All-In Salary Without Benefits: Is It Compliant with Indonesian Regulations?
When reviewing a job offer, candidates may come across an all-in salary scheme, where the total monthly compensation is provided as a single amount without separate allowances such as transportation, meal, or communication benefits. This often raises an important question: Is an all-in salary without additional benefits compliant with Indonesian labor regulations?
The answer is yes, provided that employers comply with applicable employment laws and continue to fulfill employees’ statutory rights.
What Is an All-In Salary?
An all-in salary is a compensation structure in which an employer combines multiple salary components into one fixed monthly payment. Instead of receiving separate allowances, employees receive a single amount that is understood to include those components.
This approach is commonly used for managerial, executive, and professional positions to simplify payroll administration and compensation management.
Is an All-In Salary Allowed in Indonesia?
In principle, an all-in salary scheme is permitted under Indonesian law. This is regulated under Government Regulation (PP) No. 36 of 2021 on Wages (Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan), which governs wage structures and salary components.
Article 12 of PP No. 36 of 2021 states that wages may consist of:
- Wages without allowances;
- Basic wages and fixed allowances;
- Basic wages, fixed allowances, and non-fixed allowances; or
- Basic wages and non-fixed allowances.
This provision indicates that employers may legally implement wages without allowances, which is commonly referred to as an all-in salary, as long as the arrangement complies with prevailing labor regulations.
Furthermore, Article 23 of PP No. 36 of 2021 provides that the minimum monthly wage may consist of either wages without allowances or basic wages plus fixed allowances, meaning that an all-in salary structure itself does not violate Indonesian employment regulations.
Can Employee Benefits Be Eliminated?
Although employers may adopt an all-in salary system, this does not mean that all employee benefits can be removed.
Company-provided benefits such as meal, transportation, or communication allowances may be consolidated into the salary package if this has been clearly agreed upon in the employment contract.
However, employers are still legally required to fulfill employees’ statutory rights, including:
- Religious Holiday Allowance (THR);
- Mandatory participation in BPJS Health and BPJS Employment programs where applicable;
- Overtime pay when employees are eligible under labor regulations; and
- Other statutory employment rights and protections provided by Indonesian law.
In other words, an all-in salary arrangement cannot be used to waive employees’ legal entitlements.
Potential Risks of an Unclear All-In Salary Arrangement
If an all-in salary package is not communicated transparently, employers may face several risks, including:
- Misunderstandings regarding salary components;
- Disputes over overtime calculations or THR payments;
- Potential violations of statutory employment rights; and
- Reduced employer branding due to perceived lack of transparency.
For this reason, companies should clearly explain which compensation components are included in the all-in salary package before employees sign their employment agreements.
Why Compensation Strategy Matters in Recruitment
In today’s competitive talent market, companies need more than attractive salaries—they also need transparent and competitive compensation structures that align with market expectations.
Many organizations work with a headhunter to understand salary benchmarks, employee expectations, and industry compensation trends. Partnering with a headhunter in Jakarta or a headhunter in Indonesia can help businesses attract high-quality professionals while remaining competitive in the labor market.
Read more: 7 Tips to Optimize Boolean Search in the Hiring Process
RecruitFirst Indonesia Can Support Your Hiring Needs
As one of Indonesia’s leading recruitment firms, RecruitFirst Indonesia helps companies identify and secure top talent through strategic recruitment solutions tailored to business needs.
Beyond executive search and recruitment services, RecruitFirst Indonesia also provides valuable insights into salary benchmarking, hiring trends, and employer branding strategies to help organizations strengthen their talent acquisition efforts.
If your company is looking for exceptional professionals or seeking support from an experienced headhunter in Indonesia, contact RecruitFirst Indonesia today and discover how our recruitment experts can help your business hire the right talent for long-term success.
