By Indonesia is expected to remove the US$1,200 annual hiring fee for foreign nationals married to Indonesians for at least five years, according to Indonesia Expat. The fee, officially the Foreign Worker Compensation Fund (DKP-TKA) and derisively called the “expat tax”, is paid by employers when they obtain a foreign worker utilisation plan, or RPTKA. The exemption is reportedly contained in the new Labour Protection Law passed by the House of Representatives on 6 October 2026. The final text had not been published as of mid-October, and the law is expected to be signed by the president in November before publication in the State Gazette.
The same exemption may also apply to working-age children of mixed marriages. Manpower Minister Yassierli listed the change as one of 13 breakthroughs in the law, describing it as “the optimization and regulation of foreign workers who are legally married to Indonesian citizens, including children born from those legal marriages.” The Indonesian Mixed Marriage Society (PerCa) said the law “carves a new history for mixed-marriage families.” Employers and lawyers caution that implementing regulations could take months or years to appear.
What the fee actually is and who pays it
The DKP-TKA is a mandatory payment in the RPTKA process. Employers pay US$100 per month of the RPTKA validity period, capped at US$1,200 for 12 months. The fee is classified as non-tax state revenue and is supposedly earmarked for training Indonesian workers. Payment must be made in US dollars, and Indonesian authorities are known to reject creased or worn banknotes, a practical detail that payroll teams in Indonesia have long had to manage.
The fee sits alongside other obligations under the RPTKA regime. Employers must still obtain the RPTKA itself, then a work permit notification, and the foreign national must hold a valid stay permit. The fee exemption, if it comes into force as reported, would reduce the cost of hiring a qualifying foreign spouse but would not remove the underlying permit requirements.
The contradiction this change resolves
The reported exemption addresses a long-standing conflict between immigration law and manpower ministry practice. The 2011 Immigration Law gives foreign spouses holding a spouse-sponsored limited stay permit (ITAS) or permanent stay permit (ITAP) the right to work or run a business to support their families. In practice, the Manpower Ministry has often required a corporate sponsor and an RPTKA before a foreign spouse could take formal employment, triggering the US$1,200 fee.
The ministry has already moved part of the way. It recently clarified that foreign spouses running their own micro or small businesses do not need RPTKA approval. The new law appears to extend that logic to salaried employment for those married at least five years. One unnamed expat director quoted by Indonesia Expat said his company, which supplies foreign English teachers to international and private schools, had struggled for years under “incredibly strict hiring quotas and exorbitant compliance costs.” He said officials had found ways to ensure the company “paid heavily” even when hiring permanent residents on ITAP visas.
What HR and payroll teams should watch
The exemption is not yet in force. The law must be signed by the president, published in the State Gazette, and then elaborated in supporting regulations issued by the president’s office or the Manpower Ministry. Lawyers interviewed by Indonesia Expat said the final wording of the RPTKA exemption clauses had not been confirmed. One employment lawyer cautioned: “Parts of the draft law were seen during discussions and although we’re told this has been passed, we need to wait until it’s promulgated.”
For payroll and HR teams in Indonesia, the practical steps are to continue paying the DKP-TKA on current RPTKA approvals, monitor the State Gazette for the published law, and watch for ministerial regulations that define eligibility and procedure. Key questions the implementing rules must answer include whether the five-year marriage period is calculated from the date of marriage registration in Indonesia or abroad, whether the exemption applies to first-time RPTKA applications, renewals or both, and whether it is automatic or requires a separate application.
The exemption would not affect other costs. Temporary stay permit (ITAS) and permanent stay permit (ITAP) fees remain in place. Foreign nationals remain barred from working in certain sectors, including human resources, the military and the civil service. Employers should also note that the RPTKA regime carries separate obligations, such as employing Indonesian understudies or providing training, which the reported exemption does not address.
The compliance risk backdrop
The fee has been a source of corruption. In April, eight Manpower Ministry officials were convicted of running a multi-billion rupiah RPTKA extortion racket. That history helps explain why employers are cautious about the reported change. The unnamed expat director quoted by Indonesia Expat said: “Whatever they decide to do, I hope it’s clear. Too many times in the past, officials weren’t sure of their own rules, leading to confusion over what was or wasn’t OK.”
For employers considering hiring a foreign spouse who may qualify, the safest course is to document the marriage date, the spouse’s Indonesian identity documents, and the foreign national’s stay permit status now, so that an application can be filed quickly once the implementing rules are published. PerCa has said it will closely monitor the eventual regulations.
Sources: Indonesia Expat
Photo: Wamena, Papua, Indonesia 2019 45 by Spasimir Pilev, CC BY-SA 4.0
