Arkansas minimum wage in 2026 (and 2027)

The 4-employee line

The state act only covers employers with 4 or more employees, the Arkansas Division of Labor says. That splits small businesses into two groups:

• 4 or more employees: pay at least $11.00. If you are also covered by the federal FLSA, you pay the higher of the two, which is the state's $11.00.
• Fewer than 4 employees: outside the state act. If the federal FLSA covers you (for example, $500,000 or more in annual sales, or workers who regularly handle interstate business), the federal $7.25 still applies. See federal minimum wage rules for the coverage test.

The count matters the day you hire your fourth person. Payroll should switch every hourly worker to $11.00 from that pay period.

Tipped employees and overtime in Arkansas

Arkansas sets a tipped cash wage of $2.63 an hour, slightly above the federal $2.13. Tips must bring the worker up to $11.00 for every hour, and if they do not, the employer pays the difference, the Division of Labor says. With an $11.00 minimum, that means a tip credit of up to $8.37 an hour.

Overtime is 1.5 times the regular rate after 40 hours in a workweek, the same threshold as federal law.

What $11.00 an hour comes to

• Weekly: 40 x $11.00 = $440.00
• Annually: 2,080 x $11.00 = $22,880.00
• Monthly: $22,880.00 / 12 = $1,906.67

Arkansas sits between its neighbors. Texas and Tennessee pay the federal $7.25, while Missouri's minimum wage is $15.00 in 2026 for most employers. A business with sites on both sides of the Missouri line or in Texarkana needs to pay each site's state rate.

Employer taxes on an $11.00 worker

On $22,880.00 a year, a new Arkansas employer owes:

• FICA, employer half, 7.65%: $1,750.32
• FUTA, 0.6% on $7,000: $42.00
• Arkansas unemployment, new employer rate 2.0% on the $7,000 wage base: $140.00

Total $1,932.32. Arkansas also lists a 0.200% stabilization rate; its page does not say whether that is part of the 2.0% new employer rate, so it may add $14.00 per employee. There is no state paid leave or disability payroll program. Arkansas's $7,000 unemployment wage base is among the lowest in the country; compare it in SUTA rates by state for 2026 and see registration steps on Arkansas payroll taxes.

Paying Arkansas staff on time and at the right rate

For Arkansas employers the checklist is short: the right rate once you pass 3 employees, tip shortfall top-ups, weekly overtime and the quarterly unemployment report. A payroll service handles all four. Gusto's entry plan is listed at $49 a month plus $6 per person (checked October 16, 2026). Look at the payroll software we rank highest and use the cost calculator to price a hire.