Changes To Social Security Rates In Indonesia For 2021

Indonesia has implemented new social security rates for 2021, which will impact the health and pension premiums.

The government has increased the premium for Class III healthcare facilities for non-employees from 25,500 rupiah (US$1.74) to 35,000 rupiah (US$2.39) in addition to reducing the maximum wage base for pensions from 8,939,700 rupiah (US$612) to 8,754,600 rupiah (US$599).

Indonesia’s social security programs are run by two organizations – the Social Security Administrator for Health (BPJS Kesehatan) for healthcare and the Workers Social Security (BPJS Ketenagakerjaan) for pensions. The country launched its universal healthcare and pension programs in 2014, mandating every citizen and expatriate to join.
The healthcare program is said to be the world’s largest single-payer national health insurance program, covering 83 percent of the country’s 270 million population.  Those registered with the program are eligible to receive a range of treatments from organ transplants to dental care to physiotherapy.

Healthcare Class Facilities

The BPJS Kesehatan system is divided into three classes: Class I, II, and III, which determine the type of room a patient receives; Class I qualifies the largest and shares with one or two other patients. The level of treatment is the same regardless of class type.

What are the premiums for employees?

Five percent of an employee’s monthly salary will go towards paying for the healthcare premium, with a salary cap of 12 million rupiah (US$821).

Workers in the private sector will pay one percent, and the remaining four percent will be paid by their employer. For civil servants, the government contributes three percent, and the employee, two percent. Further, the premium covers the employee’s spouse and three dependent children up to the age of 21.

What are the premiums for non-employees?

The premiums for non-employee/self-employed members are as follows:

• Class I — 150,000 rupiah (US$10.26) per person, per month;
• Class II — 100,000 rupiah (US$6.84) per person, per month; and
• Class III — 35,000 rupiah (US$2.39) per person, per month.

For those paying for Class III, the government will top up an additional 7,000 rupiah (US$0.47)

How do you calculate pension premiums for employees?

The pension program covers the following:

• Work compensation – provides protection for accidents occurring during or as a result of work;
• Old age benefits – provides protection for participants that are in retirement, laid off;
• Pension benefits – provides guaranteed income in retirement; and
• Life insurance – upon the death of the participant, their heirs can claim the benefits.

The required rate of contribution to the pension fund is three percent of the employee’s monthly wages. This is divided between the employer (two percent) and the employee (one percent).

For 2021, the maximum wage base used to calculate pension deductions has been decreased from 8,939,700 rupiah (US$612) to 8,754,600 rupiah (US$599).

The government calculates the maximum wage base through the following formula:

Highest wage limit in 2020 x (1+Gross domestic population growth rate in 2020)

Therefore:

8,939,700 rupiah (US$612) x (1+(-2.07)/100)) = 8,757,700 rupiah (US$625) (rounded up)