New 2026 Minimum Wage Calculation Formula Issued: Labor Contribution Index Increased and Sectoral Minimum Wages Reintroduced

In 2021, the Indonesian Government introduced Regulation No. 36 of 2021 on Wages, which was subsequently amended by Regulation of the Government No. 51 of 2023 (collectively referred to as “ Regulation 36/2021 ”). As its title suggests, Regulation 36/2021 is currently serving as the country’s overall wage framework and covers a wide range of wage-related matters, including minimum-wage components, classifications and determinations. However, in order to maintain the overall purchasing power of Indonesian workers, while also safeguarding business continuity and national economic stability, the government has issued Regulation No. 49 of 2025 on the Second Amendment to Regulation 36/2021 (“ Second Amendment ”), which has been in force since 17 December 2025. [1]