New Minimum Wages in Indonesia in 2026

Abstract

In Indonesia, as of 1 January 2026, the statutory minimum wages across all provinces were renewed, implying a drastic reform. Now, these wages are calculated based on demands both as regards contribution to economic growth and as regards a decent standard of living. Starting in 2025, a refined system with a huge number of sectoral minimum wages has come into being. This was agreed by social partners and approved by the provincial Wage Councils, thereby introducing an element of collective bargaining. As a result, sectoral wages have lifted minimum wage levels in provinces with a relatively low provincial wage.