Indonesia sets Minimum Wages To Increase of 10% For 2023

The Indonesian government has recently announced a minimum wage hike of 10% for 2023, providing additional financial stability to those workers subject to the changes. This initiative is part of a larger plan to combat growing inequality in Indonesia and promote sustainable economic growth, long-term poverty reduction, and improved living standards. 

The proposed increase will provide greater access to necessities and help bridge the gap between rich and poor within this rapidly growing nation. With this significant move, it’s clear that the Indonesian government has kept its promise to take care of its citizens first. This is especially true for lower-income people who can benefit most from improved quality of life through higher wages.  

How was the Indonesian minimum wage increase calculated?

The Indonesian government follows a methodical approach in calculating the minimum wage increase. It carefully considers factors such as inflation, productivity, and labor conditions in determining the amount of the wage hike. The government also considers regional disparities and the cost of living in different areas to ensure that all workers are fairly compensated.

The process begins with a Wage Council submitting its recommendations on minimum wage increases to the Ministry of Manpower. The Wage Council consists of representatives from labor unions, employers’ associations, and government agencies. The Ministry of Manpower then reviews these proposals before making the final decision.

The government also consults with experts such as economists. And statisticians to ensure that the wage increase is economically feasible and socially justifiable. The calculations consider all relevant factors, such as inflation, labor market conditions, regional disparities, and cost of living in different areas.

When will the Indonesian minimum wage increase take effect?

The Indonesian minimum wage increase for 2023 will take effect on 1st January 2023. The government has proposed a 10% increase in the monthly minimum wage, which amounts to an additional two million rupiahs added to the current IDR 3.6 million/month minimum wage rate. This is part of an effort by the government to improve the living standards of workers in Indonesia. 

The government has also proposed other benefits for workers, such as health insurance and pension schemes. Overall, this minimum wage increase is expected to benefit millions of people employed in Indonesia. This will hopefully help reduce poverty levels and improve Indonesia’s overall quality of life.

Who will the Indonesian minimum wage benefit?

The Indonesian minimum wage will benefit all workers in the country, regardless of their sector or occupation. This includes workers from both the formal and informal sectors and those employed by large corporations and small businesses. 

  1. The wage increase is expected to help reduce inequality between low-income households and give them more purchasing power, enabling them to meet their basic needs. 
  2. The increased wages are likely to stimulate economic growth and encourage greater investment in Indonesia’s workforce, leading to more jobs and improved quality of life for its citizens.
  3. Finally, wage increases should help reduce poverty as workers will have more disposable income to spend on food, housing, and other necessities.  
  4. Ultimately, the Indonesian minimum wage has the potential to benefit all of Indonesia’s citizens by providing increased income security, stimulating economic growth, and encouraging investment in its workforce. 

This will lead to more jobs and greater opportunities for everyone in the country. It is an important step toward reducing poverty and improving the quality of life for everyone in Indonesia. 

How often will the Indonesian minimum wage be reviewed?

The Indonesian minimum wage is reviewed every year. The review process takes place during October, with the new rates taking effect on January 1 of the following year.  To determine how much to raise the minimum wage, a committee known as the “National Wage Council” (NWC) gathers data from various sources, including the government and private sector employers. The NWC then makes its recommendation to the Minister of Manpower and Transmigration.

The minister considers the recommendations from the NWC before deciding on the new wage level. The Indonesian government must also consider inflation and other economic factors when setting the minimum wage. It is important to note that the inflation rate can vary yearly, so it is only sometimes certain how much the minimum wage will increase yearly.


The Indonesian government has announced that the minimum wage for workers in the country will be increased by 10% starting from January 1, 2023. This is part of an effort to improve living standards and reduce poverty. The government proposed a minimum wage increase after studying citizens’ purchasing power in different parts of Indonesia. Visit SeamlessGlobal to learn more about the Indonesian minimum wage increase to keep up with the rising prices of goods and services.