The short answer
You can switch employer-of-record providers in Indonesia without the employee losing anything, but only if the handover is treated as what it legally is: a change of employer. The employee's contract, BPJS registrations, tax withholding and accrued entitlements all sit with the outgoing EOR as the legal employer. Moving them means either ending that employment cleanly and starting a fresh one with the new EOR, or a transfer arrangement in which the new employer contractually recognises the service already served. Neither route is difficult. Both go wrong when a buyer treats the switch as a vendor change and lets the two providers' payroll calendars decide the timing.
This guide is written for a company that already employs people in Indonesia through an EOR and wants to move them to a different provider. It covers the two routes, what to protect, the deposit mechanics, a timeline, and where MixWork fits. It is general information, not legal advice: Indonesian employment law is in transition, with a new Manpower Law due by 31 October 2026, and a transfer of employment is exactly the kind of step that should be checked by qualified Indonesian labour counsel against both contracts before anyone signs.
Why switching is a change of employer, not a change of vendor
Under an EOR arrangement, the provider is the employer named on the Bahasa Indonesia employment agreement, the party registered with BPJS Kesehatan and BPJS Ketenagakerjaan as the employer, and the withholding agent for PPh 21. You direct the work; they hold the employment. When you move to another provider, the person's legal employer changes, and Indonesian law regulates how an employment relationship ends and how a new one begins. Government Regulation No. 35 of 2021 sets out the grounds and procedure for termination and the payments that follow; the Manpower Law No. 13 of 2003 as amended by Law No. 6 of 2023 sets the framework for permanent (PKWTT) and fixed-term (PKWT) contracts; and Law No. 24 of 2011 requires the employer to register its employees for social security. A switch touches all three.
The two routes
Route 1: end and restart
The employment with the outgoing EOR ends by mutual agreement on a set date, with a written settlement of everything owed to the employee to that date: salary, any unused annual leave, prorated THR for the service since the last religious holiday, and whatever the contract and PP 35/2021 provide on ending by agreement. The new EOR then issues a new PKWTT starting the next day. The advantages are clarity and a clean paper trail. The costs are that length of service restarts unless the new contract says otherwise, that the new contract may lawfully include a probation period of up to three months, and that the settlement itself may carry payments the outgoing provider will invoice you for. Agree in writing, before the switch, that probation will not be applied to a transferred employee and that the start date in the new contract is the day after the old one ends, so there is no gap in BPJS cover.
Route 2: transfer with recognised service
The new EOR's contract states the employee's original start date with the previous employer as the date from which service is counted for leave, long-service and severance purposes, and the three parties sign a transfer letter recording that accrued leave and other entitlements carry across rather than being paid out. The employee keeps continuity of service, which matters for severance multiples under PP 35/2021 and for annual leave that vests after twelve months. The cost is that the new EOR takes on liability for service it did not employ, so it will price that into its deposit or its fee, and some providers will not do it at all. This is the route to prefer for long-serving employees and the one to ask every candidate provider about explicitly.
Question | End and restart | Transfer with recognised service |
|---|---|---|
Length of service | Restarts unless the new contract states otherwise | Continues from the original start date |
Accrued annual leave | Paid out in the settlement, or carried by agreement | Carried across in the transfer letter |
Probation | Lawful for up to three months on a new PKWTT; exclude it in writing | Not applicable where service is recognised |
Severance exposure | Settlement at the outgoing EOR; new exposure starts low | Full tenure carried; priced into the new provider's terms |
Paperwork | Settlement agreement plus new contract | Tripartite transfer letter plus new contract |
Best for | Short tenures, simple cases | Employees with years of service you want to keep whole |
What to protect: the four entitlements
Accrued annual leave
Statutory annual leave is twelve days after twelve months of continuous service, and most professional contracts grant more. Ask the outgoing provider for the leave balance in writing, decide whether it is paid out or carried, and make sure the new contract or transfer letter says which. A balance that is neither paid nor carried is a dispute waiting for the employee's first request for time off.
Prorated THR
Under Minister of Manpower Regulation No. 6 of 2016, an employee with at least one month of service is entitled to THR in proportion to service before the religious holiday. If the switch falls between the last holiday and the next, agree who pays the prorated portion for the months at the outgoing provider. The usual answer is that the outgoing provider pays it in the settlement and the new provider accrues from the transfer date; the total is the same and the employee should not be asked to notice the seam.
BPJS continuity
The employee's BPJS Kesehatan and BPJS Ketenagakerjaan membership numbers are theirs and stay with them. What changes is the employer registration: the outgoing EOR deregisters the employee as its worker and the new EOR registers them as its own, and contributions must not lapse between the two. Set the end date and start date to consecutive days and have both providers confirm the registration dates in writing. JHT and JP balances accumulate to the individual across employers.
Tax records
The employee's NPWP and PTKP status do not change. The outgoing EOR issues the annual withholding statement (form 1721-A1) for the months it employed them, and the new EOR withholds from its first payroll under the effective-rate tables, with the December true-up reflecting the full year. Ask for the outgoing provider's statement at the switch rather than the following March.
Deposits, in both directions
Most EOR providers hold a security deposit, and a switch triggers two deposit events. The outgoing provider owes you a refund on the terms you signed; check the notice period, the offset rights and the payment timing before you give notice, because a refund netted against a final invoice you did not expect is the most common surprise in a switch. The incoming provider will take its own deposit, and some providers' published terms set a higher deposit for an EOR employee who transfers in with accrued benefits, precisely because Route 2 moves liability onto them. Read the deposit clause of the new agreement before you choose the route, not after. Every provider on our Indonesia EOR pricing index is listed with the deposit terms it publishes.
A realistic timeline
The paperwork for a switch takes days. The calendar takes weeks, because two payroll cut-offs have to line up: the outgoing provider's final payroll, which settles salary and entitlements to the end date, and the incoming provider's first payroll, which must be set up before its cut-off or the employee waits a month for their first salary. Plan around the cut-offs, then fit the documents inside them.
Week | Action | Who |
|---|---|---|
1 | Choose the route with counsel; request leave balance, THR position, deposit refund terms and the 1721-A1 timing from the outgoing provider; sign the new provider's agreement and confirm its deposit basis | You, both providers |
2 | Brief the employee; agree the end date and the consecutive start date; draft the settlement agreement or tripartite transfer letter and the new PKWTT with probation excluded | Both providers, employee |
3 to 4 | Sign; outgoing provider runs final payroll and settlement, deregisters from BPJS on the end date; incoming provider registers on the start date and sets up payroll before its cut-off; devices and workspace handed over | Both providers |
5 to 6 | First payroll at the new provider; deposit refund received from the outgoing provider; 1721-A1 for the earlier months on file | Incoming provider, you |
The checklist
Route chosen and both contracts read by Indonesian labour counsel.
Written leave balance and THR position from the outgoing provider.
End date and start date on consecutive days, confirmed by both providers.
New contract excludes probation for transferred staff and, on Route 2, states the original start date.
BPJS deregistration and registration dates confirmed in writing.
Deposit refund terms read before notice; new deposit basis read before signing.
Both payroll cut-offs in the calendar before any date is promised to the employee.
Personnel file transferred under a data-processing basis consistent with Law No. 27 of 2022 on Personal Data Protection.
Devices, workspace access and software licences moved on the same day as the contract.
Where MixWork fits
MixWork employs people in Indonesia only as full-time permanent staff on compliant contracts, and we take transferred employees on either route. Where the transfer letter provides for it, we recognise prior service; we do not apply probation to a transferred employee; and we sequence the end date, the BPJS registration and the first payroll with the outgoing provider so that the employee is never uncovered and never waits for a salary. Onboarding takes one to three weeks once documents are in hand. Every transferred employee joins Total Care 360, the managed HR layer included with MixWork EOR at no extra cost, which means a named HR manager in Jakarta, monthly check-in calls with the employee and with you, and someone on the ground if anything in the handover needs untangling. Our fee is USD 249 per employee per month and our deposit is one to two months depending on the engagement; both are on our rate card.
If you are switching because the current arrangement is not working, the questions to ask the next provider are the same ones you wish you had asked the first, and the ranked comparison of Indonesian EOR providers shows where each one, including MixWork, is the stronger choice.
Primary sources
Government Regulation No. 35 of 2021: contracts, termination procedure and the payments on ending employment.
Law No. 13 of 2003 on Manpower, as amended by Law No. 6 of 2023: the employment relationship, probation and leave.
Minister of Manpower Regulation No. 6 of 2016: religious holiday allowance and proration.
Law No. 24 of 2011: employer registration with BPJS.
Law No. 27 of 2022: personal data protection for the personnel file.
This article is general information current as at 12 September 2026 and is not legal advice. A change of employer in Indonesia should be reviewed by qualified Indonesian legal counsel against the actual contracts before anyone signs.
