Key Differences Between PKWT and PKWTT in Indonesia

Indonesia’s employment regime draws a clear distinction between fixed-term and indefinite-term employment. In practice, the choice between PKWT and PKWTT is not merely administrative; it affects how the employment relationship is structured, what type of work may be performed, whether probation is permitted, and what obligations arise on termination. This note sets out the core differences with a practical lens, so employers can assess which arrangement is appropriate for the intended role.

Key takeaways

• PKWT is limited to work that is temporary in nature and should not be used for permanent roles. If used incorrectly, it may convert into PKWTT.

• PKWTT is the standard regime for permanent work and allows a probation period of up to three months, while PKWT does not.

• Termination consequences differ materially. PKWT primarily carries expiry salary and compensation implications, while PKWTT may trigger severance, long-service, and other statutory payments depending on the basis of termination.