Calculations and Formula for Setting the 2027 Provincial Minimum Wage

Jakarta — Manpower Minister Yassierli said the government was still calculating estimates of the cost of a decent standard of living (KHL), one of the considerations in setting the 2027 provincial minimum wage (UMP).

Speaking after a coordination meeting of ministries and agencies on the development of special economic zones (KEK) in Jakarta on Wednesday (21 October 2026), Yassierli said the calculations were based on data collected and the ministry’s evaluation.

The government aims to publish the KHL estimates soon as input for the minimum-wage-setting process.

“We will evaluate, estimate and calculate based on the available data. We aim to issue an estimate of what the KHL will look like. Last year (2025), we already had figures for each province,” Yassierli said.

In addition to estimating the KHL, the Manpower Ministry will discuss the wage-setting formula with the National Tripartite Cooperation Institution (LKS Tripartit Nasional) and the National Wage Council (Depernas), he said.

The discussions will cover the follow-up to statutory requirements, particularly those concerning the KHL and surveys that form part of the minimum-wage-setting process.

“Once the law is finalised, there will be discussions at the National Tripartite Cooperation Institution. The mandate concerns the KHL and surveys, so we will consider those. We will see what recommendations come from Depernas,” he said.

The 2027 UMP rates will be set by the governor in each province, taking into account input from the relevant provincial wage council.