Ramadan is the most important month of the Islamic calendar during which Muslims fast from dawn to dusk. Indonesia has the largest Muslim population in the world and consequently, Ramadan affects the everyday life of many Indonesians as well as its businesses.

But does Ramadan affect doing business in Bali?

In this article, we will debunk the four most common misperceptions expats have about doing business in Bali during Ramadan.

Myth #1: Work in Bali stops for a month during Ramadan

One of the most common misbeliefs about doing business in Bali is that work stops for a whole month during Ramadan. It is simply not true.

As the majority of Bali’s population are Hindus, its work environment is not affected by Ramadan as much as in other parts of Indonesia. However, even in the rest of Indonesia, work doesn’t stop. Only the public sector slows down during Ramadan, but everything else generally works as usual, especially in Bali.

Therefore, employers don’t have to shut down the office for Ramadan or shorten the working hours for all employees.

In Java and Lombok, some of the Muslim-owned local restaurants (warungs) close during the day, but it is not common in Bali.

Read more in our previous article on doing business in Indonesia during Ramadan

Myth #2: Businesses in Bali close for a week during Lebaran

The end of Ramadan is celebrated with Hari Raya Idul Fitri. Throughout Indonesia, there will be two public holidays to celebrate it. Additionally, the government will also publish a collective leave (Cuti Bersama) for two extra days. This period of holidays is known as Lebaran.

It is essential to distinguish collective leave and public holidays. As most authorities in Bali operate by the same principles as in Jakarta, immigration and other public offices will be closed in Bali during the collective leave.

However, note that the government only recommends the collective leave; it is not mandatory by law. Therefore, private companies in Indonesia don’t have to give their employees a full week off during Lebaran.

If you decide to implement the collective leave, it is mandatory for all your employees, and these days will be deducted from the employee’s annual leave balance. If you don’t use collective leave, you will allow your employees to take their leaves when they want.

Also, consider that keeping your business open during the collective leave can be a competitive advantage.

Myth #3: Employee productivity decreases during Ramadan

Ramadan affects the daily routine of many Indonesians. Those who fast generally wake up early in the morning and go through the day without eating. Consequently, work efficiency in Indonesia can suffer during Ramadan.

However, as the majority of employees in Bali are Hindus or follow some other religion other than Islam, it does not affect most workplaces in Bali.

If you do have employees in your Bali office that fast during Ramadan, it should not be an excuse for bad performance and delays. The solution to retaining efficiency is to assign crucial tasks to morning hours or before noon. It is the time when your fasting employees are the most productive.

Myth #4: Expat employees in Bali must also receive the 13th salary

The law obliges employers in Indonesia to pay an annual religious holiday allowance THR to their permanent employees. The THR payment, also known as the 13th salary, is due one week before the most extended religious holidays of the employee’s religion.

For Muslims, this holiday is Idul Fitri, and in 2019, the THR payment deadline for Muslim employees is 29 May.

However, this is not the case with expatriate employees. Expats in Indonesia are not entitled to receive the THR payment unless it is agreed with their employer in advance.

Therefore, to avoid any confusion from arising, it is better to regulate whether the THR will be paid out or not in their employment contract.

Learn more about the Indonesian religious holiday allowance in our previous article about THR payment.

Have specific questions about living or doing business in Bali?

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