South Dakota minimum wage in 2026 (and 2027)

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South Dakota's minimum wage is $11.85 an hour from January 1, 2026, as published by the Department of Labor and Regulation. It rises to $12.30 on January 1, 2027, with the tipped cash wage going to $6.15. A full-time employee at $11.85 costs a first-year employer $26,838.07 a year once federal taxes and South Dakota's 1.75% unemployment rate are added.

2026 minimum wage
$11.85an hour
Tipped cash wage
$5.925an hour
2027
$12.30as of October 2026
Federal floor
$7.25an hour
On this page

A rate that rises again in January

The $11.85 rate took effect January 1, 2026, and the Department of Labor and Regulation has already published $12.30 for January 1, 2027. Today's rate is $4.60 above the federal $7.25; next year's will be $5.05 above it.

Tipped employees get half the minimum in cash: $5.925 an hour on the state's own page (the DOL table rounds it to $5.93). Tips have to carry them the rest of the way to $11.85. In 2027 the split becomes $6.15 cash out of $12.30.

Overtime follows federal rules, 1.5 times pay after 40 hours, which is $17.775 an hour at $11.85.

Paychecks at $11.85 and $12.30

South Dakota minimum wage pay, full time (40 hours a week, 2,080 a year)
Period2026 at $11.852027 at $12.30
Week$474.00$492.00
Month (year / 12)$2,054.00$2,132.00
Year$24,648.00$25,584.00

Source: South Dakota Department of Labor and Regulation minimum wage page, checked Oct 2026. Arithmetic ours.

The 2027 raise adds $936 a year per full-time worker ($25,584 minus $24,648). Budget for it now if you set prices or bids for next year. South Dakota has no state income tax, so the only withholding is federal.

Your cost on top of wages

Employer cost of one full-time South Dakota employee at $11.85 (2026, first-year employer)
ItemAnnual cost
Wages$24,648.00
Social Security and Medicare (7.65%)$1,885.57
FUTA (0.6% x first $7,000)$42.00
Reemployment assistance tax and investment fee (1.75% x $15,000)$262.50
Total$26,838.07

Sources: IRS Pub 15 (2026), DOL, SD Department of Labor and Regulation Reemployment Assistance Division, checked Oct 2026.

New employers pay 1.20% reemployment assistance tax plus a 0.55% investment fee in year 1, on the first $15,000 of wages. In years 2 and 3 a positive balance drops the tax to 1.00% plus the same fee. South Dakota is unusual on workers' compensation: the state says no law requires any employer to carry it, though it recommends coverage and an uninsured employer can be sued. Compare rates in the 2026 SUTA table.

How the neighbors compare

North Dakota stays at $7.25, so a Sioux Falls or Aberdeen employer pays $4.60 an hour more than one across the northern line. Nebraska is at $15.00 for employers of 4 or more, Minnesota at $11.41, and Iowa at the federal $7.25. See all states on the minimum wage by state page.

Running South Dakota payroll

State law requires paydays at least once a calendar month, set in advance. Final pay is due by the next regular payday, or once the employee returns your property. Registration with the Department of Labor and Regulation is covered on the South Dakota employer tax page.

Make sure your provider loads the January 1, 2027 rate. On Gusto, the Simple tier is $49 monthly with $6 added per employee (checked October 16, 2026); our payroll software picks list the rest.

Frequently asked questions

What is the South Dakota minimum wage in 2026?
$11.85 an hour, effective January 1, 2026, according to the South Dakota Department of Labor and Regulation.
What is the South Dakota minimum wage in 2027?
$12.30 an hour from January 1, 2027, with a tipped cash wage of $6.15, per the South Dakota Department of Labor and Regulation.
What is the tipped minimum wage in South Dakota?
$5.925 an hour in 2026, half the state minimum wage, as listed by the Department of Labor and Regulation. Tips must bring the employee to at least $11.85.
How much is $11.85 an hour per year?
$24,648 a year for a full-time schedule of 2,080 hours, or $2,054 a month, before taxes.
When does the South Dakota minimum wage change next?
On January 1, 2027, when it rises from $11.85 to $12.30 an hour and the tipped cash wage rises from $5.925 to $6.15, according to the South Dakota Department of Labor and Regulation.
Sources (5)
  1. U.S. Department of Labor: State minimum wage laws (updated July 1, 2026) (checked Oct 18, 2026)
  2. U.S. Department of Labor: Minimum wages for tipped employees (checked Oct 16, 2026)
  3. SD Department of Labor and Regulation: Minimum wage (checked Oct 16, 2026)
  4. SD Department of Labor and Regulation: Reemployment assistance for businesses (checked Oct 16, 2026)
  5. Gusto: Gusto pricing (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.