Official 2025 Minimum Wage in Indonesia: A Guide
## A 6.5% Increase on the Horizon for Indonesian Minimum Wage
Indonesian workers can anticipate a 6.5 % increase in their minimum wage for 2025, according to a recent announcement. This marks a significant adjustment designed to keep pace with the rising cost of living and ensure a fairer wage across the archipelago.
## Legal Provisions and Enforcement
Indonesian Manpower Minister Yassierli emphasized that companies failing to comply with the new minimum wage will face legal repercussions. He stressed the importance of adhering to the new regulations, highlighting the role of labor inspectors for ensuring compliance. Workers who encounter firms violating these regulations are encouraged to report the issues to the relevant authorities.
## Calculation Formula
The calculation for the 2025 Minimum Wage (UMP) follows a specific formula based on the previous year’s UMP and a predetermined increase. This increase is calculated as 6.5% of the 2024 UMP.
2025 Minimum Wage = 2024 Minimum Wage + (0.065 x 2024 Minimum Wage)
President Prabowo Subianto revealed this increase following a meeting with his ministers at the Presidential Palace Complex in Jakarta. Minister Yassierli, alongside Finance Minister Sri Mulyani Indrawati, Coordinating Minister for Economic Affairs Airlangga Hartarto, and People’s Empower Minister Muhaimin Iskandar, attended this crucial meeting.
## Factors Influences
The 2025 UMP calculation is a complex process considering various factors vital to the economy. These include national economic growth projections, inflation rates, and indices reflecting the contribution of the labor force to the province’s economic health.
The 2025 UMP formula seeks to strike a balance, taking into account the interests of both employers and employees, and ensuring a fair wage allows workers to lead a decent life.
## Setting Minimum Wage for 2025
The Provincial Wage Council plays a crucial role in setting’ the 2025 UMP. They make recommendations to the Governor, of each province, who ultimately determines the final minimum wage applicable in their region.
Following the provincial minimum wage announcement, districts and cities within the province can set the minimum wage, known as the UMK (regional minimum wage), which must be above the provincial minimum wage.
## Effective Date
All minimum wages revised and established under Ministerial Regulation 16/2024 will come into effect on January 1, 2025.
What measures are being taken by the Indonesian government to ensure that companies comply with the new minimum wage?
## Interview: Indonesia’s Minimum Wage Hike: A Step Towards Fairness
**Host:** Welcome back to the show! Today we’re discussing the recently announced 6.5% increase in Indonesia’s minimum wage for 2025. Joining me is [Guest Name], an expert in Indonesian labor law and economics. Welcome to the program!
**Guest:** Thank you for having me.
**Host:** So, this 6.5% increase is a significant jump. What are the driving factors behind this decision?
**Guest:** Several factors are at play. Primarily, it’s a response to the increasing cost of living in Indonesia. Inflation has been steadily rising, and this increase aims to ensure that workers can maintain their purchasing power and afford basic necessities. The government also recognizes the importance of a fairer wage structure to boost worker morale and productivity [[1](https://www.aseanbriefing.com/doing-business-guide/indonesia/human-resources-and-payroll/minimum-wage)].
**Host:** Now, enforcement is always a crucial aspect of any policy change. What measures are being put in place to ensure companies comply with this new minimum wage?
**Guest:** Indonesian Manpower Minister Yassierli has been very clear: non-compliance will not be tolerated. Companies failing to adhere to the new minimum wage can expect legal repercussions. The government is actively deploying labor inspectors to monitor and enforce compliance across various sectors [[1](https://www.aseanbriefing.com/doing-business-guide/indonesia/human-resources-and-payroll/minimum-wage)].
**Host:** That’s reassuring to hear. What message does this wage increase send to Indonesian workers?
**Guest:** I believe it sends a strong message that the government is committed to protecting the livelihoods of its workers and ensuring they share in the country’s economic growth. It’s a step towards a more equitable society where workers are fairly compensated for their contributions.
**Host:** Thank you for shedding light on this important topic. We hope this increase will indeed go a long way in improving the lives of Indonesian workers.
**Guest:** My pleasure.