Indonesia to Maintain Same Formula for 2026 Minimum Wage Calculation

Unchanged Methodology with Modified Index

Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that the 2026 Provincial Minimum Wage (UMP) will use the same calculation formula as the previous year. The government is currently in the process of socializing the new rates before making an official announcement. The key change lies in the alpha index, which represents labor's contribution to economic growth.

Key Details of UMP 2026

• The UMP calculation formula remains unchanged from 2025
• A modified alpha index will be used, reflecting labor's economic contribution
• The government is conducting socialization before the official announcement
• The new UMP rates are expected to be released soon

Implications for Indonesian Economy

The decision on UMP 2026 will have significant implications for both workers and employers across Indonesian provinces. The adjustment in the alpha index suggests a nuanced approach to wage setting, potentially balancing between supporting workers' welfare and maintaining business viability.