Jakarta, hitclubapk3 Indonesia
—
The government officially regulates the formula
remuneration
which will be used as the basis for determining the provincial minimum wage (
UMP
) 2026.
This is stated in the Government Regulation (PP) concerning Wages which was signed by President Prabowo Subianto on Tuesday (16/12).
“Thank God, the PP on Wages has been signed by President Prabowo Subianto today, Tuesday, December 16 2025,” said Minister of Manpower Yassierli in a written statement.
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Yassierli said that the drafting of the PP on Wages had gone through quite a long study and discussion.Apart from that, the government also pays attention to input and aspirations from various parties, especially from Workers’ Unions.
So what is the new formula for UMP 2026?
In the latest regulation, Prabowo decided on a wage increase formula of Inflation + (Economic Growth x Alpha) with an Alpha coefficient range of 0.5-0.9.
“Of course, the President’s policy is a form of commitment to implementing MK decision Number 168/2023,” said Yassierli.
The calculation of the 2026 minimum wage increase will be carried out by the Regional Wage Council to be submitted as a recommendation to the Governor.
Apart from the issue of the UMP formula, the PP on Wages also regulates the determination of the Provincial Minimum Wage (UMP) and Regency/City Minimum Wage (UMK).
The regulation also stipulates that the Governor is obliged to determine the Provincial Sectoral Minimum Wage (UMSP) and can also determine the Regency/City Sectoral Minimum Wage (UMSK).
“Specifically for 2026, the Governor will determine the amount of wage increases no later than December 24 2025,” he said.
UMP Calculation Simulation
Using the new formula, here is a simulation of an increase in the national minimum wage:
2026 APBN inflation assumption: 2.5 percent
2026 APBN economic growth target: 5.4 percent
Alpha coefficient: 0.5-09
So the amount of increase in the average national minimum wage:
Minimum: 2.5% + (5.4%x0.5) = 5.2%
Maximum: 2.5% + (5.4%x0.9) = 7.36%
As a comparison, in 2025, the UMP calculation formula is stipulated in the Minister of Manpower Regulation Number 16 of 2024 concerning Determination of the 2025 Minimum Wage.
In Article 2 paragraph (2) Permenaker 16/2024, it is stipulated that UMP 2025 = UMP 2024 + UMP Increase Value.
The 2025 UMP increase value set is 6.5 percent.
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