Indonesia's 2027 Minimum Wage Is Not Set Yet: How to Budget Payroll Before the Number

As of 10 November 2026, the Indonesia minimum wage 2027 figure has not been announced. Metro TV News reported on 27 October 2026 that Minister of Manpower Yassierli is targeting the last week of November 2026 to finish the initial discussion, at least at the level of the ministry's own evaluation, and that he said he does not yet know the exact date.

For owners and managers, that means next year's payroll budget has to be drafted before the number exists. You do not need to wait. What you need is not a correct guess but a budget that stays safe across several outcomes.

What is known so far

The term to know is UMP, short for Upah Minimum Provinsi, the provincial minimum wage. A few points have been reported, and it helps to separate decisions from proposals.

• Governors decide. Katadata reported on 27 October 2026 that each governor sets the UMP with input from the Provincial Wage Council. The final number differs by province.
• Unions have made a proposal. According to Katadata, the trade union KSPI and the Labour Party (Partai Buruh) proposed a 2027 increase of 7.5% to 9.5% and asked for the UMP to be set on 1 November 2026. That is a proposal, not a decision.
• There is no official figure and no announcement date. The minister's target is for the discussion, not for the decision itself.

Sources differ on the legal basis

This is where the reporting does not line up, and we will not pick a side for you.

CNN Indonesia also described Article 139 of Law 27/2026: the formula considers economic growth, inflation and a certain index with a floor of 0.5 and a ceiling of at most 1. The final minimum wage is the higher of the formula result and the value of decent living needs (kebutuhan hidup layak, or KHL) agreed by the regional wage council.

The difference matters in practice. An index range of 0.5 to 0.9 and a range of 0.5 to 1 can produce different numbers, and the comparison against KHL can push the final figure higher. Until there is an official announcement, treat every number as an estimate.

Build three scenarios, not one number

What follows is our advice, not reported fact. Add three columns to your budget sheet:

1. Low scenario. A conservative figure you choose yourself. It is purely a planning assumption.
2. Middle scenario. For example 7.5%, the lower end of the union proposal.
3. High scenario. For example 9.5%, the upper end of the union proposal.

The aim is not to forecast. The aim is to know whether your cash position survives the high scenario. If you can still pay wages in that case without delaying supplier bills, you are fine. If you cannot, you have several weeks to find a way through instead of several days.

Which costs move with the wage

A common mistake is to budget for base pay only. When wages rise, other lines usually move with them:

• Staff paid exactly at the minimum wage. They are affected for certain. Count them.
• Staff paid slightly above the minimum. When the bottom rises, the gap to more senior people narrows. Decide now whether you will keep that gap.
• Social security contributions calculated from wages. They follow the wage base you report.
• Overtime pay. Overtime is calculated from the hourly wage, so the rate rises too.
• The holiday allowance. In Indonesia this is THR (Tunjangan Hari Raya), and it follows the monthly wage, so the first THR after the increase rises too.
• Allowances set as a percentage of base pay, if you use that pattern.

Add these lines up for each scenario. That total is your real monthly payroll cost, not base pay multiplied by a percentage.

What you can do this week

• List every employee with current wage, start date and contract status. Mark who sits at or near the minimum wage.
• Note the province where each person works. If you have a branch in another province, the figure can differ.
• Calculate monthly payroll under all three scenarios, including the knock-on lines.
• Review selling prices and customer contracts due for renewal in January. If labour costs rise, adjusting prices at renewal is easier than mid-contract.
• Decide who watches for the governor's announcement in your province and who updates the numbers in payroll.

Once the governor announces the figure

Agree the sequence now so late December is calm:

1. Keep a copy of your province's official decision, not a screenshot of a news article.
2. Update wages for anyone below the new figure and record the effective date.
3. Recalculate contributions, overtime rates and the THR base.
4. Tell employees in writing before the first pay run at the new figure.
5. Compare the real number against your three scenarios and adjust the full-year budget.

If payroll is still calculated by hand in a spreadsheet, moments like this are when errors creep in. Polynusa keeps attendance, leave and payroll in one place, so a wage change is recorded once. Details are on the pricing page.

Note: this article summarises news reports and is not legal advice. Confirm the figure and the legal basis that apply to your business through your provincial government's official announcement, the Ministry of Manpower, or your consultant.

Sources

• CNN Indonesia, 10 November 2026
• Metro TV News, 27 October 2026
• Katadata, 6 October 2026
• Katadata, 27 October 2026

FAQ

Has Indonesia set the 2027 minimum wage?

No. As of CNN Indonesia's report on 10 November 2026 there is no official figure and no announcement date; the Minister of Manpower is targeting the end of November 2026 for the initial ministry-level discussion.

How much will the minimum wage rise in 2027?

Nothing is decided. The 7.5% to 9.5% range is a proposal from the trade union KSPI and the Labour Party, not a government decision.

Who sets the provincial minimum wage in Indonesia?

Each governor sets the provincial minimum wage with input from the Provincial Wage Council, so the figure differs by province.