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Pesangon Calculator (Indonesia severance pay, 2026)

Indonesian severance = uang pesangon (1 month's wage under 1 year of service, rising to 9 months from 8 years) plus a long-service award (UPMK: 2 months from 3 years, rising to 10 months from 24 years), under Government Regulation No. 35 of 2021. The severance part is multiplied by 0.5 to 2 depending on the reason. Resigning employees get neither.

The rules in Indonesia

LawGovernment Regulation (PP) No. 35 of 2021, Article 40 (amounts) and Articles 41 to 57 (reasons); Law No. 13 of 2003 as amended by Law No. 6 of 2023 (Job Creation)
Wage usedBasic wage plus fixed allowances. Daily-paid: 30 × daily wage
Severance (uang pesangon)Under 1 year: 1 month. Then 1 extra month for each further year: 1 to under 2 years: 2 months … 7 to under 8 years: 8 months. 8 years or more: 9 months
Long-service award (UPMK)3 to under 6 years: 2 months. 6–9: 3. 9–12: 4. 12–15: 5. 15–18: 6. 18–21: 7. 21–24: 8. 24 years or more: 10 months
1 × severance + UPMKEfficiency to prevent losses, closure not due to losses, merger, consolidation or split where either side does not continue, takeover, debt-payment postponement not due to losses, worker's request over employer misconduct
0.5 × severance + UPMKTakeover that changes working terms and the worker does not continue, efficiency or closure due to losses, bankruptcy, closure by force majeure, debt-payment postponement due to losses, breach of work rules after warning letters
0.75 × severance + UPMKForce majeure without closing the company
1.75 × severance + UPMKRetirement
2 × severance + UPMKDeath, or long illness or work-accident disability beyond 12 months
Not entitledResignation, absence 5+ days after two summonses, urgent violations: only compensation of rights (UPH) and separation money (uang pisah) under the company rules
Always addedCompensation of rights (UPH): unused annual leave and travel back to the place of hire, not included in the calculator

Worked example

Wage Rp 10.000.000 a month (basic + fixed allowances), 7 years and 3 months of service. Severance for 7 to under 8 years: 8 months = Rp 80.000.000. Long-service award for 6 to under 9 years: 3 months = Rp 30.000.000.

Efficiency to prevent losses (1×): Rp 110.000.000. Efficiency due to losses (0.5×): Rp 40.000.000 + Rp 30.000.000 = Rp 70.000.000. Retirement (1.75×): Rp 140.000.000 + Rp 30.000.000 = Rp 170.000.000.

New labour law passed in October 2026

On 6 October 2026 the House of Representatives (DPR) passed the Labour Protection Law (UU Pelindungan Ketenagakerjaan). The Minister of Manpower said the 0.5 severance factor will no longer apply and severance will be at least 1 × the table. The law still has to be promulgated and is reported to apply after a transition period, and a government regulation on a severance reserve fund is being prepared. Until it takes effect, PP 35/2021 governs, and the calculator follows it. We will update this page when the new rules apply.

Resignation and separation money

An employee who resigns with proper notice gets no severance or long-service award, only compensation of rights (unused leave and travel home) and separation money (uang pisah), whose amount is set in the employment agreement, company regulation or collective agreement.

For employers: gratuity is one line of what a role costs

Gratuity, leave, statutory contributions and notice periods all sit on top of salary. Routine back-office roles such as data entry, follow-ups, reconciliations and reporting can be handed to AI workers that carry none of these costs. Book a free automation audit and we will put your own figures on it.

Please note: this calculator follows the published law and common practice as checked on 21 October 2026. It is a guide, not legal advice. Contracts can give more than the legal minimum, and special cases (part-time work, free zones, disputes) can change the figure, so confirm the final amount with your HR team or a lawyer before paying or accepting a settlement.

Questions people ask

How is pesangon calculated in Indonesia?
Take the severance months for the years of service (1 to 9 months), multiply by the factor for the termination reason (0.5 to 2), add the long-service award months (2 to 10 months from 3 years), and multiply by the monthly wage (basic + fixed allowances).
Do I get pesangon if I resign?
No. Under PP 35/2021 a resigning employee gets compensation of rights and separation money (uang pisah) under company rules, but no severance or long-service award.
What does an employee get on retirement?
1.75 times the severance plus the long-service award, plus compensation of rights.
What is UPMK?
Uang penghargaan masa kerja, the long-service award: 2 months' wage from 3 years of service, rising to 10 months from 24 years.
Has the new 2026 labour law changed severance?
It was passed on 6 October 2026 and removes the 0.5 factor, but it is not yet in force. PP 35/2021 still applies today.
Which wage is used for severance?
The basic wage plus fixed allowances. For daily-paid workers, one month is 30 times the daily wage.

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