Annual Leave in Indonesia: Rules and Management

Annual leave is the employee right HR teams get asked about most: when it starts, how many days it covers, whether unused days expire, and what happens to remaining days when someone leaves. Some of the answers come from the law and some from the company's own rules.

This article summarizes the annual leave rules in force in Indonesia as of October 2026 and how to manage them so every employee's balance stays clear. For the day-to-day request and approval process, see an organized employee leave request workflow.

Summary

The core annual leave rules in Indonesia:

• At least 12 working days. Employees are entitled to at least 12 working days of annual leave after 12 months of continuous service. This is set by Article 79 of the Manpower Law as amended by Law 6/2023 on Job Creation.
• Fully paid. Employees on annual leave remain entitled to their full wage.
• Details are set by the company. How annual leave works, including how to request it, when unused days expire, and whether they carry over, is set in the employment contract, company regulation, or collective agreement.
• Unused leave on termination. Annual leave that has not been taken and has not expired is part of the compensation for rights (uang penggantian hak) when employment is terminated, under Article 40(4) of PP 35/2021.
• Long leave is optional. Certain companies may grant long leave, with the terms set in the employment contract, company regulation, or collective agreement.

The DPR passed the UU Pelindungan Ketenagakerjaan (Employment Protection Law) on 6 October 2026. Until its official text is promulgated and takes effect, the rules above still apply. This article will be updated when the new rules apply.

Common Challenges

Annual leave problems at a company rarely come from the law itself. They come from record-keeping:

1. The entitlement start date is not recorded. Leave starts after 12 months of continuous service, but the start date sits in a different file from the leave records.
2. Balances are tracked by hand. Balances live in a spreadsheet updated after every request. One missed request and the employee's balance no longer matches HR's records.
3. Carry-over rules are unwritten. Employees don't know whether unused days expire at the end of the period or carry over, which leads to disputes near year end.
4. Approvals are scattered across chats. Managers approve leave in private messages, so HR struggles to confirm which leave was approved.
5. Calculating at exit. When employment ends, HR needs to know how many days remain untaken and unexpired. Without a clean history, that number is hard to defend.

Practical Checklist

Use this checklist to set up annual leave policy and records:

• Every employee's start date is recorded in their employee profile.
• A written policy states the number of annual leave days, which may not be fewer than 12 working days.
• The policy explains when unused days expire and whether they can carry over to the next period.
• How to request leave, the request deadline, and who approves are clear.
• Balances update every time leave is approved, not in a month-end recap.
• Employees can see their own leave balance.
• The history of requests and approvals is kept and can be reviewed.
• When someone leaves, untaken and unexpired leave is counted as part of the compensation for rights if employment is terminated.

Recommended Workflow

1. Write the leave policy. Put the number of leave days, the carry-over rule, how to request leave, and the approval flow into the employment contract, company regulation, or collective agreement.
2. Record the start date. From this date, HR knows when each employee becomes entitled to annual leave.
3. Set the opening balance. When the entitlement begins, record the employee's annual leave balance according to the policy.
4. Request and approve in one flow. The employee submits a request, the manager approves or rejects it, and the decision is recorded with its date.
5. Update balances immediately. Each approved leave reduces the balance right away, so the employee and HR see the same number.
6. Review before the period ends. Remind employees who still have unused days, especially when company policy says they expire.
7. Close out cleanly when someone leaves. Check untaken and unexpired leave as part of calculating the employee's entitlements.

Illustrative example: an employee starts work on 1 March 2025. Their annual leave entitlement begins on 1 March 2026, and the company grants 12 working days. By September 2026 they have taken 7 days, leaving a balance of 5. The company regulation says unused days can be used until 31 August 2027. If employment is terminated in December 2026 with 5 days still unused, those days are part of the compensation for rights.

Workflow Comparison

The law only sets a minimum. Most leave disputes come from unwritten policies and balances that were never recorded properly.

How OmahKu HRIS Helps

OmahKu HRIS helps HR teams run their leave policy from centralized data:

• Leave and permission requests through an approval workflow, so every approval is recorded.
• Leave balances that can be reviewed, so the employee and HR see the same number.
• Employee profiles that keep employee data in one place.
• Attendance, leave, and overtime reports with an audit trail for reviewing history at any time.
• GPS and geofence attendance and shift scheduling in the same platform.

For overtime, the overtime calculator estimates overtime pay under PP 35/2021.

Getting Started

1. Check that the company leave policy is written down and grants at least 12 working days.
2. Make sure the rule for unused days, expiring or carrying over, is stated clearly.
3. Collect each employee's start date and current leave balance.
4. Move leave requests and approvals into one recorded flow.
5. Review unused leave a few months before the period ends.

To see how OmahKu HRIS handles leave, balances, and approvals, reach our team through the contact page.