Business During Ramadan in Indonesia: Hours, Leave and THR
Business during Ramadan in Indonesia: whether working hours change, when THR falls due, how collective leave works, and when offices and banks close for Idul Fitri.
References (2)
- SKB 3 Menteri — the joint decree of the Ministers of Religious Affairs, Manpower, and Administrative and Bureaucratic Reform that sets each year's national holidays and collective leave. The decree in force for 2027 (Nomor 1205 Tahun 2026, Nomor 3 Tahun 2026 and Nomor 2 Tahun 2026, signed 15 September 2026) provides at Diktum Keempat that taking collective leave reduces annual leave entitlement, in accordance with the law and with the terms in force at each company, and at Diktum Keenam that private employers decide for themselves whether to observe the days. The diktum numbering differs from one year's decree to the next
- Annual leave itself is at least 12 working days after 12 consecutive months of service — UU No. 13/2003, Article 79(3), as replaced by UU No. 6/2023, Article 81 point 25
Running a business during Ramadan in Indonesia changes four things for an employer: a statutory holiday payment falls due, working hours usually shift, leave concentrates into a single week as staff travel home, and around Idul Fitri — Eid al-Fitr, the holiday that ends Ramadan — the offices, banks and government services you depend on close together.
None of that is unmanageable. All of it is expensive to notice late — the dates move about eleven days earlier each year, so a deadline that sat safely in April last year may not next year.
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Agree the hours and publish the leave rule
Decide whether you are shifting the working day and whether you will observe the collective leave days. Both are easier to state once than to negotiate individually forty times.
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Adjusted hours, and a hard stop at sunset
The break of fast falls at sunset, which moves a few minutes daily and differs by city. A recurring late-afternoon meeting that worked last week will not work this week.
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The holiday payment falls due, and leave peaks
The statutory religious holiday allowance is paid in this window, and it lands in the same week as reduced output and requests to travel home.
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The country stops
Public holidays and collective leave days run together. Offices, banks and government services close, and nothing that needs a counterparty moves.
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Backlog, and the gathering
Deferred work restarts against deadlines that did not defer. Many workplaces open with a reconciliation gathering, commonly called halal bihalal.
The holiday allowance is a statutory payment, not a bonus
THR — the religious holiday allowance — is an obligation, not a discretionary gesture, and it falls due in this period. Budget it into the payroll cycle as a fixed cost landing in the same week your output drops and the banking system closes. The calculation, who qualifies, and the deadline are a subject of their own and are not set out here.
The working-hours decision
The source of most confusion is that “flexible hours during Ramadan” describes three different decisions with different costs. Choose deliberately.
| For the employee | Cost to you | To agree | |
|---|---|---|---|
| Shift the day earlier | Same hours, earlier start and finish, home before sunset | Nothing in wages; you lose late-afternoon overlap with anyone abroad | A temporary change to start and finish times, stated in writing |
| Drop the unpaid break | Leaves roughly an hour earlier; no lunch break they were not taking anyway | An hour a day of coverage | That the break is genuinely unpaid, and how the shortened day is recorded |
| Flex individually | Arrangements vary person to person | Least disruption on paper, most on a rota | Nothing formally — which is why it tends to drift into inconsistency |
In our experience the first option causes the fewest arguments, because it treats everyone the same and does not require anyone to explain their own arrangement.
Collective leave around Idul Fitri
The joint decree of three ministers that sets each year’s national holidays also sets collective leave days (cuti bersama), and the longest run of them falls around Idul Fitri — which is why the country stops for most of a week rather than for a long weekend. Observing them is the private employer’s own decision, and where staff are engaged through an employer of record it belongs to the legal employer.
How the deduction from annual leave works, what it costs when a day is taken, and why an employee who works a collective-leave day loses nothing, are set out in the guide to public holidays and collective leave, along with the signed dates for next year.
Four things that go wrong
Every leave request lands on the same week. Travelling home for Eid — mudik — is not a preference that spreads across the month. It concentrates. Publish how leave will be allocated before the requests arrive, or you will be choosing between people after they have booked.
A deliverable was dated for the week nobody is working. Not just your team: the counterparty, their bank, and the government office you both need. A date that looks fine in a contract can be structurally impossible. The same applies to a monthly filing deadline — the obligation does not move because the office is shut.
The meeting was put at 12:30, or at 17:30. Mid-morning and early afternoon work. The hour before sunset does not, and a meeting that runs into the break of fast will end whether or not you have finished.
An approval slips a fortnight. A signature needed from a counterparty whose finance team is away does not arrive faster because it was urgent. Where an approval has to happen either side of the holiday, say so in writing early.
Courtesies that are worth getting right
Being asked to iftar
The evening meal that breaks the fast is an ordinary setting for business here, and an invitation is worth accepting. Hosting one for your own team is common and lands better than a gift. The gathering after the holiday, often called halal bihalal, serves a similar purpose.
Somewhere to pray and rest
A quiet room that is genuinely quiet. It costs nothing and is noticed considerably more than a wellbeing programme.
What to say, and what not to say
Selamat berbuka puasa — roughly “enjoy breaking your fast” — at the evening meal. Selamat Idul Fitri or Selamat Lebaran, both meaning “happy Eid”, afterwards. Avoid “happy fasting”, which reads oddly in English and in Indonesian.