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Severance pay and dismissal in Indonesia: your rights, the tables and the lawful procedure

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

On dismissal, Indonesian employers owe severance, long-service pay and compensation for rights. How to calculate it by years of service; ruling 168/2023.

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

  • On dismissal, the employer must pay severance (uang pesangon) and/or long-service pay (UPMK), plus compensation for rights (Law 13/2003 Article 156 as amended by Law 6/2023).
  • Since Constitutional Court ruling 168/PUU-XXI/2023, the severance table is read as a minimum, not a fixed amount.
  • Severance and long-service pay are multiplied according to the reason for dismissal, for example 0.5 or 1 times the table (PP 35/2021 Articles 41 to 57).
  • If you reject a dismissal and bipartite talks fail, the dismissal is lawful only after a final decision of the industrial dispute body.
  • Dismissed workers can claim Job Loss Insurance (JKP) if they meet the contribution conditions (PP 6/2025).
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On this page
  1. What are a worker's rights on dismissal?
  2. How much severance is due for each length of service?
  3. How much is long-service pay (UPMK)?
  4. What is compensation for rights (uang penggantian hak)?
  5. Is severance the same for every dismissal reason?
  6. How is severance paid when the company goes bankrupt, or the worker retires or dies?
  7. Am I still paid if I am sent home (dirumahkan)?
  8. What is the lawful dismissal procedure?
  9. Which dismissal reasons are prohibited?
  10. Can I claim Job Loss Insurance (JKP)?
  11. What can I do if severance is not paid?
  12. What changes for severance under the new labour law?
  13. What are the severance and long-service pay tables?

What are a worker's rights on dismissal?

When a dismissal (PHK) happens, the employer must pay severance (uang pesangon) and/or long-service pay (UPMK), plus compensation for rights (uang penggantian hak) (Law 13/2003 Article 156(1) as amended by Law 6/2023 Article 81 point 47, and PP 35/2021 Article 40(1)). Which components you receive and their multiplier depend on the reason for dismissal, set in PP 35/2021 Articles 41 to 57. Failing to meet the Article 156(1) duty is a criminal offence under Article 185, with a maximum of 4 years in prison after adjustment by Law 1/2026.

How much severance is due for each length of service?

The basic severance table in Law 13/2003 Article 156(2) as amended, and PP 35/2021 Article 40(2), rises by one month's wage for each year of service: under 1 year earns 1 month's wage, and 8 years or more earns 9 months' wages. Constitutional Court ruling 168/PUU-XXI/2023, delivered on 31 October 2024 (ruling 22), says the table must be read as a minimum. The employer may pay more, but not less than the table times the multiplier for your dismissal reason. The full table is below.

How much is long-service pay (UPMK)?

Long-service pay (uang penghargaan masa kerja, UPMK) starts at 3 years of service. Three to under 6 years earns 2 months' wages, rising every 3 years up to 10 months' wages for 24 years or more (Law 13/2003 Article 156(3) as amended by Law 6/2023, and PP 35/2021 Article 40(3)). Like severance, UPMK is multiplied according to the dismissal reason.

What is compensation for rights (uang penggantian hak)?

Compensation for rights covers what you were entitled to but had not received at dismissal: unused annual leave that has not lapsed, travel costs home for you and your family to where you were hired, and anything else set in the employment contract, company regulation or collective agreement (PP 35/2021 Article 40(4)). Workers who resign also receive it (Article 50).

Is severance the same for every dismissal reason?

No. PP 35/2021 Articles 41 to 57 set the multiplier for each reason. Examples: a merger or split you do not follow, 1 times severance and 1 times UPMK (Article 41); efficiency because the company is losing money, 0.5 times severance and 1 times UPMK (Article 43(1)); efficiency to prevent losses, 1 times severance and 1 times UPMK (Article 43(2)). Workers who resign, or who are absent 5 working days in a row after two proper summonses, receive only compensation for rights and separation pay (Articles 50 and 51). Micro and small businesses set the amounts by agreement (Article 59).

How is severance paid when the company goes bankrupt, or the worker retires or dies?

PP 35/2021 sets the table multipliers for these three reasons. If the company goes bankrupt, the worker is owed 0.5 times severance, 1 times long-service pay and compensation for rights (Article 47). If dismissed on reaching retirement age, the worker is owed 1.75 times severance, 1 times long-service pay and compensation for rights (Article 56). If the worker dies, the heirs receive an amount calculated as 2 times severance, 1 times long-service pay and compensation for rights (Article 57). Since Constitutional Court ruling 168/PUU-XXI/2023, the table amounts are minimums.

Am I still paid if I am sent home (dirumahkan)?

In principle, yes. PP 36/2021 Article 40(2)(d) requires the employer to pay wages if you are willing to do the agreed work but the employer does not let you work through its own fault or an obstacle it could have avoided. Being sent home is not dismissal: a dismissal must be notified by letter at least 14 working days in advance (PP 35/2021 Article 37(3)). Ask for the reason and the length of time in writing; if your wages are not paid, try bipartite talks and then mediation.

What is the lawful dismissal procedure?

The employer must give written notice of the intention and reasons at least 14 working days before dismissal (PP 35/2021 Article 37). If you disagree, reply in writing with reasons within 7 working days of receiving the notice (Article 39(1)). The dispute must then go through bipartite negotiation aimed at consensus (Law 13/2003 Article 151(3) and Constitutional Court ruling 168/PUU-XXI/2023, ruling 19). If it fails, the dismissal may only happen after a final and binding decision of the industrial dispute body (ruling 20). Meanwhile both sides keep their obligations, and a suspended worker still receives wages (Article 157A and ruling 21).

Which dismissal reasons are prohibited?

Law 13/2003 Article 153(1) as amended by Law 6/2023 bans dismissal because a worker: is sick with a doctor's note for no more than 12 continuous months; is fulfilling duties to the state; is worshipping as their religion requires; marries; is pregnant, gives birth, miscarries or breastfeeds; is related by blood or marriage to a colleague; founds, joins or leads a trade union; reports the employer's crime to the authorities; differs in belief, religion, politics, ethnicity, skin colour, group, sex, physical condition or marital status; or is permanently disabled or ill from a work accident with uncertain recovery. Such a dismissal is void by law, and the worker must be taken back (Article 153(2)).

Can I claim Job Loss Insurance (JKP)?

Possibly, if you are a BPJS Ketenagakerjaan member. Under PP 6/2025, JKP can be claimed after at least 12 months of contributions within the 24 months before dismissal (Article 19(3)), and claimants must be willing to work again. JKP is not paid if you resigned, are totally and permanently disabled, retired or died; fixed-term workers qualify if dismissed before the contract ends (Article 20). Cash benefits are paid monthly for up to 6 months (Article 21). Accepted proof of dismissal includes the labour office's receipt of the dismissal report, a joint agreement, or an industrial court decision (Article 20(3)).

What can I do if severance is not paid?

Do not sign anything saying you accept the dismissal and its terms until you have read and understood it. Claim your rights in writing and hold bipartite talks, then register the dismissal dispute with the district or city labour office for mediation or conciliation (Law 2/2004 Articles 3, 4 and 8). If there is no agreement, either side may file a claim with the Industrial Relations Court (Article 5), attaching the mediation or conciliation record (Article 83). A trade union may represent its members in this court (Article 87).

What changes for severance under the new labour law?

Nothing is in force yet. The Ministry of Manpower says the Labour Protection Law, approved by the DPR and the Government on 6 October 2026, includes a severance reserve fund and Job Loss Insurance as a safety net for dismissal. The text is not public, so the amounts and mechanics are unknown. Until the new law takes effect, severance follows Law 13/2003 as amended by Law 6/2023, PP 35/2021 and Constitutional Court ruling 168/PUU-XXI/2023.

What are the severance and long-service pay tables?

Severance pay by length of service (Law 13/2003 Article 156(2) as amended by Law 6/2023; PP 35/2021 Article 40(2)), minimum amounts
Length of serviceSeverance (minimum)
Under 1 year1 month's wage
1 year to under 2 years2 months' wages
2 years to under 3 years3 months' wages
3 years to under 4 years4 months' wages
4 years to under 5 years5 months' wages
5 years to under 6 years6 months' wages
6 years to under 7 years7 months' wages
7 years to under 8 years8 months' wages
8 years or more9 months' wages

Constitutional Court ruling 168/PUU-XXI/2023, ruling 22: this table is a minimum. Multipliers by dismissal reason are in PP 35/2021 Articles 41 to 57.

Long-service pay (UPMK) by length of service (Law 13/2003 Article 156(3) as amended by Law 6/2023; PP 35/2021 Article 40(3))
Length of serviceUPMK
3 years to under 6 years2 months' wages
6 years to under 9 years3 months' wages
9 years to under 12 years4 months' wages
12 years to under 15 years5 months' wages
15 years to under 18 years6 months' wages
18 years to under 21 years7 months' wages
21 years to under 24 years8 months' wages
24 years or more10 months' wages

To calculate with your own wage, use the Panduan Warga severance calculator. Claiming JKP is explained in the Panduan Warga guide to claiming JKP after job loss, and JHT withdrawals in the Panduan Warga JHT balance and claims guide.

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

Frequently asked questions

Do workers who resign get severance?

No. A worker who resigns voluntarily and meets the conditions (written notice at least 30 days ahead, no service bond, working until the leaving date) receives compensation for rights and separation pay (uang pisah) as set in the employment contract, company regulation or collective agreement (PP 35/2021 Article 36(i) and Article 50).

Do fixed-term (PKWT) workers get severance when the contract ends?

The end of a PKWT is not a dismissal that triggers severance. What a PKWT worker receives at the end of the contract is compensation (uang kompensasi) (PP 35/2021 Articles 15 and 16). If the contract is ended early, compensation is still due for the time worked (Article 17).

Can I be dismissed for getting pregnant or married?

No. Law 13/2003 Article 153(1) as amended by Law 6/2023 bans dismissal because of, among other things, marriage, pregnancy, giving birth, miscarriage or breastfeeding. A dismissal on those grounds is void by law, and the employer must take the worker back (Article 153(2)).

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. Undang-Undang Nomor 1 Tahun 2026 tentang Penyesuaian Pidana JDIH BPK RI (peraturan.bpk.go.id) · UU 1/2026 · accessed
  7. Peraturan Pemerintah Nomor 6 Tahun 2025 tentang Perubahan atas PP Nomor 37 Tahun 2021 tentang Penyelenggaraan Program Jaminan Kehilangan Pekerjaan JDIH BPK RI (peraturan.bpk.go.id) · PP 6/2025 · accessed
  8. Undang-Undang Nomor 2 Tahun 2004 tentang Penyelesaian Perselisihan Hubungan Industrial Kementerian Hukum RI (peraturan.go.id) · UU 2/2004 · accessed
  9. Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan Kementerian Hukum RI (peraturan.go.id) · PP 36/2021 · accessed
How to cite

KarirAman (2026). Severance pay and dismissal in Indonesia: your rights, the tables and the lawful procedure. Updated 8 October 2026. https://kariraman.com/en/workers-rights/severance-pay-and-dismissal/

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Change log
  • : Added severance on bankruptcy, retirement or death, wage rights when sent home, and a link to the severance calculator.