Montana minimum wage in 2026 (and 2027)

The two Montana rates and who pays which

Montana has a main rate and a small-business rate. The $10.85 rate applies to businesses with gross annual sales over $110,000. A business that is not covered by the federal Fair Labor Standards Act and has sales of $110,000 or less may pay $4.00 an hour.

The $4.00 rate has a catch. If an individual employee is covered by the FLSA, such as one who produces or moves goods between states, that employee must get the higher of the federal $7.25 or Montana's $10.85. In practice that means $10.85 for many workers at small businesses too.

Montana also bans three common discounts: no tip credit, no meal credit and no training wage, according to the state labor department. Servers, bartenders and new hires all start at $10.85. Overtime is due after 40 hours in a week.

How the cost-of-living adjustment works

The department measures the change in the Consumer Price Index from August of the prior year to August of the current year, and it must publish the new rate no later than September 30. The increase is rounded to the nearest five cents. If prices did not rise, the rate stays the same. That process produced the $11.20 rate for January 1, 2027, a $0.35 increase.

DOL history tables show the main rate at $8.65 in 2020, $8.75 in 2021, $9.20 in 2022, $9.95 in 2023 and $10.30 in 2024, so 2026 is $0.55 above 2024.

Annual and monthly pay at Montana rates

• 2026: 2,080 x $10.85 = $22,568.00 a year, or $1,880.67 a month and $434.00 a week
• 2027: 2,080 x $11.20 = $23,296.00 a year, $728.00 more per full-time worker
• Overtime in 2026: $10.85 x 1.5 = $16.275 an hour
• Small non-FLSA business rate: 2,080 x $4.00 = $8,320.00 a year

Employer taxes on a Montana minimum wage job

Montana's 2026 unemployment wage base is $47,300, high enough that every dollar of a minimum wage salary is taxable. New employers pay by industry: 1.00% for most industries, 1.10% for services, 1.30% for agriculture and mining, and 2.00% when unclassified, plus a 0.18% Administrative Fund Tax.

Workers compensation is extra; see what workers comp costs. Use the employee cost calculator for other wages.

Getting Montana payroll ready for 2027

Update rates for the first pay period that includes January 1, 2027, and check that tipped staff are not set to a tip credit. Registration and new hire reporting are covered on our Montana payroll tax page. A small crew on Gusto Simple pays $49 a month plus $6 for each person (October 16, 2026 listing); our payroll software rankings show the other options. Regional comparison: Idaho, Wyoming and North Dakota all sit at the federal $7.25 for covered employers.