Bambang Ismoyo, Addin Anugrah Siwi, Jakarta – The Manpower Ministry has yet to announce the 2026 provincial minimum wage (UMP) as the government is still finalizing a new regulation that will define the updated wage-setting formula.
Manpower Minister Yassierli said the UMP decision is still expected to be released before December 31, 2025.
"We want the regulation fully ready. There's no fixed deadline, but we hope coordination across ministries and stakeholders is completed soon," Yassierli said in Jakarta on Wednesday.
He said the new formula requires deeper study as it must include the Decent Living Needs (KHL) component, following the Constitutional Court (MK)'s 2023 ruling."What's new in this regulation is the mandatory inclusion of KHL. That's the key," he said. "As mandated by the Court, KHL must be considered. This is a major effort, not just determining a range of increases."
How the previous UMP formula worked
Under the earlier wage rules in Government Regulation No. 51/2023, provincial minimum wages (UMP) were adjusted using a formula that combined inflation, economic growth, and a productivity index known as alpha.
The formula added an adjustment value to the current UMP, calculated as: Adjustment = UMP x (Inflation + (Economic Growth x Alpha))
Provincial inflation captured changes in living costs, while economic growth reflected each region's economic capacity. The alpha coefficient, set between 0.10 and 0.30, was determined by governors based on labor productivity, employment conditions, and regional competitiveness.
Yassierli added that the 2026 UMP will no longer follow a single national figure. Each province will have a different minimum wage aligned with its economic conditions and decent living levels. With the updated formula still under discussion, the final 2026 UMP figures have been postponed and no official numbers have been set.
The ministry added that Indonesia's cost-of-living gaps remain significant. Major urban centers like Jakarta face much higher living expenses than inland regions. A uniform national wage, officials argued, would prevent workers in high-cost areas from meeting basic needs, making regional differentiation more appropriate.
Under the current Government Regulation No. 51/2023, wage setting considers inflation, economic growth, and an index known as alpha. The upcoming regulation will replace that formula in line with the revised legal mandate.
"As required by law, the formula must be detailed in the regulation. That's what we're preparing now," Yassierli said.
Apindo Chairwoman Shinta Widjaja Kamdani also echoed the importance of regional factors such as inflation, growth, and decent living needs.
"Our main priority is job creation. The wage system must be fair for both workers and employers. We cannot impose a single formula across Indonesia," she said during a media briefing in Jakarta on Tuesday.
Source: https://jakartaglobe.id/business/indonesia-delays-2026-minimum-wage-decision-to-yearen