In Indonesia, the minimum wage is reviewed annually, and for 2025, a nationwide average increase of 6.5% has been officially approved. As a result, the average minimum wage across the country will be IDR 3,320,000 (approximately USD 213.26)*.

While the minimum wage continues to rise year by year, driving up the overall salary levels of the workforce, this standard does not apply to all enterprises. In reality, many micro and small-sized businesses still employ workers below the minimum wage threshold.

This article provides a detailed overview of Indonesia’s minimum wage for 2025, as well as comparisons with average monthly incomes and an explanation of the national minimum wage system.

*Currency conversion based on the exchange rate of JPY 1 = USD 0.00694 as of May 2025. IDR 3,320,000 = approx. JPY 29,840 → USD 213.26

Minimum Wage in Indonesia (2025)

Nationwide Average

In 2024, the national average minimum wage in Indonesia was IDR 3,113,360 (approximately USD 199.85). For 2025, the government has decided to uniformly increase the minimum wage by 6.5%, raising the national average to IDR 3,315,728 (approximately USD 213.04).

Reference: Kompas.id, “Upah Minimum 2025 Rata-rata Rp 3.315.728”

By Province

Source: PT. TRICRUISE MARKETING INDONESIA, based on Kompas.com “Resmi, Ini Daftar UMP 2025 di Seluruh Provinsi Indonesia”

In 2025, Jakarta will have the highest provincial minimum wage at IDR 5,396,761 (approximately USD 346.27), while the lowest will be in Central Java at IDR 2,169,349 (approximately USD 139.29). The chart below ranks the minimum wages of each province in Java and Bali in descending order.

Minimum Wage by Province in Indonesia (2025)

Reference: Kompas.com “Resmi, Ini Daftar UMP 2025 di Seluruh Provinsi Indonesia”
*Exchange rate used: IDR 15,000 = USD 1

Trends in Indonesia’s Minimum Wage and Average Monthly Income

The following table shows the trends in Indonesia’s minimum wage and average monthly income over the past five years:

These figures clearly show that Indonesia’s minimum wage has continued to rise steadily. While average monthly income has also increased, some may question why it remains close to the minimum wage. This is due to the fact that Indonesia’s minimum wage policy applies only to medium- and large-sized enterprises.

In other words, micro and small businesses—where the majority of Indonesian workers are employed—are permitted to pay wages below the statutory minimum. This creates a situation in which average wages closely approach the minimum wage level.

According to the Ministry of Cooperatives and Small and Medium Enterprises, as of 2021, 63,955,369 businesses, or 99.6% of all businesses in Indonesia, were categorized as micro-enterprises. When small enterprises are included, the figure rises to 99.9%. When medium-sized enterprises are also included, they collectively account for approximately 97% of the country’s total employment.

References:

• Ministry of Manpower of the Republic of Indonesia: “Rata-rata Upah Minimum Provinsi (UMP) di Indonesia Tahun 2020 – 2024”
• BPS: “Rata-Rata Upah/Gaji (Rupiah), 2020/2021/2022/2023/2024”
• databoks: “Usaha Mikro Tetap Merajai UMKM, Berapa Jumlahnya?”

*Exchange rate used: IDR 15,000 = USD 1

Understanding the Minimum Wage in Indonesia

Scope of Application

The minimum wage in Indonesia serves as the baseline wage that employers in medium- and large-sized enterprises must pay their workers. These employers are prohibited from paying wages below the stipulated minimum. On the other hand, micro- and small-sized enterprises are not legally required to pay at or above the minimum wage level.

Definition of Micro and Small Enterprises

Micro Enterprises
A micro enterprise is defined as a sole proprietorship or individually owned business entity that meets the following criteria:

• Total assets: up to IDR 50 million (approx. USD 3,320)
• Annual revenue: up to IDR 300 million (approx. USD 19,920)

Small Enterprises
A small enterprise is defined as a business that is neither a subsidiary nor a branch of a medium- or large-sized company and meets the following criteria:

• Total assets: between IDR 50 million and IDR 500 million (approx. USD 3,320–33,200)
• Annual revenue: between IDR 300 million and IDR 2.5 billion (approx. USD 19,920–166,000)

Types of Minimum Wage and Decision-Making Authority

There are two main types of minimum wage in Indonesia:

• Provincial Minimum Wage (UMP)
• Regency/Municipal Minimum Wage (UMK)

Indonesia’s minimum wage is legally regulated through ministerial decrees issued by the Minister of Manpower. The specific wage amounts are decided annually by the governor of each province. In determining the minimum wage, the following factors are considered:

• Economic growth rate
• Inflation rate
• Local Cost of Living Index (KHL), among other region-specific indicators

Moreover, regencies or cities may set their own minimum wages if they exceed the provincial minimum.

While the central government does not determine specific wage figures, it retains the authority to set nationwide wage policy guidelines. For example, it may establish directives such as “a uniform 6.5% increase in the minimum wage for 2025.”

Reference: Hukum Online, “Who Has the Authority to Set the Minimum Wage?”

Life of Low-Wage Workers in Indonesia

Clerical Worker Earning the Minimum Wage

Watch Video

The title of this video is: “An employee earning minimum wage was watching Korean dramas/Netflix out of boredom at work—until the boss walked in.”

In the video, a male clerical worker shares the daily realities of his low-paying and monotonous job on TikTok. Reportedly working in the tax sector, he reveals his challenges: “I tried to work but the internet was too slow to load the page,” or “It’s all declarations and errors—there’s no time to talk about love.” He frankly narrates the constraints of his working environment.

Limited Use of Household Income

Watch Video

The woman in this video is a mother of young children. While waiting at the supermarket checkout line, her cart is filled with milk, snacks, and instant noodles. She remarks: “I’ve spent my entire salary just to buy a month’s worth of takjil (light meals after fasting) for Ramadan.”

In another post, she says: “February 28: salary day. March 20: THR (holiday bonus). March 31: salary day… But after calculating the costs for Eid al-Fitr—new clothes, gifts for parents and in-laws, gifts for nephews—I realized that all I had left was my faith in the holy day.”

Although many want to cut back on such expenses to ease household budgets, cultural expectations often make that difficult. During Eid al-Fitr, for example, there is a customary practice of buying new clothes. As a result, not everyone can save their bonuses.

Nevertheless, it is consumers like these who continue to drive the Indonesian economy.

C2 (Participation in business meetings and purchasing goods): $230
C19 (After-sales service) / C20(Installation and repair of machinery): $300
D2 (Participation in business meetings and purchasing goods (1-year validity)): $380
E23/E24/E25 (Work VISA): $1,500

Significant Disparities in Wage Levels Between Regions and Companies

Although Indonesia’s minimum wage continues to rise each year, significant disparities remain among provinces. In urban areas with high living costs, wage increases have not kept pace with rising prices, which has reportedly weakened consumer purchasing power.

Trends in minimum wage policies have a broad impact on both the labor market and the national economy. Going forward, close attention must be paid to how these trends evolve. At the same time, given that minimum wage regulations apply to only a small portion of employers, careful consideration is needed when evaluating the actual influence of the minimum wage system across different sectors.