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Salary negotiation in Indonesia: the minimum-wage floor and what must be in writing

Written by KarirAman editorial team Approved by Kaiser Khan (editor), Updated

Before negotiating pay in Indonesia, know the floor: your area's minimum wage (UMK). Negotiating at interview and offer stage, and what to put in writing.

Legal status: the Labour Protection Law was approved by the DPR and the Government on 6 October 2026 but has not been promulgated and its text is not public. Until it takes effect, the rules on this page apply.

Dewan Perwakilan Rakyat RI (emedia); Kementerian Ketenagakerjaan RI

Summary

  • Employers may not pay below the minimum wage (Law 13/2003 as amended by Law 6/2023, Article 88E).
  • Pay above the minimum wage is set by agreement between employer and worker (Article 90A), so negotiation happens above that floor.
  • A wage agreement lower than the regulations is void by law (Article 88A(4) and (5)).
  • A fixed-term (PKWT) contract must state the amount and method of wage payment (Government Regulation 35/2021 Article 13).
  • The religious holiday allowance (THR) is mandatory for workers with one month of service or more, so it is not up for negotiation.
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On this page
  1. What is the lowest pay an employer may offer in Indonesia?
  2. When is the right time to talk about salary?
  3. How can you find out a fair pay range?
  4. What is the difference between gross and net pay when negotiating?
  5. Which components can you negotiate besides base pay?
  6. Why must the agreed salary be in writing?
  7. How do you negotiate a pay rise after a year at work?
  8. What are the warning signs in a salary offer?

What is the lowest pay an employer may offer in Indonesia?

The floor is the minimum wage where you work: the regency or city minimum wage (UMK) if one is set, otherwise the provincial minimum wage (UMP). Law 13/2003 as amended by Law 6/2023, Article 88E, prohibits paying below the minimum wage, which applies to workers with less than one year of service. Under Government Regulation 36/2021 Article 23, the minimum wage is the lowest monthly wage, either without allowances or as base pay plus fixed allowances. Check your area's figure on KarirAman's minimum-wage pages.

When is the right time to talk about salary?

Salary is easiest to discuss once the employer shows interest, for example at the final interview or when an offer is made. Before that, know the minimum wage where you will work, the pay range for similar roles and your own living costs. Pay above the minimum wage is set by agreement between employer and worker (Law 6/2023, Article 90A of Law 13/2003), so it is reasonable to state the figure you expect and why.

How can you find out a fair pay range?

Combine several sources, because no single figure fits everyone. Start with your area's minimum wage as the floor. Then look at KarirAman's career guides and salary pages, which separate official BPS data from advertised figures and always label the source. Compare vacancies that list a pay range for the same position and city, and ask people already working in the field.

What is the difference between gross and net pay when negotiating?

Gross pay is the figure before deductions, while net pay is what you receive after deductions such as the worker's share of social-security contributions and income tax. Employers must register their workers with BPJS (Law 24/2011 Article 15), so always ask whether the figure offered is gross or net. Use KarirAman's take-home pay calculator or Panduan Warga's calculators to estimate the difference.

Which components can you negotiate besides base pay?

Besides base pay, you can ask about fixed allowances, variable allowances such as meal or transport money, work facilities and training. Note Government Regulation 36/2021 Article 23(2): if pay consists of base pay and variable allowances, the base pay must be at least the minimum wage. Things already required by law, such as THR, overtime pay and BPJS registration, are not up for negotiation.

Why must the agreed salary be in writing?

A written agreement protects you in a dispute. Government Regulation 35/2021 Article 13 requires a fixed-term (PKWT) contract to state the amount and method of wage payment. Law 6/2023 added Article 88A(4) and (5) to Law 13/2003: a wage agreement may not be lower than the regulations, and if it is, the agreement is void. Ask for an offer letter or contract that states base pay, allowances and the payment date.

How do you negotiate a pay rise after a year at work?

After one year of service, your pay is guided by the company's pay structure and scale rather than the minimum wage (Government Regulation 36/2021 Article 24). Article 21 requires employers to set a pay structure and scale and to tell each worker individually, at least for that worker's job grade. Ask for your grade, keep a record of your results, then request a conversation with your manager or HR.

What are the warning signs in a salary offer?

Be wary of pay or benefits that make no sense for an entry-level post or vague duties, which the Ministry of Manpower lists as a sign of a fake job. Other signs: you are asked to pay for training or a uniform before receiving pay, the salary is promised only verbally, or the employer refuses to write the figure in the contract. If in doubt, paste the offer into the job checker.

Checklist before accepting a salary offer

  • Base pay, or base pay plus fixed allowances, is not below your area's minimum wage.
  • You know whether the figure offered is gross or net.
  • The amount and method of payment are written in the offer letter or contract.
  • Overtime and THR rules are explained in line with the regulations.
  • Nobody asks you for money before you start work.

Not legal advice. For your own case, contact the official channels listed.

Frequently asked questions

Can the holiday allowance (THR) be negotiated?

No. Ministry of Manpower Regulation 6/2016 requires employers to pay the religious holiday allowance to workers on fixed-term or permanent contracts with at least one month of continuous service. What you can ask about are other components, such as fixed allowances, variable allowances or work facilities.

Is overtime paid separately from base salary?

Yes. Government Regulation 35/2021 Article 27 requires employers who make workers exceed normal working time to pay overtime wages, except for certain job grades. Ask during negotiation whether your position falls in an exempt grade, and get the answer in writing.

Can pay during probation be below the minimum wage?

No. Law 13/2003 Article 60(2) prohibits employers from paying below the minimum wage during probation. Probation is also allowed only for permanent workers (PKWTT) and for at most three months; fixed-term (PKWT) contracts may not include probation (Government Regulation 35/2021 Article 12).

Who wrote and reviewed this page?

Written by KarirAman editorial team Published Updated

Prepared with AI assistance. Checked against official sources and approved for publication by Kaiser Khan (editor). Approval date: .

Sources

The facts on this page come from these sources. Dates show when we opened them.

  1. Undang-Undang Nomor 6 Tahun 2023 tentang Penetapan Perppu 2/2022 tentang Cipta Kerja menjadi Undang-Undang (bagian ketenagakerjaan dan jaminan sosial) Kementerian Hukum RI (peraturan.go.id) · UU 6/2023 · accessed
  2. Peraturan Pemerintah Nomor 36 Tahun 2021 tentang Pengupahan Kementerian Hukum RI (peraturan.go.id) · PP 36/2021 · accessed
  3. Peraturan Pemerintah Nomor 35 Tahun 2021 tentang PKWT, Alih Daya, Waktu Kerja dan Waktu Istirahat, dan PHK Kementerian Hukum RI (peraturan.go.id) · PP 35/2021 · accessed
  4. Undang-Undang Nomor 13 Tahun 2003 tentang Ketenagakerjaan (teks asli) JDIH BPK RI · UU 13/2003 · accessed
  5. Peraturan Menteri Ketenagakerjaan Nomor 6 Tahun 2016 tentang Tunjangan Hari Raya Keagamaan bagi Pekerja/Buruh di Perusahaan JDIH BPK RI (peraturan.bpk.go.id) · Permenaker 6/2016 · accessed
  6. Undang-Undang Nomor 24 Tahun 2011 tentang Badan Penyelenggara Jaminan Sosial JDIH BPK RI · UU 24/2011 · accessed
  7. 6 Ciri Lowongan Kerja Bodong yang Perlu Diwaspadai Kompas TV · official statement via media · accessed
  8. DPR Sahkan UU Pelindungan Ketenagakerjaan (emedia DPR RI, 7 Oktober 2026) Dewan Perwakilan Rakyat RI (emedia) · accessed
  9. Menaker Ungkap Poin Penting UU Pelindungan Ketenagakerjaan yang Wajib Diketahui Pekerja Kementerian Ketenagakerjaan RI · accessed
How to cite

KarirAman (2026). Salary negotiation in Indonesia: the minimum-wage floor and what must be in writing. Updated 7 October 2026. https://kariraman.com/en/guides/salary-negotiation/

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