Banking, Money and Taxes in Indonesia

Banking in Indonesia could be an exercise in patience for expats, but once getting used to how things are done in the country it will become easier to navigate the financial side of life in Indonesia. 

Money in Indonesia

The official currency in Indonesia is the rupiah (IDR), which is divided into 100 sen. Locals may use the word perak when referring to their currency. 

Rupiah come in coins from 50 IDR to 1,000 IDR, but inflation has rendered all coins and banknotes denominated in sen obsolete.

The notes are: 1,000 IDR; 2,000 IDR; 5,000 IDR; 10,000 IDR; 20,000 IDR; 50,000 IDR and 100,000 IDR.

Banking in Indonesia

There are plenty of banks for expats to choose from in Indonesia, both local and foreign. Expats will be able to choose whether they would like to open an account in rupiah or in US dollars. Some other foreign currencies are also provided for. Savings accounts, chequing accounts, foreign exchange, debit cards and credit cards are all available in the country. 

Some expats choose to keep their existing account in their home country or to open an account in Singapore. Expats who do this will have to ask their employer to transfer their salary into their offshore account and then ask to receive some of their salary in rupiah for cash purchases in Indonesia. 

Most staff at international banks in Indonesia will be able to speak English. 

Opening a bank account

Although the general requirements may differ from bank to bank, in order to open a bank account in Indonesia, expats will usually need to provide the following:

  • Letter of reference from their employer

  • Passport and a copy

  • Indonesian ID card

  • Indonesian tax number

The Indonesian ID card is called a KITAS (Kartu Izin Tinggal Terbatas). All expats must have this card to open a bank account. If wanting to open an account in US dollars, a minimum deposit is usually required. 

Expats should ensure that they explicitly state that they want the English option when opening a bank account. Otherwise the account will be opened in Indonesian. It is also wise to ask the bank for international banking codes if wanting to receive money from overseas. 

ATMs and credit cards

ATMs can be found in most shopping centres, bank branches and tourist areas in Indonesia. Expats can withdraw cash in Indonesia using any major international credit or debit card.

It shouldn’t be a problem for an expat to get a credit card in Indonesia. The applicant needs to be over 21 years old and there will be a minimum monthly income required. The credit card limit will usually be set at three times the monthly income of the applicant. 

Scams in Indonesia

Credit card fraud is a problem in Indonesia and credit cards are often misused, stolen or counterfeit. 

Expats should be careful if they exchange money and receive only 20,000 IDR notes in return. Certain foreign exchange outlets are not reputable and have a way of folding the notes so that foreigners cannot tell they have been given less money than they are owed. Expats should always count their money two or three times and ensure that they become familiar with the currency as quickly as possible to avoid falling victims to scams like this. 

Taxes in Indonesia

Residents of Indonesia are taxed on their worldwide income while non-residents are only taxed on their Indonesian income. However, expats who stay in Indonesia for more than 183 days in a 12-month period will become tax residents of Indonesia. 

When expats register as a taxpayer they will receive a tax number known as a Nomor Pendaftaran Wajib Pajak (NPWP). It is illegal not to have an NPWP and the punishment could mean imprisonment. It proves that expats are living and working legally in Indonesia.

Employers are responsible for deducting tax off their employees' salaries but it is the individual employee’s responsibility to register as a tax payer and file their tax returns. 

Expats will not have to pay tax in Indonesia if they are receiving income from their home country and the tax paid on that exceeds that which would be due in Indonesia. 

Income tax rates in Indonesia range from five to 35 percent, depending on an individual's income. If expats have dependent partners or children they may be entitled to tax deductions.