December 24, 2025 | 05:20 pm
TEMPO.CO, Jakarta - Indonesia’s capital, Jakarta, has set its provincial minimum wage (UMP) for 2026 at Rp5,729,876, Governor Pramono Anung Wibowo announced on Wednesday, stressing that all companies operating in the city must comply with the new regulation.
Pramono said the Jakarta provincial government will closely monitor employers to ensure implementation of the wage increase.
“If there are companies that fail to apply it, the Jakarta provincial government will certainly take firm action,” he said at Jakarta City Hall on December 24, 2025.
The governor said the new minimum wage will take effect on January 1, 2026. He did not, however, specify what sanctions may be imposed on companies that fail to meet the updated wage requirement.
Jakarta’s 2026 UMP represents a 6.17 percent increase from the 2025 level of Rp5,396,761, amounting to an additional Rp333,115 for workers.
Pramono said the wage adjustment follows Indonesia’s Government Regulation No. 49 of 2025 on wages, which sets a national formula for determining annual minimum wage increases.
Under the regulation, wage increases are calculated based on inflation plus economic growth multiplied by an “alpha” coefficient.
The central government has set the alpha range for the 2026 UMP between 0.5 and 0.9, with regional governments authorized to determine the final figure. Pramono said Jakarta selected an alpha of 0.75 after discussions within the Wage Council involving representatives of labor unions and business groups.
He acknowledged that negotiations were marked by differing views, with business groups proposing an alpha of between 0.5 and 0.55, while labor representatives pushed for a figure above 0.9.
“Fortunately, the final figure has now been accepted by all parties,” said Pramono, a senior figure in the Indonesian Democratic Party of Struggle.
Alongside the wage increase, Pramono said the Jakarta provincial government will continue to provide subsidies and support programs for both workers and employers. For workers, these include public transportation subsidies, food assistance, free health check-ups, and access to clean drinking water through the city-owned utility PAM Jaya.
For businesses, particularly micro, small, and medium enterprises (MSMEs), the government will offer incentives such as streamlined licensing, improved public services, regulatory relaxation, extended incentives, and access to training and financing, he said.
Anastasya Lavenia Yudi contributed to the writing of this article.
Read: Jakarta Raises 2026 Minimum Wage by 6.17% to Rp5.72 Million
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