USA Payroll Changes - 2026

1. Minimum salary/Wage changes by state

A number of U.S. states have confirmed minimum wage increases, effective January 1, 2026:

• Arizona - $15.15/hr
  • Tipped: $12.15/hr
  • Local increases apply in Flagstaff & Tucson.
• California - $16.90/hr
  • No tipped credit allowed.
  • Updates in 20+ local jurisdictions (e.g., Palo Alto, San Diego, West Hollywood).
• Colorado - $15.16/hr
  • Tipped: $12.14/hr
  • Local updates in Denver, Edgewater, Boulder, and Boulder County.
• Connecticut - $16.94/hr
  • Tipped: $8.23/hr (Bartenders) | $6.38/hr (Hotel/Restaurant waitstaff).
• Hawaii - $16.00/hr
  • Tipped: $14.75/hr
• Maine - $15.10/hr
  • Tipped: $7.55/hr
  • Local rates apply in Portland & Rockland.
• Michigan - $13.73/hr
  • Tipped: $5.49/hr
  • Tipped wage schedule revised by SB 8; increases annually toward 50% by 2031.
• Minnesota - $11.41/hr
  • No tipped credit allowed.
  • Local ordinances apply in St. Paul & Minneapolis.
• Missouri - $15.00/hr
  • Rate stays at $15.00 indefinitely.
• Montana - $10.85/hr
  • No separate tipped rate.
• Nebraska - $15.00/hr
  • Tipped: $2.13/hr (Federal level).
• New Jersey - $15.92/hr (Large employers)
  • Tipped: $6.05/hr
  • No local minimum wage; a separate rate applies to long-term care facilities.
• New York (Remainder of state) - $16.00/hr
  • Tipped: $13.30/hr (Resort/general) | $10.70/hr (Food service).
  • Excludes NYC, Nassau, Suffolk, and Westchester, which have separate rates.
• Ohio - $11.00/hr
  • Tipped: $5.50/hr
• Rhode Island - $16.00/hr
  • Tipped: $3.89/hr
• South Dakota - $11.85/hr
  • Tipped: $5.925/hr
• Vermont - $14.42/hr
  • Tipped: $7.21/hr
• Virginia - $12.77/hr
  • Tipped: $2.13/hr (Federal level).
• Washington - $17.13/hr
  • No tipped credit allowed.
  • Many local jurisdictions have higher rates (e.g., Seattle, SeaTac)

Source: ADP

2. Federal adjustments

Standard deduction:

• Married filing jointly: $32,200
• Single / Married filing separately: $16,100
• Head of Household: $24,150

Social security earnings limits:

• Taxable maximum earnings: $184,500
• Under full retirement age: $24,480 limit
  - $1 is reduced for every $2 earned above the limit
• Reaching full retirement age in 2026: $65,160 limit
  - $1 is reduced for every $3 earned above the limit until retirement month

3. Social security & benefits 

Cost-of-Living Adjustment (COLA):

• 2.8% increase for social security & SSI benefits
• Impacts ~75 million americans

Effective dates:

• Social security beneficiaries: January 2026 (~71M recipients)
• SSI recipients: December 31, 2025 (~7.5M recipients)
  Some individuals receive both.

4. Upcoming

• State income tax changes scheduled for July 2026