Check a job ID (Baca halaman ini dalam bahasa Indonesia)

PKWT vs PKWTT: fixed-term and permanent employment contracts in Indonesia

Written by KarirAman editorial team Approved by Kaiser Khan (editor), Updated

A PKWT fixed-term contract lasts at most 5 years including extensions, must be written, has no probation and ends with compensation pay (PP 35/2021).

Legal status: the Labour Protection Law was approved by the DPR and the Government on 6 October 2026 but has not been promulgated and its text is not public. Until it takes effect, the rules on this page apply.

Dewan Perwakilan Rakyat RI (emedia); Kementerian Ketenagakerjaan RI

Summary

  • A PKWT is a fixed-term employment contract; a PKWTT is an open-ended (permanent) contract.
  • A time-based PKWT lasts at most 5 years including extensions (PP 35/2021 Article 8 and Constitutional Court ruling 168/PUU-XXI/2023).
  • A PKWT must be written in Indonesian and Latin script, and may not include a probation period.
  • When a PKWT ends, workers with at least 1 month of service are entitled to compensation (PP 35/2021 Article 15).
  • A PKWT used for permanent work becomes a PKWTT by law (Law 13/2003 Article 59 as amended by Law 6/2023).
Show the full summaryShow less
On this page
  1. What is the difference between a PKWT and a PKWTT?
  2. How long can a fixed-term contract (PKWT) last?
  3. Does a PKWT have to be in writing?
  4. Can a fixed-term (PKWT) worker be put on probation?
  5. When does a PKWT become a permanent contract (PKWTT)?
  6. Are fixed-term workers entitled to compensation?
  7. What are the rights of a contract worker dismissed or resigning before the contract ends?
  8. Can I resign while I am still bound by a service bond?
  9. What other rights do contract workers have?
  10. What if I work through an outsourcing company?
  11. What can I do if my contract rights are breached?
  12. Do PKWT rules change under the new labour law?

What is the difference between a PKWT and a PKWTT?

A PKWT (Perjanjian Kerja Waktu Tertentu) is a contract for a set period or until a specific job is finished. A PKWTT (Perjanjian Kerja Waktu Tidak Tertentu) is an open-ended contract, usually called permanent employment. Law 13/2003 Article 56, as amended by Law 6/2023 Article 81 point 12, distinguishes the two. A PKWT may only be used for work that will end within a certain time: one-off or temporary work, work expected to finish fairly soon, seasonal work, work on a new product or activity still being tested, or work that is not continuous (Article 59(1)). A PKWT may not be used for permanent work (Article 59(2)).

How long can a fixed-term contract (PKWT) last?

A time-based PKWT can be made for at most 5 years. If the work is not finished, it can be extended, but the total period including extensions may still not exceed 5 years, and service counts from the start (PP 35/2021 Article 8). Constitutional Court ruling 168/PUU-XXI/2023, delivered on 31 October 2024, set the same limit at the level of the Act: at most 5 years, including any extension. A PKWT based on completing a specific job ends when that job is done (PP 35/2021 Article 9).

Does a PKWT have to be in writing?

Yes. A PKWT must be written in Indonesian and Latin script (Law 13/2003 Article 57 as amended by Law 6/2023, and Constitutional Court ruling 168/PUU-XXI/2023, ruling 5). If it is bilingual, the Indonesian version prevails. A PKWT must state at least the company's name and address, the worker's identity, job title, workplace, wage amount and payment method, rights and duties, start date and length, and both signatures (PP 35/2021 Article 13). The employer must also register the PKWT online with the Ministry of Manpower (Article 14). Ask for a copy to keep.

Can a fixed-term (PKWT) worker be put on probation?

No. A PKWT may not require a probation period. If a PKWT still includes one, that clause is void by law and your service still counts (Law 13/2003 Article 58 as amended by Law 6/2023, and PP 35/2021 Article 12). So a dismissal on the grounds of failing probation under a PKWT has no legal basis, and that period still counts towards your compensation.

When does a PKWT become a permanent contract (PKWTT)?

Two situations are clearly written. First, a PKWT that does not meet the job-type rules, for example one used for permanent work, becomes a PKWTT by law (Law 13/2003 Article 59(3) as amended by Law 6/2023). Second, a worker on a daily contract who works 21 days or more a month for 3 or more consecutive months becomes a PKWTT worker by law (PP 35/2021 Article 10(4)). If you believe this applies to you, ask for written confirmation, then use bipartite talks and mediation.

Are fixed-term workers entitled to compensation?

Yes. The employer must pay compensation (uang kompensasi) when a PKWT ends (Law 13/2003 Article 61A as amended by Law 6/2023, and PP 35/2021 Article 15) to workers with at least 1 month of continuous service. A 12-month contract earns 1 month's wage; shorter or longer contracts are pro rata, that is months of service divided by 12 times 1 month's wage (Article 16(1)). The basis is the basic wage plus fixed allowances. If a PKWT is extended, compensation is paid at the end of each period (Article 15(4)). If either side ends the contract early, compensation is still due for the time worked (Article 17). For micro and small businesses, the amount is set by agreement (Article 16(6)).

What are the rights of a contract worker dismissed or resigning before the contract ends?

Two rules apply. First, the employer must still pay compensation pay, calculated on the part of the PKWT you have already worked (PP 35/2021 Article 17). Second, the party that ends a PKWT early, other than for the reasons in Article 61(1), must pay the other party damages equal to the wages up to the end of the contract term (Law 13/2003 Article 62, not amended by Law 6/2023). The damages rule works both ways, so a worker who ends the contract early can also be charged. Read your contract and negotiate in writing before you leave.

Can I resign while I am still bound by a service bond?

To resign properly under PP 35/2021 Article 36(i), you must apply in writing at least 30 days ahead, not be bound by a service bond (ikatan dinas), and keep working until your leaving date. A worker who meets these conditions is owed compensation for rights and separation pay (Article 50). If you are still bound by a service bond, for example after a company-funded management trainee programme, first read the agreement, including any damages it states, and ask for an explanation in writing before you resign.

What other rights do contract workers have?

Fixed-term workers have the same basic rights as permanent staff. THR is mandatory for PKWT workers with 1 month or more of service (Manpower Regulation 6/2016 Article 2). Employers must register their workers with BPJS (Law 24/2011 Article 15). The working-hour and overtime rules in PP 35/2021 Articles 21 to 32 apply to all workers. Wages may not be below the applicable minimum wage (PP 36/2021 Article 23). Workers on daily contracts are also entitled to social security (PP 35/2021 Article 11(3)).

What if I work through an outsourcing company?

Your employment relationship is with the outsourcing company, not with the company where you are placed, and it can be a PKWT or PKWTT that must be in writing (PP 35/2021 Article 18). The outsourcing company is responsible for your wages, welfare, working conditions and disputes. If you are on a PKWT and the outsourcing company changes while the work continues, your contract must transfer your protection; if it does not, the outsourcing company remains responsible for your rights (Article 19). Constitutional Court ruling 168/PUU-XXI/2023, ruling 6, leaves it to the Minister to set which work may be outsourced.

What can I do if my contract rights are breached?

Start by asking the employer in writing to explain or meet your rights. These two-party talks, called bipartite negotiation, must be tried first and last at most 30 working days (Law 2/2004 Article 3). If they fail, register the dispute with the district or city labour office with proof of the talks, then go to mediation (Articles 4 and 8). For breaches of legal norms, such as unpaid compensation, you can also complain to labour inspectors at the Ministry of Manpower or the provincial labour office (PP 35/2021 Article 60). Keep your contract, payslips and attendance records.

Do PKWT rules change under the new labour law?

Not yet. The DPR and the Government approved the Labour Protection Law on 6 October 2026, but it has no number, has not been promulgated, and its text is not public. The Ministry of Manpower's ten-point summary of 7 October 2026 does not mention a PKWT time limit. Until the new law takes effect, the rules on this page apply. We will update this page once the official text is published.

Checklist before you sign a PKWT

  • The contract is written in Indonesian and you receive a copy.
  • The work really is temporary, seasonal or due to finish within a set time, not permanent work.
  • The contract length, including any planned extension, is no more than 5 years.
  • There is no probation clause.
  • The contract states the job title, workplace, wage, payment method, and start and end dates.
  • The wage is not below the minimum wage where you work.
  • You are not asked to hand over your original diploma or personal documents as a guarantee.
  • Nobody asks you for money to get the job or to renew the contract.

Check the minimum wage where you work at Indonesia minimum wage. If you are asked for money or for your documents, read Withheld diplomas and check the job ad with Check a job.

If you are not an Indonesian citizen, a separate permit system applies before any contract: read Working in Indonesia as a foreigner.

Not legal advice. For your own case, contact the official channels listed.

Frequently asked questions

Can a PKWT be extended again and again?

No. A time-based PKWT can be extended, but the total length including extensions may not exceed 5 years (PP 35/2021 Article 8(2)). Service counts from the start of the first fixed-term contract.

Do contract workers get THR and BPJS?

Yes. Manpower Regulation 6/2016 Article 2 makes THR mandatory for both PKWTT and PKWT workers with 1 month or more of service. Law 24/2011 Article 15 requires employers to register their workers with BPJS, whether on fixed-term or permanent contracts.

Is it true the PKWT limit has changed under the new labour law?

Not confirmed. The DPR approved the Labour Protection Law on 6 October 2026, but its text is not public and the Ministry of Manpower's official summary does not mention a PKWT time limit. Until the new law takes effect, the limit stays at 5 years including extensions.

Who wrote and reviewed this page?

Written by KarirAman editorial team Published Updated

Prepared with AI assistance. Checked against official sources and approved for publication by Kaiser Khan (editor). Approval date: .

Sources

The facts on this page come from these sources. Dates show when we opened them.

  1. DPR Sahkan UU Pelindungan Ketenagakerjaan (emedia DPR RI, 7 Oktober 2026) Dewan Perwakilan Rakyat RI (emedia) · accessed
  2. Menaker Ungkap Poin Penting UU Pelindungan Ketenagakerjaan yang Wajib Diketahui Pekerja Kementerian Ketenagakerjaan RI · accessed
  3. Undang-Undang Nomor 6 Tahun 2023 tentang Penetapan Perppu Nomor 2 Tahun 2022 tentang Cipta Kerja menjadi Undang-Undang Kementerian Hukum RI (peraturan.go.id) · UU 6/2023 · accessed
  4. Peraturan Pemerintah Nomor 35 Tahun 2021 tentang Perjanjian Kerja Waktu Tertentu, Alih Daya, Waktu Kerja dan Waktu Istirahat, dan Pemutusan Hubungan Kerja Kementerian Hukum RI (peraturan.go.id) · PP 35/2021 · accessed
  5. Putusan Mahkamah Konstitusi Nomor 168/PUU-XXI/2023 (pengujian UU 6/2023, klaster ketenagakerjaan) Mahkamah Konstitusi RI · accessed
  6. Peraturan Menteri Ketenagakerjaan Nomor 6 Tahun 2016 tentang Tunjangan Hari Raya Keagamaan bagi Pekerja/Buruh di Perusahaan JDIH BPK RI (peraturan.bpk.go.id) · Permenaker 6/2016 · accessed
  7. Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan Kementerian Hukum RI (peraturan.go.id) · PP 36/2021 · accessed
  8. Undang-Undang Nomor 24 Tahun 2011 tentang Badan Penyelenggara Jaminan Sosial JDIH BPK RI (peraturan.bpk.go.id) · UU 24/2011 · accessed
  9. Undang-Undang Nomor 2 Tahun 2004 tentang Penyelesaian Perselisihan Hubungan Industrial Kementerian Hukum RI (peraturan.go.id) · UU 2/2004 · accessed
  10. Undang-Undang Nomor 13 Tahun 2003 tentang Ketenagakerjaan (Pasal 62) Badan Pemeriksa Keuangan RI (JDIH BPK) · UU 13/2003 Pasal 62 · accessed
How to cite

KarirAman (2026). PKWT vs PKWTT: fixed-term and permanent employment contracts in Indonesia. Updated 8 October 2026. https://kariraman.com/en/workers-rights/pkwt-pkwtt-employment-contracts/

Save this page

Report a fake job Report a data problem How we handle corrections

Change log
  • : Added rights when a contract ends early (PP 35/2021 Article 17 and Law 13/2003 Article 62), resigning under a service bond, and a link to the compensation calculator.