Minimum Wage by State (2026): Current Rates for All 50 States

Labor is one of the highest costs in any restaurant, and minimum wage laws directly shape that cost. Since 2009, the federal minimum wage has held at $7.25, roughly the current price of a McDonald’s Happy Meal, which, unlike the minimum wage, has actually gone up since ‘09. 

In 2026, some states mandate more than double that baseline, while others still follow the federal floor. Tipped employees, tip credits, and dual wage systems add another layer of regulation to track. This guide breaks down minimum wage rates across all 50 states and what operators need to know to stay compliant.

Disclaimer: This article is for informational purposes only and should not be considered financial or legal advice. Minimum wage laws are subject to change and may vary by locality. Please consult official state and local government sources or a qualified professional to verify current wage rates and requirements.

What is the minimum wage?

The federal minimum wage sets the baseline hourly pay that employers must provide to non-exempt employees. At $7.25 per hour, it is illegal for employers covered by the Fair Labor Standards Act (FLSA) to pay less than that amount. However, many states have established higher minimum wages. For example, Rhode Island’s minimum wage is $16.00 per hour in 2026. 

Minimum wage laws are often debated because they greatly impact both workers and businesses. While employees benefit from higher wages, increased labor costs can significantly impact restaurant operators, where labor is already one of the largest expenses. When wages rise, operators may need to adjust by reevaluating staffing models, improving operational efficiency, raising menu prices, or reducing other costs to maintain profitability.

Because of this debate and differences in economic conditions, cost of living, and political priorities, minimum wage rates vary widely across the country. Some states tie increases to inflation, while others require legislative approval or voter ballot measures to make changes.

How often does the minimum wage increase?

There’s no single schedule for minimum wage increases in the U.S. How often wages rise depends on whether you’re looking at the federal, state, or local level.

Federal minimum wage

The federal rate only changes when Congress passes legislation, and the President signs it into law. It does not automatically adjust for inflation, which is why it has remained at $7.25 per hour since 2009.

State minimum wage

State wage increases vary. Some states pass legislation that schedules gradual increases over several years. Others automatically adjust their minimum wage annually based on inflation or cost-of-living formulas. In those states, employers can expect small, incremental increases almost every year.

Local (city or county) minimum wage

In certain states, cities and counties can set their own minimum wages that exceed the state rate. These local rates often increase on a set annual schedule as well.

For restaurant operators, this means minimum wage changes can happen:

• Annually (in states with inflation indexing)

• On a scheduled multi-year phase-in plan

• Or unpredictably, if new legislation passes

Because tipped employees may have separate minimum cash wage requirements, and because tip credit rules can change, restaurants need to monitor updates at every level.

What does minimum wage mean for tipped workers?

For tipped workers, minimum wage works a little differently. Under federal law, employers can pay a lower base wage (as low as $2.13/hour) and use a “tip credit,” meaning tips make up the difference to reach at least the standard $7.25/hour minimum. If they don’t, the employer has to cover the gap. That said, many states (and even cities) require higher base wages or don’t allow a tip credit at all, so the rules can vary a lot depending on where you operate. 

Whether tips are flowing or it’s a slower shift, tipped employees must still earn at least the applicable minimum wage, no exceptions.

Minimum wage by state: Current 2026 rates by state

Minimum wage exceptions

Not every state sticks to the single, statewide rate listed above. Some use regional tiers based on cost of living. Take Oregon, for example: the standard minimum wage is $15.05 per hour, but employers in the Portland metro area must pay $16.30, while certain non-urban counties have a lower rate of $14.05. 

Some other states and cities that follow similar tiered systems include:

• New York has different rates depending on where you are in the state — for example, New York City and downstate areas have a higher minimum wage than upstate regions.

• Maryland uses tiered county-level minimum wages that vary based on employee count and locale, meaning Montgomery County has a higher floor than other parts of the state.

• California cities like Berkeley, Emeryville, and Los Altos have local minimum wages well above the statewide rate.

• Chicago and Cook County also set their own minimum wages that differ from Illinois’s statewide rate.

This shows that where your business is located (and sometimes even which side of a county line you’re on) can directly impact payroll. 

Minimum wage isn’t always one-size-fits-all, so it’s important to double-check the rate that applies to your exact location.

How to stay compliant with changing minimum wage laws

Minimum wage laws aren’t static, and when rates vary by state, city, or even county, staying compliant can quickly become complex. Operators can lean on tools like Toast Payroll, designed to keep payroll aligned with current regulations. All Toast Payroll customers can find information on minimum wage and state or local wage and hour enforcement agencies by accessing Mineral, which comes with their Toast Payroll services.

The median payroll processing time for Toast Payroll Suite customers is 15 minutes or less — and less than 5 minutes for restaurants with 10 or fewer employees.* So, you can spend less time double-checking rates and more time running your restaurant.

This article is updated annually by Toast (last updated March 2026) to reflect enacted minimum wage laws effective as of the stated year. Rates are verified prior to publication using a structured source hierarchy:

1. U.S. Department of Labor (DOL), Wage and Hour Division – Primary reference for statewide minimum wage rates: https://www.dol.gov/agencies/whd/minimum-wage/state

2. U.S. Department of Labor – Tipped Minimum Wage Rates – Used to confirm tipped wage and tip credit rules: https://www.dol.gov/agencies/whd/state/minimum-wage/tipped

3. Official state labor or workforce agency websites – Used to confirm effective dates, scheduled increases, and resolve discrepancies.

Where states have tiered wage structures (different rates by employer size, region, or scheduled phase-ins), we list the primary statewide rate and note applicable variations. In states that allow local wage ordinances, city or county rates may exceed the state minimum. In states with preemption laws, the statewide rate generally applies.

Because wage laws change frequently, readers should consult official state and local government sources to confirm current requirements.

Minimum wage by state FAQs

What is the federal minimum wage in 2026? 

The federal minimum wage remains at $7.25 per hour for non-tipped employees and $2.13 per hour for tipped employees, unchanged since 2009.

What state has the highest minimum wage in 2026?

Washington has the highest minimum wage in 2026 of $17.13 per hour. 

How many states follow the federal minimum wage?

18 states follow the federal minimum wage of $7.25 per hour in 2026, including Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, Wisconsin, and Wyoming.

Can cities set their own minimum wage?

Sometimes. In some states, cities are allowed to set a local minimum wage that’s higher than the state or federal rate. In other states, laws prevent cities from setting their own wage, requiring them to follow the state minimum instead.

Is minimum wage going up in 2027?

As of early 2026, the federal minimum wage is not increasing. However, some states are increasing their minimum wages, primarily through legislation that ties future raises to inflation or pre-set increases. Learn more here. 

How does minimum wage work for tipped employees? 

Under federal law, employers can pay tipped workers as low as $2.13 per hour using a "tip credit," where tips make up the difference to reach the standard minimum wage. If tips don't cover the gap, employers must make up the difference.

*Based on Toast internal data from 1/1/24 to 10/31/24 among restaurants using Toast Payroll. Individual results will vary.