Minnesota Minimum Wage After Tax 2026

Minnesota Minimum Wage After Tax in 2026

A full-time Minnesota worker at $11.41 an hour grosses $23,733 a year. After $763 in federal income tax, $1,816 in FICA and $451 in state income tax, take-home pay is about $20,703 a year, or $1,725 a month and $398 a week.

Minnesota large employers pay $11.41/hr in 2026 (small employers: $10.85/hr). MN is one of few states with NO tip credit -- tipped workers get full minimum wage. Calculate your take-home pay below.

Minnesota Minimum Wage 2026: The Two-Tier System and the No-Tip-Credit Rule

Minnesota's minimum wage structure is one of the most worker-protective in the United States, combining a relatively high rate for large employers with an absolute prohibition on tip credits. Understanding both components is essential for anyone working or hiring in Minnesota in 2026.

The Two-Tier System: Large vs. Small Employers

Minnesota divides its minimum wage into two tiers based on employer gross annual revenue:

Both rates are adjusted annually for CPI changes, announced each year by the Minnesota Department of Labor and Industry. The $500,000 revenue threshold is based on the employer's gross annual revenue -- not profit, not employee count, but total revenue. A business with 5 employees but $600,000 in annual sales must pay the large employer rate. A business with 50 employees but $400,000 in annual revenue (uncommon but possible in service industries) would pay the small employer rate.

What "Gross Revenue" Means in Practice

The $500,000 threshold catches most Minnesota businesses of any meaningful size. A restaurant averaging $10,000 per week in sales hits $520,000 annually and falls under the large employer rate. A retailer averaging $10,500 per week crosses the threshold. Most workers who are employed at a standard commercial enterprise -- restaurant, retail store, hotel, warehouse, healthcare facility -- will be covered by the large employer rate of $11.41 per hour. The small employer rate primarily affects very small operations like a neighborhood cleaning service, a small family-owned farm retail stand, or a solo contractor with a single part-time employee.

Minneapolis City Minimum Wage: Mirroring the Large Employer Rate

Minneapolis has its own city minimum wage ordinance, and as of 2026 it applies at $11.41 per hour for large employers -- effectively matching the state large employer rate. The city ordinance has its own enforcement mechanisms through the Minneapolis Department of Civil Rights, separate from state enforcement. Workers in Minneapolis can file complaints with either the city or the state if they believe their employer has violated minimum wage law.

The No-Tip-Credit Rule: What Makes Minnesota Different

Minnesota is one of only a handful of states -- including Oregon, Alaska, California, and Montana -- that require employers to pay tipped workers the full minimum wage with no tip credit. In most states, employers can pay servers, bartenders, and other tipped workers a lower "tipped minimum wage" (as low as $2.13 per hour federally), relying on tips to make up the difference to the standard minimum wage.

In Minnesota, this is prohibited. A large employer must pay every tipped worker $11.41 per hour directly, regardless of tips received. Tips are entirely additional income for the worker -- they cannot be used to subsidize the employer's wage obligation. This has significant implications for the restaurant and hospitality industry in Minnesota, where payroll costs are higher than in comparable neighboring states like Wisconsin or Iowa where tip credits are allowed.

For workers, this is a substantial protection. A Minnesota server who has a slow night with minimal tips still takes home at least $11.41 per hour plus whatever tips were earned. In states with tip credits, a server who has a bad tip night may effectively earn only slightly above the federal minimum wage for the hours worked.

Twin Cities vs. Outstate Minnesota

The Minneapolis-Saint Paul metro area has a cost of living significantly higher than outstate Minnesota. Housing costs in the metro have risen sharply, with average one-bedroom apartments in popular neighborhoods like Uptown, Northeast Minneapolis, or the Cathedral Hill area of Saint Paul running $1,400 to $1,800 per month. A full-time large employer minimum wage worker earning approximately $27,500 after taxes faces significant housing cost pressure in these neighborhoods.

By contrast, cities like Duluth, Rochester, Mankato, and St. Cloud have more moderate housing costs, and rural Minnesota communities are often much more affordable. The same take-home pay that barely covers rent in Minneapolis can provide a more stable financial footing in outstate communities -- though employment opportunities and wages above the minimum also differ substantially between regions.

Minnesota State Income Tax

Minnesota has four income tax brackets. At the $32,386 gross income of a full-time large employer minimum wage worker, after Minnesota's standard deduction, most single filers fall in the 9.85% bracket -- the lowest rate. Minnesota's state income tax is moderate at this income level, and the state's robust social services, including a strong earned income credit and child care assistance programs, partially offset the tax burden for lower-income workers.

Frequently Asked Questions