Indonesia’s 2025 Provincial Minimum Wages
On December 4, 2024, the Minister of Manpower issued Regulation No. 16 of 2024 on Determination of 2025 Minimum Wages (the “Regulation”). The Regulation introduces a new formula for calculating the 2025 minimum wages.
Under the Regulation, the minimum wage represents the minimum monthly wage determined by the Governor of each province. Adjustment to the Provincial Minimum Wage (in Indonesian, Upah Minimum Provinsi or the “UMP”) emphasizes the significance of fair compensation in fostering economic equity and growth.
♦ Calculation Formula for 2025 UMP
The UMP is calculated by taking into account economic growth, inflation, and certain indexes. The detailed formula for determining the minimum wage, including these indexes, is regulated under Government Regulation No 36 of 2021 on Wages as lastly amended by Government Regulation No. 51 of 2023.
According to the Regulation, the 2025 UMP is set to increase by 6.5%. The formula for calculating the 2025 UMP is as follows:
2024 Provincial Minimum Wage + (6.5% x 2024 Provincial Minimum Wage) = the 2025 UMP
♦ 2025 UMP in Indonesia
The UMP for each province in Indonesia for 2025 came into effect from January 1, 2025. Below is the detailed list of the UMP for each province.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Thomas Peter Wijaya (twijaya@aksetlaw.com), or Azzahra Saffanisa S. (asudiardiputri@aksetlaw.com) for further information.
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