Check your contract: PKWT, PKWTT, probation and end-of-contract pay

A lot of workplace trouble starts with a contract nobody read carefully. This guide helps you check what kind of contract you have, what may and may not be in it, and what you receive when it ends.

PKWT and PKWTT: what is the difference

• PKWT (perjanjian kerja waktu tertentu), a fixed-term contract: it has an end date or ends when a specific piece of work is finished.
• PKWTT (perjanjian kerja waktu tidak tertentu), a permanent contract: no end date.

An employment agreement is made either for a fixed period or for an indefinite period (Law 6/2023 Art. 56).

Check your PKWT

Form. A PKWT must be in writing, in Indonesian and Latin script (Law 6/2023 Art. 57; Constitutional Court Decision 168/PUU-XXI/2023). If it is made in both Indonesian and a foreign language and the interpretations differ, the Indonesian version prevails. The employer must also register the PKWT online with the manpower ministry (PP 35/2021 Art. 14).

Type of work. A PKWT may only be used for work that, by its type and nature, will be finished within a set time: one-off or temporary work, work expected to finish in a not-too-long period, seasonal work, work tied to a new product or activity still being trialled, or work of an irregular nature. A PKWT may not be used for permanent work. If these conditions are broken, the PKWT becomes a PKWTT by law (Law 6/2023 Art. 59).

Length. A time-based PKWT may run for at most 5 years including extensions (PP 35/2021 Art. 8; Constitutional Court Decision 168/PUU-XXI/2023). Your length of service is counted from the start of the employment relationship, including after extensions.

Probation. A PKWT may not require probation. If it is written in anyway, the clause is void by law and your service still counts (Law 6/2023 Art. 58; PP 35/2021 Art. 12). Probation exists only for PKWTT, for at most 3 months, and pay during probation may not fall below the minimum wage (Law 13/2003 Art. 60).

End-of-contract compensation

The employer must pay compensation (uang kompensasi) to PKWT workers who have worked at least 1 continuous month, paid when the PKWT ends (PP 35/2021 Art. 15).

• A PKWT of 12 continuous months: 1 month of wages.
• Less than 12 months (at least 1 month): proportional, that is length of service divided by 12, times 1 month of wages.
• More than 12 months: also proportional, with the same formula.
• Wage base: basic wage plus fixed allowances (if your pay is basic wage plus non-fixed allowances, the base is basic wage).
• If the PKWT is extended, compensation is paid when the period before the extension ends, and again after the extension ends.
• If either side ends the relationship before the contract ends, compensation is still owed, calculated on the period actually served (Art. 17).

(PP 35/2021 Arts. 15 to 17.) Check whether this compensation appears on your payslip or in the contract.

PKWT workers are also entitled to religious holiday allowance (THR) after 1 continuous month of work (Manpower Minister Regulation 6/2016 Art. 2).

If the employer ends your PKWT early, you may qualify for JKP through BPJS Ketenagakerjaan (PP 6/2025 Art. 20(2)). See the guide on being laid off.

If you are placed through a vendor or outsourcing company

The employment relationship between a worker and an outsourcing company rests on a written PKWT or PKWTT, and the worker’s protection, wages, welfare, working conditions and disputes are the outsourcing company’s responsibility (PP 35/2021 Art. 18). For PKWT at an outsourcing company, the contract must require protection of rights to be carried over if the outsourcing company changes while the work still exists (Art. 19).

Since 30 April 2026, Manpower Minister Regulation 7/2026 limits outsourced work to six groups: cleaning, food and drink provision, security, drivers and worker transport, operational support services, and support work in mining, oil, gas and electricity. In the sources we checked, it is not settled whether tech roles placed through a vendor count as “operational support services”. If you are in this position, ask a legal adviser.

Clauses to read twice

This is not about valid or invalid, it is about understanding before you sign:

• Wage breakdown: how much is basic wage, how much is fixed and non-fixed allowance. This sets the base for overtime, compensation, severance and JKP.
• Service bonds and penalty clauses for leaving early.
• Confidentiality, intellectual property, and bans on working elsewhere or for competitors (non-compete). In the sources we checked there is no specific provision stating whether non-compete clauses for employees are valid, so treat them as terms to read closely and get advice on.
• Working hours and overtime: see working hours and overtime.
• Who signs: make sure the legal entity of your employer is clearly named.

When to get help

• Your PKWT has been extended again and again for work that feels permanent.
• The contract is not signed by the company, you have no copy, or it is only in a foreign language.
• You are asked to sign a clause you do not understand.
• The PKWT compensation was not paid when the contract ended.

Places to try: the district or city manpower office, LBH (Lembaga Bantuan Hukum, legal aid institutes), or a lawyer. REKATI is not affiliated with them and does not take cases.

A note for foreign workers

The PKWT compensation rules above do not apply to foreign workers employed under a PKWT (PP 35/2021 Art. 15(5)). Foreigners who work in Indonesia for at least 6 months must join the social security programmes (Law 24/2011 Art. 14). This guide gives no advice on residence permits or visas.

What may change

The Employment Protection Law, approved by the DPR on 6 October 2026 and not yet in force, is reported to cap PKWT at 4 years. Under the rules in force now, the cap is still 5 years. Details and sources are in New rules 2026.