Michigan minimum wage in 2026 (and 2027)
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Michigan's minimum wage is $13.73 an hour in 2026 for employers with two or more employees (U.S. Department of Labor state table, checked October 18, 2026). It rises to $15.00 on January 1, 2027, then adjusts each year by formula.
Working 2,080 hours at $13.73 pays $28,558.40 a year, and a new Michigan business adds $2,469.72 in employer taxes. Next year's $15.00 rate lifts wages alone to $31,200.
- 2026 minimum wage
- $13.73an hour
- Tipped cash wage
- $5.49an hour
- 2027
- $15.00as of October 2026
- Federal floor
- $7.25an hour
On this page
A rate in the middle of a climb
Michigan's pay floor is climbing: $13.73 in 2026 and $15.00 from January 1, 2027. After that, the state adjusts the rate each year using a formula in the law. A $1.27 jump in one January is large enough that any employer with staff near the minimum should budget for it now: for one full-time worker, it adds $2,641.60 in yearly wages ($1.27 x 2,080).
The rate applies to employers with two or more employees. The tipped cash wage is $5.49 an hour in 2026 and rises every year until it reaches 50% of the minimum wage in 2031, so the tip credit shrinks each January too.
Pay at $13.73 and $15.00
Yearly figures below use 2,080 hours:
- 2026 at $13.73: $549.20 a week, $2,379.87 a month, $28,558.40 a year.
- 2027 at $15.00: $600.00 a week, $2,600.00 a month, $31,200.00 a year.
Federal FLSA overtime applies past 40 hours in a workweek at time and a half: $20.60 an hour now ($13.73 x 1.5 = $20.595) and $22.50 once the 2027 rate starts.
Employer taxes on a Michigan minimum wage worker
| Item | 2026 at $13.73 | 2027 at $15.00 |
|---|---|---|
| Gross wages | $28,558.40 | $31,200.00 |
| FICA (7.65%) | $2,184.72 | $2,386.80 |
| FUTA (0.6% of $7,000) | $42.00 | $42.00 |
| Michigan UI (2.7% of $9,000) | $243.00 | $243.00 |
| Employer taxes on top of wages | $2,469.72 | $2,671.80 |
| All-in cost for the year | $31,028.12 | $33,871.80 |
Sources: Michigan Unemployment Insurance Agency (2.7% new-employer rate, $9,000 wage base, $9,500 for delinquent employers), federal FICA and FUTA rates. The 2027 column assumes 2026 tax rates carry over. Checked Oct 16, 2026.
The unemployment wage base jumps to $9,500 if you fall behind on UI payments, which adds $13.50 per worker at the 2.7% rate. Several Michigan cities, including Detroit, levy their own income tax that you withhold by work location; see Michigan city income taxes. Registration steps are in the Michigan payroll tax guide.
Workers comp is the other cost to price. Michigan requires it once you have three or more employees at one time, counting part-time staff, or one employee who has worked 35 or more hours a week for 13 weeks or longer in the past 52 weeks. Michigan has no monopoly state fund, so coverage comes from private insurers. Get quotes.
Preparing payroll for the 2027 increase
Two numbers change on January 1, 2027: the $15.00 minimum and the higher tipped cash wage. Payroll software that holds future-dated rate changes saves a scramble in the first week of January. Gusto's entry plan, Simple, is priced at $49 a month and $6 a head (checked October 16, 2026). Measure it against rivals in our payroll software rankings and run the 2027 numbers in the employee cost calculator.
Neighboring rates: Ohio is $11.00 for larger employers, Illinois is $15.00, and Wisconsin is $7.25.
Frequently asked questions
What is the Michigan minimum wage in 2026?
What will the Michigan minimum wage be in 2027?
What is the tipped minimum wage in Michigan?
How much more will a Michigan minimum wage worker cost in 2027?
Sources (5)
- U.S. Department of Labor, Wage and Hour Division: State minimum wage laws (checked Oct 18, 2026)
- U.S. Department of Labor, Wage and Hour Division: Minimum wages for tipped employees (checked Oct 16, 2026)
- Michigan LEO, Unemployment Insurance Agency: Taxable wage base (checked Oct 16, 2026)
- IRS: Instructions for Form 940 (FUTA) (checked Oct 16, 2026)
- Gusto: Gusto pricing page (checked Oct 16, 2026)
This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.