Indonesia: Implementation of Government-Funded Salary/Wage Subsidies
Indonesian Ministry of Manpower Regulation No 5 of 2025 (“MoM Reg 5/2025”) has recently issued, primarily focus on revising the eligibility criteria for workers entitled to receive the Wage Subsidy (Bantuan Subsidi Upah or BSU), as well as the distribution scheme governing the disbursement of the BSU, which previously regulated under Indonesian Ministry of Manpower Regulation No 10 of 2022.
Within the issuance of this new regulation, the Government will provide an additional subsidy amounting to IDR600,000 paid in a lump sum valid for a duration of two months to Indonesian citizens who earn less than or equal to IDR3.5 million (or less than their region’s minimum wage if such minimum wage provisions is higher than IDR3.5 million) per month.
Such citizens must also hold active participation in the Manpower Social Security Programme known as BPJS (Badan Penyelenggara Jaminan Sosial) and be registered with a Citizen Identification Number (Nomor Induk Kependudukan or NIK). In this regard, the Indonesian citizens who falls under such criteria will obtain IDR300,000 each month from the Government.
Through the enactment of MoM Reg 5/2025, the Government demonstrates its effort to enhance the accuracy, fairness and efficiency of the BSU programme by recalibrating eligibility requirements, refining priority criteria and clarifying the disbursement mechanism. These adjustments are intended to ensure that wage subsidies are more effectively targeted at vulnerable workers who are most in need of support, thereby reinforcing the BSU’s role as a social safety net in times of economic pressure.
