The minimum wage increase for 2026 has become a major concern for many workers across Indonesia. The term UMR (Upah Minimum Regional) is actually no longer used officially. Today, the government applies two formal terms for minimum wages: Provincial Minimum Wage (UMP) at the provincial level, and Regency/City Minimum Wage (UMK) at the district or city level.
However, the term UMR is still widely used by the public. That’s why discussions about UMR 2026 remain relevant—especially to understand wage increase projections in Indonesia for 2026, including key factors such as inflation that influence the final adjustment. For complete and up-to-date information on UMR 2026, read this article until the end.
What Is the Percentage Increase of UMR 2026?
Public discussion about how much the minimum wage will increase began intensifying in mid-2025. Several labor unions, including KSPI and the Labor Party, proposed an increase of around 8.5%–10.5% to ensure wages keep up with rising inflation and living costs.
Meanwhile, the Ministry of Manpower is still calculating the final increase by considering inflation, economic growth, and labor productivity. The determination of UMP 2026 also follows Constitutional Court Decision No. 168/PUU-XXI/2023, which revised several minimum wage calculation rules under the Job Creation Law.
With this new formula, the government aims to set fairer UMP and UMK rates for workers while maintaining business stability. In some regions, such as South Sulawesi, labor unions have proposed an increase of up to 10%, from IDR 3,657,527 to approximately IDR 4,023,279. The final decision will be officially announced in November 2025.
Overall, the UMK 2026 increase is expected to range between 8.5% and 10%, depending on regional economic conditions.
Key Factors Affecting the UMR 2026 Increase
Minimum wages are not set arbitrarily. The government carefully considers several crucial factors, including inflation, economic growth, labor productivity, and industrial competitiveness. Another important reference is the Decent Living Needs (KHL), which reflects how much income workers need to meet their daily necessities.
The government must balance the interests of workers and employers. If wages increase too sharply, production costs may rise and reduce industrial competitiveness. That’s why the UMP and UMK 2026 calculation method is designed to be clearer, more realistic, and aligned with each region’s economic condition.
New Formula for the 2026 Minimum Wage Increase
Before finalizing the wage increase regulation, President Prabowo gathered input from various stakeholders, especially labor unions. Based on these discussions, the government introduced a new formula for calculating the 2026 minimum wage:
Wage Increase = Inflation + (Economic Growth × Alpha)
The Alpha factor represents the contribution of labor to economic growth in each province or regency/city. This explains why UMP and UMK 2026 figures vary across regions, as they reflect local economic performance.
Complete List of UMR 2026 Across All Indonesian Provinces
Below is the Provincial Minimum Wage (UMP) 2026 for all 38 provinces in Indonesia. These figures are finalized through each Governor’s Decree and will take effect on January 1, 2026.
Sumatra
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Aceh: 3,932,552
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North Sumatra: 3,228,949
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West Sumatra: 3,182,955
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Riau: 3,780,495
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Riau Islands: 3,879,520
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Jambi: 3,471,497
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South Sumatra: 3,942,963
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Bengkulu: 2,827,250
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Lampung: 3,047,734
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Bangka Belitung: 4,035,000
Java & Bali
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DKI Jakarta: 5,729,876
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Banten: 3,100,881
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West Java: 2,317,601
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Central Java: 2,327,386
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DI Yogyakarta: 2,417,495
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East Java: 2,446,880
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Bali: 3,207,459
Nusa Tenggara
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West Nusa Tenggara (NTB): 2,673,861
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East Nusa Tenggara (NTT): 2,455,898
Kalimantan
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West Kalimantan: 3,054,552
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Central Kalimantan: 3,686,138
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South Kalimantan: 3,725,000
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East Kalimantan: 3,762,431
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North Kalimantan: 3,775,243
Sulawesi
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North Sulawesi: 4,002,630
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Central Sulawesi: 3,179,565
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South Sulawesi: 3,921,088
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Southeast Sulawesi: 3,306,496
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Gorontalo: 3,405,144
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West Sulawesi: 3,315,934
Maluku & Papua
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Maluku: 3,334,490
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North Maluku: 3,510,240
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Papua: 4,436,283
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West Papua: 3,841,000
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Central Papua: 4,285,848
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Highland Papua: 4,508,714
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South Papua: 4,508,100
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Southwest Papua: 3,766,000
Disclaimer: The figures above are rounded estimates based on average provincial increases. For exact figures down to the last decimal, please refer to each province’s official Governor’s Decree.
Plan Your Finances Better with the 2026 UMR Increase
That’s a complete overview of UMR 2026, from the projected percentage increase to the full provincial wage list. Understanding the minimum wage in each region helps you adjust your financial planning and lifestyle preparation for 2026.
Having a solid financial strategy allows you to manage expenses more effectively as wages increase. Beyond income, you can also take advantage of financing solutions from BFI Finance to support other financial needs, such as additional capital for business growth.
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