The benefit of using Employer of Record (EoR) Services, especially in Indonesia, is that it saves you the stress of learning the conditions of a new country. Especially if you want to navigate a global company. Of course, there are many things that are more of a priority to do right now.
Therefore, the article Benefit of using Employer of Record (EoR) services for Payroll Management here will be adapted to the context of Payroll in Indonesia.
But first, I will explain a little about what Payroll Management is. Before you read 6 Benefits of Using Employer of Service (EOR),
What is Payroll Management?
Quoting from the article Forbes “Payroll management encompasses the entire process of calculating employee hours, paying employees, withholding taxes and maintaining the financial documentation for your business.”
This means payroll management is not only about paying employee salaries but also other important aspects such as taxes and documenting your business finances appropriately so they can be used again in the future.
If you obey Hrone.cloud “The payroll management process is nothing but a set of regulated steps that are performed in the same order every month to form a payroll cycle.”
HROne.cloud describes payroll management as a series of regular steps carried out every month to form a payroll cycle. The word steps here explains that the payroll management process must be systematic and can be done repeatedly.
Similar to Adp.com “Payroll management is the administrative task of compensating employees for services rendered”
In very simple terms, payroll management carries out administrative tasks to provide compensation to employees for the services provided. The focus is on the administrative tasks of payroll, ensuring that employees receive proper payment for their work.
From the 3 sources above, it can be concluded that:
Payroll management plays an important role in business operations and is tasked with ensuring employees are paid on time and in accordance with applicable regulations.
Need help with Payroll Management? Contact Abhitech here.
Then, I will start to explain again what an Employer of Record (EOR) is.
What Is an Employer of Record (EoR)?
An Employer of Record (EoR) is a service provider that takes on the responsibility of being the legal employer for your employees in a foreign country, in this case, Indonesia.
This means they handle payroll, benefits, tax compliance, and HR-related matters on your behalf. Employer of Record (EoR) service allows you to have a local workforce and establish a legal entity without the complexities and risks associated with direct employment.
➡ Learn more about 5 essential roles of Employer of Record (EoR) here.
If you already understand Payroll Management and Employer of Record (EoR), Abhitech will start discussing the benefits of using Employer of Record (EoR) Service for Payroll. This is for foreign companies who want to open a company in Indonesia.
6 Benefits of Using Employer of Record (EoR) Services for Payroll
1. Ensuring Compliance with Local Regulations with Employer of Record (EoR) Service
Are you tired of studying local regulations?
Actually, it’s normal if you feel confused about local regulations in Indonesia. Because it could be that business regulations in Indonesia are very different from the regulations in your previous country.
For example, Law No. 13 of 2003 which discusses employment.
Wages or salaries are regulated in PP No. 78 of 2015.
In 2022 there is “UU CIPTA KERJA”.
There are still other things that companies must comply.
However, whatever the reason, the laws of a country must be obeyed so that your company that wants to develop in Indonesia does not encounter problems. That’s why Ensuring Compliance with Local Regulations is the main point of benefit of using an Employer of Record (EoR).
Many foreign companies like yours entrust Employer of Record (EoR) Service to be able to continue Compliance with Local Employment Laws.
➡ Read more about how to avoid mistakes in payroll management in Indonesia
2. Cost Savings and Administrative Efficiency with Employer of Record (EoR) Service
Many foreign companies do not want to use Employer of Record (EoR) Service and Payroll Management, because they feel it will only increase costs.
It is true that you will be charged for services.
But, actually, the service costs you pay to save on company operational costs and other administrative burdens.
How much do you have to pay to invest in Payroll software and also how many staff does your company need?
Do you know how to filter candidates to get payroll staff that suits your business?
Suppose you calculate all that and compare it with Employer of Record (EoR) Service. In that case, it is clear that using an Employer of Record (EoR) Service which includes Payroll Management is more cost-saving and efficient in administrative terms.
Need more assistance to understand Employer of Record (EoR) service? We are here to help.
2. Payroll Management and Accuracy with Employer of Record (EoR) Service
When using Payroll Management and Employer of Record (EoR) services there is no room for them to make mistakes. If a human error occurs, your service company must immediately repair it.
If you work with payroll management who has experience in many companies for decades and really understands the local culture of that country, of course even if they make a mistake, they can quickly fix it.
In Indonesia, we have the slang “Jam Terbang tidak akan menipu” which is used when someone is very experienced in a certain field and completes a difficult task with an effortless impression.
If you believe “experience is the best teacher” Abhitech has learned from many teachers (experience).
3. Employee Management and Onboarding
Good employee management increases job satisfaction and employee retention and reduces turnover and recruitment costs.
And also if you manage your employees in accordance with labor regulations then your company will definitely avoid fines and legal problems, as we discussed previously.
Employer of Record (EoR) Service is not only Payroll Management but also helps handle all administrative aspects related to employee management and onboarding, ensuring all processes comply with applicable employment laws. This includes creating contracts, monitoring work hours, and managing benefits.
If all of this is fulfilled, you can attract global talent’s attention in Indonesia.
➡ Read more about how to attract global talent here.
4. Scalability and Local Presence, Growth with Employer of Record (EoR) Service Agency
Everyone wants their company to grow. However, sometimes companies grow faster than you think.
In the near future you will need a lot of new employees, but there is no time to recruit yet.
Employer of Record (EoR) services allow companies to quickly increase or reduce the number of employees according to business needs without worrying about administrative and legal aspects.
Why can Employer Of Record (EOR) Service solve this more quickly?
A good Employer of Record (EoR) service already has networking and resources to recruit employees quickly according to the company’s needs.
As you know Employer of Service (EOR) services such as Abhitech.co.id whose services are very focused on Indonesia and has an extensive network.
Why is that the benefit of using Employer of Record (EoR) Service?
Networking here can include relationships with authorities, local vendors, and the local business community which is especially useful during periods of rapid growth or projects that may be temporary.
5. Support and Flexibility
You will work with others, and Employer of Record (EoR) Service will be willing to help you if there are problems.
Employer of Record (EoR) service also has a special team ready to help companies with various HR and payroll problems. This team consists of experts who understand local regulations and the best practitioners.
When you have worked together, you can ask them directly, and you will get references for solutions to your problems.
To read more about Abhitech’s Payroll Service, please click on this page.
Conclusion to get The Benefit of Using Employer of Record (EOR) Service
The benefit of using Employer of Record (EOR) services for payroll management in Indonesia is that it offers many significant benefits for foreign companies looking to operate efficiently and in accordance with local regulations.
However, because this is quite vital you have to work with those who are experienced. Abhitech has been helping companies in Indonesia manage Payroll for more than 30 years, if you are interested please visit this page.
