Indonesia & Bali Minimum Wage 2022
A company’s proprietors and investors will always have an obligation and responsibility to guarantee their representatives’ prosperity and financial security. Competitive remuneration is an effective tool in drawing in and retaining talents or to put it another way, there is value in empowering and encouraging workers to strive for continuous improvement in their craft. Accordingly, businesses must compensate competitive wages that align with legal values.
Indonesia Minimum Wage System
Minimum wage policy is an established system implemented by the state governments at the national government’s course to guarantee that workers with contracts of less than a year can support themselves adequately. The development of the neighborhood economy and the inflation rate is considered when determining minimum wage levels.
Additionally, to implement the new Job Creation Regulation, the Indonesian government modified and revised various minimum wage regulations in the Government Regulation of No. 36 2021 (GR 36/2021).
Minimum Wage in Indonesia
In Indonesia, there are two kinds of minimum wages which are known as the Provincial Minimum Wage (UMP) and the District/City Minimum Wage (UMK).
In 2022, Indonesia increased the minimum wage across the country by 1.09 percent. The Government Regulation 36 of 2021 (GR 36/2021) is one of the newly implemented rules of Indonesia’s Omnibus Law, and it contains the new instructions on minimum wage.
Under GR 36/2021, The Indonesian minimum wage is based on the economic and employment conditions, which are:
- Purchasing power parity;
- Labor supply absorption levels;
- Median wage variables (the margin between the 50 percent are of the 50% highest wages and 50 percent lowest wages from employees within the same position);
- In addition, the government also takes into account the per capita consumption of households as well as economic growth and inflation.
UMP in Indonesia 2022 – Provincial Minimum Wage
|Province||Monthly minimum wage rate
|Province||Monthly minimum wage rate
|Aceh||3,166,460||West Nusa Tenggara||2,207,212|
|North Sumatra||2,552,609||East Nusa Tenggara||1,975,000|
|West Sumatra||2,512,539||West Kalimantan||2,434,328|
|Riau Islands||3,144,466||Central Kalimantan||2,922,516|
|South Sumatra||3,144,146||North Kalimantan||3,310,723|
|DKI Jakarta||4,452,724||Southeast Sulawesi||2,710,595|
|West Java||1,841,487||Central Sulawesi||2,390,739|
|Central Java||1,813,011||South Sulawesi||3,165,876|
|Special Region of Yogyakarta||1,840,951||West Sulawesi||2,571,328|
Bali Minimum Wage 2022 (UMK Bali 2022)
The Minimum Wage in 2022 is IDR 22,971 higher than in 2021, which was IDR 2,494,000. The determination of the Provincial Minimum Wage is stated in the Decree by the Governor of the Province of Bali.
Minimum wages fluctuate among Bali’s nine administrative districts (the UMK Bali). Each of Bali’s districts must at minimum give a salary of the provincial minimum wage.
|Regency in Bali||Minimum salary 2022 (IDR)|
If an Indonesian company fails or neglects to pay its employees the legally mandated minimum wage, the governmental authority may take legal action against the company. Employers are not permitted to pay workers less than the minimum wage, as stated in article 90, paragraph (1) of Undang-Undang Republik Indonesia number 13/2003.
Any individual who breaches the provisions referred to in Article 90 Paragraph (1) shall be subject to imprisonment for a term of not less than 1 (one) year and not more than 4 (four) years and/or a fine of not less than 100,000,000 (one hundred million rupiah) and not more than 400.000.000. (four hundred million).
During our experience in this field, we often find companies, especially in Bali, who continue to pay their workers less than the legally mandated minimum wage. We are aware that the minimum wage in Bali is already very low, so in order to support Balinese people, we only work with companies who are willing to pay their workers above the minimum wage. Because of the potential legal ramifications and to respect the local people, we firmly encourage all companies to adhere to this policy strictly.
Still confused about the latest Indonesia minimum wage system?
Due to frequent recurring changes in government rules, the payroll procedure in Indonesia has grown convoluted and tedious. Many businesses in Indonesia prefer to outsource their payroll services to experts or specialists who are familiar with the country’s tax and labor regulations rather than handle the administrative burden themselves.
Suppose you outsource your raw payroll data to Bali Staff Solutions, an established Indonesian provider of recruiting and HR services. In that case, you can rest assured that it will be handled in accordance with all applicable laws and policies. Moreover, our employer of record (EOR) service can also help you hire new staff, handle administrative tasks and create legally binding contracts with your employees.