Indonesian Minimum Wage, Paid Leave and Overtime Laws

8 min readJul 12, 2023

Legal background

Indonesia has a number of minimum wages, set regionally.

The basis for wages is set out in the Manpower law, law 13 of 2003, as modified by the ‘work creation’ omnibus law (currently law 6 of 2023).

Article 88, as modified, provides that the government sets regulations on:

minimum wage
overtime pay
absence/leave pay

via Peraturan Pemerintah.

According to Article 88C, the minimum wage is set by the Governor per Province (UMP), as well as optionally per Kota or Kabupaten (UMK), at a higher rate.

According to article 88E(2) “Pengusaha dilarang membayar Upah lebih rendah dari Upah minimum.” That is entrepeneurs/businesses cannot pay wages below the minimum wage. Therefore there is NO applicability for household workers.

According to 90B meanwhile, the minimum wage for usaha mikro and usaha kecil, or micro and small businesses can be set at a lower rate.

The definition of UMKM (micro, small, and medium businesses) is UU 20/2008 which delegates it to PP, currently PP 7/2021.

This defines businesses into four categories based on when they started doing business, before or after 2nd February 2021.

Before 2/2/21, based on turnover:

micro <2 billion per year
small 2–15 billion
medium 15–50 billion
large 50+ billion

For businesses which began trading after 2/2/21 business size status is based on business capital excluding the land and the building which is the place of business:

micro: <1 billion rupiah
small: 1-5 billion
medium: 5–10 billion
large: 10+ billion

Therefore three categories exist:

Small and micro business — a special ultra-low minimum wage applies
Medium and large business — standard minimum wage applies
Private households (maids, babysitters, other household staff)— no minimum wage is applicable, market forces apply

Small and micro business minimum wage

The current government wage regulation is PP 36/2021. This provides for pay on the basis of agreement between staff and employer, at a minimum of:

50% of the average consumption per person by province (rata-rata konsumsi masyarakat pada tingkat provinsi), OR
25% above the poverty line (garis kemiskinan)

whichever is greater.

In addition, to pay these low wages (i.e. those below such businesses should:

use traditional resources (‘sumber daya tradisional’)
and not be in a high-tech or capital-intensive busienss sectors (‘tidak bergerak pada usaha berteknologi tinggi dan tidak padat modal’)

Small businesses not meeting those criteria should abide by normal wage laws.

The resulting micro/small business monthly minimum wage figures based on most recent (September 2022) BPS data, in thousands of IDR:

Aceh 754
Sumatera Utara 705
Sumatera Barat 799
Riau 780
Jambi 691
Sumatera Selatan 618
Bengkulu 750
Lampung 654
Kep. Bangka Belitung 1092
Kep. Riau 928
DKI Jakarta 1333
Jawa Barat 747
Jawa Tengah 581
DI Yogyakarta 844
Jawa Timur 607
Banten 834
Bali 791
Nusa Tenggara Barat 624
Nusa Tenggara Timur 570
Kalimantan Barat 662
Kalimantan Tengah 760
Kalimantan Selatan 725
Kalimantan Timur 949
Kalimantan Utara 939
Sulawesi Utara 633
Sulawesi Tengah 691
Sulawesi Selatan 578
Sulawesi Tenggara 563
Gorontalo 623
Sulawesi Barat 533
Maluku 831
Maluku Utara 666
Papua Barat 854
Papua 808

Minimum wage for medium/large businesses

The rates are set for the following calendar year in each province, and for 2023 were set in 2022 as (in ,000rp, rounded up):

Aceh 3414 (generally applicable, except Banda Aceh and Aceh Tamiang)
Sumatera Utara 2711 (applicable in only 7 of 33 areas, UMK up to 3624)
Sumatera Barat 2743 (applicable everywhere)
Riau 3192 (ineffective: UMK is 3225–3724)
Jambi 2943 (applies in 7 of 11 areas, UMK up to 3231)
Sumatera Selatan 3405 (applies in 12 of 17 areas; UMK up to 3566)
Bengkulu 2419 (applies in 7 of 10 areas; UMK up to 2716)
Lampung 2634 (applies in some; UMK up to 2992)
Bangka Belitung 3499 (applies in all)
Kepulauan Riau 3280 (applies in some; UMK up to 4501)
DKI Jakarta 4902 (applies in all)
Banten 2662 (ineffective, UMK: 2945–4658)
Jawa Barat 1987 (ineffective, see below)
Jawa Tengah 1959 (applies in some; UMK up to 2681)
DI Yogyakarta 1982 (ineffective; UMK: 2050–2325)
Jawa Timur 2041 (ineffective: UMK 2115–4526)
Bali 2714 (applies in some; UMK up to 3164)
NTB 2372 (applies in some; UMK up to 2599)
NTT 2124 (applies in all except Kupang 2188)
Kalimantan Barat 2609 (applies in some; UMK up to 3086)
Kalimantan Tengah 3182 (ineffective; UMK 3195–3596)
Kalimantan Selatan 3150 (applies in some; UMK up to 3294)
Kalimantan Timur 3202 (ineffective; UMK 3262–3676)
Kalimantan Utara 3252 (ineffective; UMK 3320–4056)
Sulawesi Utara 3485 (applies in all except Manado: 3530)
Sulawesi Tengah 2600 (applies in some; UMK up to 3360)
Sulawesi Selatan 3386 (applies in all except Makassar: 3530)
Sulawesi Tenggara 2759 (applies in some; UMK up to 3108)
Gorontalo 2990 (applies in all)
Sulawesi Barat 2872 (applies in some; UMK up to 2905)
Maluku 2813 (applies in all)
Maluku Utara 2977 (applies in all except Ternate 3040)
Papua Barat 3282 (applies in all)
Papua 3865 (applies in all)

It is necessary to check separate rates per Kabupaten, e.g., in Bali:

Badung 3164
Denpasar 2995
Gianyar 2838
Tabanan 2824
Jembrana 2739
Karangasem 2731
Buleleng 2717
Klungkung 2715
Bangli — provincial rate (2714)

In several areas, all of the divisional rates are higher than the provincial, so the provincial is not effective. E.g., for West Java:

Karawang 5177
Kota Bekasi 5159
Kabupaten Bekasi 5138
Depok 4695
Kota Bogor 4640
Kabupaten Bogor 4521
Purwakarta 4465
Kota Bandung 4049
Bandung Barat 3481
Kab. Bandung 3493
Cimahi 3515
Sumedang 3472
Kab. Sukabumi 3352
Kota Sukabumi 2748
Subang 3274
Cianjur 2894
Kota Tasikmalaya 2534
Kab. Tasikmalaya 2500
Kota Cirebon 2457
Kab. Cirebon 2431
Indramayu 2452
Majalengka 2181
Kuningan 2102
Garut 2118
Ciamis 2022
Pangandaran 2019
Banjar 1999

Sectoral minimum wages

Sectoral minimum wages were abolished by the job creation law, and since 1 January 2022 no longer apply.

Daily minimum wages

For businesses (not private households), as per Article 17 of the wages regulation:

for businesses working a six day week, the monthly wage is divided by 25
for businesses working a five day week, the monthly wage is divided by 21.

Therefore for example, in a medium/large business as a restaurant in Badung Bali, employing staff working six days per week paying the monthly minimum wage of 3,164,000rp the daily minimum wage would be 127,000rp.

A separate hourly minimum rate of pay applies for shorter working days, of 1/126 of the monthly minimum.

For example, a medium/large business in Badung could pay no less than:

25,200rp for one hour, based on the hourly rate
50,300rp for two hours, based on the hourly rate
75,400rp for three hours
100,500rp for four hours
125,600rp for five hours
126,600rp for a six or seven-hour day (daily calculation)
150,700rp for an eight-hour day (daily calculation)

Working hours and overtime

All of the pre-2021 regulations on pay were torn up by the work creation act.

The current regulations are Chapter 4 of Government Regulation 35 of 2021.

For businesses, working hours are defined as (Article 21)

7 hours a day and 40 hours per week for a six-day-week
8 hours a day and 40 hours a week for a five-day week

Excluded from this is (Article 23):

work that by its nature can be done in less than 7 hours a day and 35 hours a week
work with flexible hours
work done outside of a place of work

Article 26–29 provides that overtime in businesses is with:

maximum of 4 hours per day, 18 hours per week (some sectors exempt from restrictions)
with written/digital consent (article 28(1)
work done on public holidays and weekly rest days is not included within this 4/18 hours
if exceeding four hours in a day the worker must be provided with a meal of at least 1400 calories
applicable for workers except those defined in company regulations as executorial/strategic with higher rates of pay, who can work with unlimited hours

Overtime rates are as per Article 31(1):

1.5x hourly rate for the first hour
2x hourly rate for the second and subsequent hours

For working on weekly days off and public holidays (tanggal merah, not cuti bersama), businesses must pay:

double the hourly rate for the normal hours of work (seven hours for six days a week, eight hours for five days a week)
triple the hourly rate for the next hour
quadruple rate for subsequent hours

And if the work on a holiday is on a shortened work day, e.g., an office that closes at 3pm on Friday and otherwise at 5pm, and Friday is a public holiday:

double for the first five hours
triple for the sixth hour
quadruple for the seventh, eighth, ninth hours

The rate of hourly pay for the purposes of overtime is given in Article 172, which is 1/173 of monthly pay, calculated as the total pay including fixed allowances but not variable allowances, however if total pay + fixed allowances is less than 75% of the normal monthly pay due to high variable allowances, than 75% of the normal monthly pay is used instead.

Therefore, a business paying 3.15 million rupiah per month without allowances and a five-day working week, eight-hour working day, has a daily rate of pay of 1/21*3150000 = 150,000rp, however for the case of overtime on a public holiday, the pay is calculated as follows:

hourly pay = 3,150,000/173= 18,208rp per hour
overtime pay during normal hours = 18,208 * 8 hours * 2 (double time) = 291,329rp (slightly less than double the daily pay)

For a six-day week with the same effective daily pay of 150,000rp, which is 3.75 million rupiah per month, the overtime due for a normal seven-hour-day would be 303,468rp (slightly more than double the daily pay).

For a daily casual worker in Badung, it can be seen that the minimum pay rates are:

6 or 7 hour day: 126,600rp (1/25 of monthly UMK)
8-hour day: 151,000rp (1/21 of monthly UMK)
9-hour day: 178,1000rp (1/21 of monthly UMK) + 1.5/173 * UMK
beyond 9 hours: additional 36,600rp per hour (2/173 * UMK).

Article 79 of the manpower act provides that for business employees’ rest hours are:

half-an-hour after four hours work
at least one day rest per week

Paid Leave

Workers who do not turn up to work do not get paid, however for workers at businesses:

they are entitled to 12 days annual paid leave, after 12 months continuously have been worked (Article 79 Manpower Act)

Sick leave at:

up to two days a month due to period pains.

And sick leave of:

four months full pay
four months more at 75% pay
four months more at 50% pay
four months more at 25% pay

Paid leave of:

three days to get married
two days for their child’s wedding
two days for their child’s circumcision
two days for their child’s baptism
two days for their wife’s childbirth or stillbirth/miscarriage
two days for their spouse, child, parents, or in-laws dying
one day for another member of the same household dying, except as per the previous
once during a course of employment for religious obligations, for the entire period of religious obligation
during education/training required by the employer

Article 82 provides that pregnant women working for businesses get 1.5 months paid leave before their due date, 1.5 months paid leave after, and also 1.5 months after a miscarriage.

Note that wage laws apply to all businesses, however small and micro business are exempt from provisions on:

compensation for fixed-term contracts
minimum wage as per above
severance/unemployment pay
long-service pay
compensation for untaken leave