Indonesia’s BPJS Ketenagakerjaan announced on March 1, 2025 an adjustment to the maximum wage limit for the Indonesia Pension Insurance Program or the Jaminan Pensiun (JP), increasing the ceiling by 5.03% to Rp. 10,547,400 per month. The change, effective immediately, is based on Indonesia’s 2024 Gross Domestic Product (GDP) growth rate, as required under Government Regulation No. 45 of 2015.
Annual Wage Ceiling Adjustment Based on GDP Growth
Under Article 29 of Government Regulation No. 45 of 2015, the maximum wage limit for JP contributions is adjusted annually using a multiplying factor of one plus the previous year’s GDP growth rate.
According to Indonesia’s Central Statistics Agency (BPS), the country’s GDP growth for 2024 was 5.03%, as stated in Official Release No. 17/02/Th. XXVIII, dated February 5, 2025. As a result, BPJS Ketenagakerjaan issued Notification No. B/91/022025, confirming the updated wage ceiling, which increased from Rp. 10,042,300 to Rp. 10,547,400.
This adjusted ceiling serves as the basis for calculating pension security contributions, impacting both employers and employees.
Read more: Indonesia Payroll Guide: Compliance and Best Practices
Implications for Employers and Employees
With the new wage ceiling in effect, contributions to the Jaminan Pensiun (JP) program will be adjusted as follows:
- Employer Contribution: 2% of the monthly wage (capped at Rp. 10,547,400)
- Employee Contribution: 1% of the monthly wage (capped at Rp. 10,547,400)
For employees earning above the new ceiling, pension contributions will only be calculated up to the limit of Rp. 10,547,400.
Regulatory Compliance and Effective Date
The statutory compliance notification was issued on February 27, 2025, and the updated wage limit took effect on March 1, 2025. Employers must ensure payroll systems and pension contributions are updated in accordance with the revised ceiling.
Failure to comply with BPJS Ketenagakerjaan regulations could result in penalties or administrative sanctions. Businesses are advised to review their payroll processes and consult with HR and compliance professionals to ensure seamless implementation.
Read more: The Role of HR in Ensuring Statutory Compliance: How Employer of Record Services Can Help
Conclusion
The annual adjustment of the JP wage ceiling reflects Indonesia’s steady economic growth and aligns with the government’s commitment to ensuring pension contributions remain relevant to rising wages. Employers and HR teams should promptly implement these changes to maintain compliance with BPJS Ketenagakerjaan regulations. For further details, businesses may refer to BPJS Ketenagakerjaan’s official notification or consult with payroll and labor law experts.
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