The average wage in Indonesia as of February 2025 is around IDR 3.094 million per month. This figure is crucial for businesses looking to expand here. (Reference)
Why? Understanding this wage average helps with cost planning, benchmarking, and ensuring compliance with labor regulations.
In this article, we’ll dive into the factors that influence wage variations across Indonesia, compare them with other countries, and explore what this means for businesses operating in or entering the Indonesian market.
Understanding the average wage in Indonesia is crucial for international business owners and companies considering expansion into Indonesia.
Let’s take a closer look at why this figure matters and how it can influence your expansion strategy in the country.
Average Wage in Indonesia: Why It Matters for Business Expansion?
In recent years, Indonesia’s economy has grown rapidly, as has its job market, with wages varying widely across different sectors and regions.
Understanding the average wage in Indonesia is crucial for businesses planning to expand here. It helps you estimate labor costs, manage talent acquisition, and make more informed decisions about your expansion strategy.
What is the Average Wage in Indonesia?
On a national scale, Indonesia’s average monthly wages vary greatly among industries and regions with estimates of around IDR 3 million to IDR 7 million.
But, it is also essential to learn that there are significant variations between Indonesia’s average and median salaries.
What’s the difference? Let’s examine further!
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Difference Between Average Wage and Median Wage
The average wage is calculated by adding all individual wages in a given group and dividing by the number of individuals.
In contrast, the median wage is the middle value when all wages are ordered from lowest to highest. In Indonesia, the median salary is typically lower than the average wage.
This difference occurs because a few high earners can skew the average upward, while the median wage is unaffected by these outliers.
Average Salary of Employees in Indonesia in 2025
A survey conducted by Badan Pusat Statistik (BPS) in February 2025 found that the average wage in Indonesia is approximately IDR 3,09 million.
This number represents an increase of 2,81% over the previous year and covers payments in cash or goods for employees permanently.
The Lowest Paying Sectors in Indonesia (2025)
Based on the latest data from BPS February 2025, the sectors with the lowest average net monthly wages (in IDR) are:
- Other Service Activities (R, S, T, U): ± IDR 1,808,930
- Agriculture, Forestry, and Fishing (A): ± IDR 2,247,459
- Accommodation and Service Activities (I): ± IDR 2,424,447
- Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (G): ± IDR 2,667,185
- Education (P): ± IDR 2,794,131
These sectors reflect ongoing challenges in wage growth, often tied to labor intensity and sector-specific productivity.
The Highest Paying Sectors in Indonesia (2025)
Conversely, several industries continue to pay well above the national average wage, driven by high demand for specialized skills and strategic roles. The highest paying sectors according to February 2025 data are:
- Mining and Quarrying (B): ± IDR 5,086,094
- Electricity, Gas, Steam and Air Conditioning Supply (D): ± IDR 5,040,313
- Financial and Insurance Activities (K): ± IDR 4,878,087
- Information and Communication (J): ± IDR 4,131,648
- Real Estate (L): ± IDR 4,042,854
These sectors highlight the premium placed on technical expertise and industry-specific knowledge.
Regions with the Lowest Minimum Wages (UMR) in 2025
On the other hand, several provinces maintain lower minimum wage levels. These are often areas with lower living costs, more abundant labor supply, and industries that are less capital-intensive.
- Central Java: IDR 2,169,349
- West Java: IDR 2,191,238
- DI Yogyakarta: IDR 2,207,657
- East Java: IDR 2,172,858
- West Nusa Tenggara: IDR 2,343,000
Regions with the Highest Minimum Wages (UMR) in 2025
Minimum wage adjustments in 2025 reflect the economic realities and living costs across Indonesia’s provinces. Some regions have set significantly higher UMRs due to urban development, infrastructure demands, and the need to match rising living expenses.
- DKI Jakarta: IDR 5,396,761 – The highest in Indonesia, driven by high living costs.
- Papua: IDR 4,285,850 – Reflects high logistics and geographic challenges.
- North Kalimantan: IDR 3,580,160 – Indicates strong regional economic growth.
- East Kalimantan: IDR 3,579,314 – Similar to its northern neighbor, showing stability.
- South Kalimantan: IDR 3,496,194 – Supports the growing trade and service sectors.
These provinces have the lowest UMRs, often influenced by local economic conditions and affordability benchmarks.
Wage Variations Across Different Factors
Variations of the average salary in Indonesia are based on several elements, including geographic location, industry, and education or experience level.
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Wages by Geographic Location
Each province may set its minimum wage regulations (UMP) in Indonesia by considering the regional economic condition, cost of living, and labor demand.
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Wages by Industry
The industry where a person works can highly affect the individual’s wages. Sectors with high profitability and demand for specialized skills may have higher rates than the average minimum wage in Indonesia.
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Wages by Education and Experience Level
Although it may differ across industries and geographic locations, individuals with higher education and advanced experience levels tend to have higher wages.
How do Indonesia’s Wages compare to Other Countries?
While the average salary in Indonesia remains lower than in Southeast Asian countries like Malaysia, Singapore, and Thailand, the wages are still higher and competitive with Vietnam and the Philippines.
However, the lower costs of living, strong economic growth, and competitive wages in specific industries continue to be an attractive destination for foreign business investments compared to its regional neighbors.
5 Benefits of Outsourcing to Indonesia
Indonesia has a lot to offer to the global economy, specifically for valued outsourcing solutions, with these five benefits.
1. Competitive Labor Costs with a Skilled Workforce
The country’s relatively competitive labor costs and skilled professionals provide cost-effective solutions for businesses, especially for labor-intensive tasks.
2. Rapid Digitalization and Industrial Growth
Industrial growth and rapid digitalization are driving great significance to the country’s economic development. It can provide foreign businesses access to a more connected and innovative workforce.
3. Attractive Tax and Business Incentives
With attractive tax and business incentives such as tax holidays and allowances, Indonesia offers a compelling destination for business expansion and foreign investment.
Learn more about the Types of Taxes on Employee Income in Indonesia.
4. Strong Economic Growth and Stability
Over the past decade, Indonesia has experienced huge economic growth with the most promising markets in Southeast Asia. The growing middle class and its diverse economy also support long-term stability.
5. Cost-Effective Business Operations
Because competitive labor costs and affordable operating expenses allow foreign businesses to reduce costs while maintaining the output quality.
How Can Abhitech’s Employer of Record Services Help?
The average wage in Indonesia is generally competitive with cost-effective labor costs compared to other Southeast Asia regions.
Rapid digitalization and industrial growth further enhance the compelling elements for companies looking for opportunities in the region.
Abhitech is here to provide EOR services to leverage your business expansion in Indonesia. Let us handle the local employment process with our leading outsourcing solution while you can focus on your core target.
Get started now and learn more about what we can do for you or get more insights by exploring our blogs.
