Jakarta, Bali and Lombok have followed the recommendation from the Minister of Manpower (Permenaker) Number 16 of 2024 to increase the salaries by 6.5%. The decision is following the economic growth and inflation rate currently happening in Indonesia. The wages in Indonesia follow Permenaker’s recommendation, which is a decision at the province level.
Types of Minimum Wages in Indonesia
Upah Minimum Provinsi (UMP) is the minimum provincial wage in Indonesia. This means that no company can offer a lower salary than this amount on a monthly basis.
Upah Minimum Sektoral Provinsi (UPMSP) or Provincial Sectoral Minimum Wage is the minimum wage the sector can offer an employee in Indonesia. This UPMSP applies, for example, to the tourism sector or a specific branch. Bali applies, for example, a specific minimum wage in the tourism sector.
Upah Minimum Kabupaten/Kota (UMK) or Regency/City Minimum Wage is decided at the Kapubaten level or city level. This amount is usually above the UMP and cannot be below it.
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Jakarta minimum wage for 2025
The Provincial Government of the Special Capital Region of Jakarta (Daerah Khusus Ibukota Jakarta – DKI Jakarta) has set the Provincial Minimum Wage the UMP for 2025 at Rp. 5,396,761 per month, reflecting a 6.5% increase compared to the 2024 UMP. This new wage will take effect on 1st January, 2025.
Bali minimum wage for 2025
The minimum wage for Bali in 2025 (Bali’s UMP) will rise to Rp 2,996,500 compared to Rp 2,813,672 in 2024, while the UPMSP will increase to Rp 3,025,000.
The Kapubaten of Bangli, Klungkung, Karangasem, Buleleng, and Jembrana are aligned with the provincial UMP.
Denpasar, Gianyar, Badung, and Tabanan will publish their rate from December 18th 2024.
Lombok Minimum Wage for 2025
The minimum wage in Lombok will increase by 6.5, following the recommendation of the central government to reach Rp 2,610,000 from Rp 2,450,900. Each Kapubaten will publish their own rate no later than 18th December as well.
What business owners need to do
Business owners need to increase the minimum salary if the current wage is below the UMP in the province where they have their business or where the worker is registered. We recommend discussing with other employees and being prepared to have requests from employees to have their salary increased, as a 6.5% increment causes some employees to be closer to the minimum wage. Having a minimum wage increase usually causes employees to negotiate their salary at the end of the year.
Business owners have until 1st January to comply with the regulations and implement the payroll by the end of January. Contact us to learn more or handle the changes with your payroll and see if you need to pay tax on it now.
Also read: Taxation and How to Work Legally in Bali Remotely
