Indonesia Increases Minimum Wage for 2022

Posted by Written by Ayman Falak Medina Reading Time: 2 minutes

Indonesia has increased the average minimum wage of each province by 1.09 percent for 2022. The figure was obtained through the new guidelines on minimum wage under Government Regulation 36 of 2021 (GR 36/2021) — one of the implementing regulations of Indonesia’s Omnibus Law.

Under GR 36/2021, the minimum wage is based on the economic and employment conditions, which are:

  • Purchasing power parity;
  • Manpower absorption levels; and
  • Median wage variables (the margin between the 50 percent of the highest wages and 50 percent from the lowest 50 percent of the lowest wages from employees in the same position).

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In addition, the government also takes into account the per capita consumption of households as well as economic growth and inflation.

GR 36/2021 has also abolished the sectoral minimum wage.

What are the new rates for 2022?

The following rates represent the minimum wage of each province in Indonesia. The rates in cities or districts are normally higher than the provincial minimum wage.

Indonesia-Minimum-Wage-2022

Hourly wages for part-time workers

Through GR 36/2021, part-time workers are eligible for hourly wages — a first for the country. The formula for determining the hourly wage is as follows:

Hourly wage = Monthly wage/126

To calculate the daily wage:

Six working days/week

Daily wage = Monthly wage/25

Five working days/week

Daily wage = Monthly wage/21

The employer and employee are allowed to set their agreement, but the final salary should not be lower than the calculation using the aforementioned formulas.

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