of an Employer of Record (EOR).

Contact us today to discuss how an EOR can support your business expansion in Bali.

FAQs About Employer of Record (EOR) Services in Bali

Yes. With a Bali Employer of Record (EOR), you can legally hire employees without setting up your own PT PMA (foreign-owned entity) in Indonesia. The EOR acts as the official legal employer, handling compliance while you manage the employee’s day-to-day work.

Employees in Bali are entitled to benefits such as BPJS health insurance, employment social security (BPJS Ketenagakerjaan), annual paid leave, religious holiday bonus (THR), and severance pay if employment ends. A trusted EOR ensures these benefits are calculated and administered correctly.

Onboarding through a Bali EOR can typically be completed in as little as a few days to two weeks, depending on documentation and whether work permits (KITAS) are required. Using an experienced EOR speeds up the process significantly.

A Bali EOR protects your company from risks like labor law violations, incorrect tax filings, mismanagement of social security contributions, and visa or work permit compliance issues. This reduces the chances of fines, penalties, or employment disputes.