Anastasya Lavenia Yudi, Jakarta – The Ministry of Manpower is still finalizing the government regulation (PP) regarding Indonesia's 2026 minimum wage. Manpower Minister Yassierli revealed that the calculation of the 2026 minimum wage in the draft government regulation does not lead to a single figure.
Yassierli explained that according to the Constitutional Court Decision Number 168 of 2023, the 2026 minimum wage will be in the form of a range.
"We will authorize the Provincial, City, and District Wage Councils to determine within that range in accordance with the economic growth in their respective regions or areas," said Yassierli at a press conference in his office, Jakarta, on Thursday, November 20, 2025.
With this approach, the government hopes to narrow the wage disparities between regions. Additionally, the calculation of the minimum wage will include factors related to a decent standard of living. Yassierli stated that the ministry has formed a team to calculate the estimate of a decent standard of living.
The Director General of Industrial Relations and Social Security Employment at the Ministry of Manpower, Indah Anggoro Putri, added that the range referred to in the calculation of the minimum wage is the alpha index. The alpha index measures the contribution of labor to a province's or city/district's economic growth. Before being added to the inflation rate, Alpha will be a multiplier for the province's or city's economic growth. Based on PP Number 51 of 2023, alpha is set at 0.1-0.3.
Indah emphasized that the formula used to calculate the minimum wage remains unchanged. However, the alpha index will be expanded so that it no longer ranges between 0.1 and 0.3. She said that the variables in the minimum wage formula remain the same, with a slight adjustment to the alpha index as mandated by the Constitutional Court.
"What is the adjustment? The government must consider KHL, the decent standard of living," Indah told reporters at the Ministry of Manpower office after the press conference.
According to Indah, the 2026 minimum wage will still take effect on January 1, 2026, even though it will not be announced tomorrow, November 21, 2025. She ensured that the drafting of the PP is now being perfected. Indah also claimed that the Ministry of Manpower has discussed the PP with relevant ministries/agencies, labor unions, and employers.