2026 State Minimum Wage & Payroll Tax Quick Reference for Small Business
A single reference table covering 2026 minimum wage, state income tax withholding, SUI new-employer rates, and payroll quirks for the 15 states where most small businesses operate.
Quick verdict
For a single-state small business, checking the relevant state DOL and revenue agency once a year is manageable by hand. Once a company has employees working from three or more states, the annual multiplication of minimum wage updates, withholding tables, and SUI wage bases is where manual tracking starts producing missed deadlines and wrong withholding, and payroll software with built-in multi-state compliance tends to pay for itself in avoided penalties rather than convenience alone.
Why one table beats fifteen state DOL bookmarks
Every state sets its own minimum wage, its own state income tax withholding rules, and its own unemployment insurance (SUI) wage base and rate. None of the three follow the same calendar or the same formula, so keeping track of even a handful of states usually means checking a handful of separate government sites, several of which update rates mid-year rather than on January 1.
This table covers the 15 states with the largest concentration of small businesses and the highest search volume for payroll compliance questions: California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Georgia, North Carolina, Michigan, New Jersey, Virginia, Washington, Massachusetts, and Arizona. Figures reflect rates in effect or scheduled as of January 2026, drawn from each state's labor department, revenue agency, or a compliance source citing those primary sources. Rates change every year, and sometimes more than once a year, so treat this as a starting point for a specific payroll run rather than a substitute for checking the state agency directly before filing.
2026 state payroll quick reference
| State | 2026 min wage | State income tax? | SUI new-employer rate / wage base | Notable quirk |
|---|---|---|---|---|
| California | $16.90/hr state floor; 20+ cities set higher local minimums (West Hollywood, Palo Alto and San Francisco all exceed $18) | Yes | 3.4% new-employer rate on a $7,000 wage base | Supplemental wages such as bonuses and stock comp withhold at a flat 10.23% state rate regardless of the employee's W-4, per the California EDD Employer's Guide (DE 44) |
| Texas | $7.25/hr (no state minimum wage law, so the federal floor applies) | No | 2.7% or your industry average, whichever is greater, on a $9,000 wage base | No withholding tables to maintain, but Texas Workforce Commission SUI registration is still mandatory for any employee working in the state |
| New York | $17.00/hr in NYC, Long Island and Westchester; $16.00/hr for the rest of the state | Yes, plus NYC and Yonkers local withholding | 4.1% new-employer rate on a $13,000 wage base | The Wage Theft Prevention Act requires a written pay-rate notice at hire, in the employee's primary language, separate from federal I-9/W-4 paperwork |
| Florida | $14.00/hr through September 29, 2026, then $15.00/hr starting September 30, 2026 | No | 2.7% on a $7,000 wage base | The minimum wage step-up lands on September 30, not January 1, which is easy to miss if a payroll calendar only gets reviewed at year-end |
| Illinois | $15.00/hr statewide; Chicago moves to $17.05/hr and Cook County to $15.40/hr, both on July 1, 2026 | Yes, flat 4.95% | 3.35% for most employers (3.45% for certain industries) on a $14,250 wage base | Chicago and Cook County reset their local minimums every July 1, a different date than the state's January 1 change, so employers with Chicago-area staff see two separate rate updates in the same year |
| Pennsylvania | $7.25/hr (no state minimum wage law, unchanged since 2009) | Yes, flat 3.07% state rate | 3.822% on a $10,000 wage base | Hundreds of Pennsylvania municipalities and school districts layer a local Earned Income Tax on top of the state rate, and employers must withhold and remit it through the correct local Tax Collection District found via each address's PSD code |
| Ohio | $11.00/hr for employers with more than $394,000 in annual gross receipts; smaller employers may pay the federal $7.25 | Yes | 2.85% on a $9,000 wage base | Ohio runs a two-tier minimum wage based on employer revenue, so a small business under the receipts threshold is not automatically bound to the higher state rate |
| Georgia | $7.25/hr in practice (federal floor governs for FLSA-covered employers, which is nearly all of them) | Yes, flat 5.39% | 2.7% on a $9,500 wage base | Georgia's own statutory minimum wage is only $5.15/hr, but it is preempted by the higher federal rate for any employer covered by the Fair Labor Standards Act |
| North Carolina | $7.25/hr (no state minimum above the federal floor) | Yes, flat 3.99%, down from 4.25% in 2025 | 1.0% new-employer rate on a $34,200 wage base | North Carolina's flat income tax rate has dropped every year since 2022 under a legislated phasedown, so a rate hardcoded from a prior year will be wrong |
| Michigan | $13.73/hr | Yes, flat rate, 4.25% for 2026 | 2.7% on a $9,500 wage base | Michigan's flat income tax rate is subject to a statutory revenue trigger that has changed it from year to year, so it should be reverified each January rather than assumed static |
| New Jersey | $15.92/hr for most employers; $15.23/hr for seasonal and small employers with fewer than 6 employees; $14.20/hr for agricultural workers | Yes, progressive up to 10.75% | 2.8% employer / 0.425% employee on a $44,800 wage base | New Jersey employers also fund state Temporary Disability Insurance and Family Leave Insurance alongside SUI, so payroll carries three state payroll-tax line items instead of one |
| Virginia | $12.77/hr, on a statutory path to $13.75/hr on January 1, 2027 and $15.00/hr on January 1, 2028 | Yes | 2.5% on an $8,000 wage base | Virginia's minimum wage is legislated to keep climbing through 2028, so budget for another scheduled increase next January rather than treating the current rate as settled |
| Washington | $17.13/hr, the highest state floor in the country; Seattle and Tukwila set even higher local minimums | No | New-employer rate = 115% of the average rate for the employer's industry (1.00% statutory floor), plus a shared social cost factor; combined new-employer rates run roughly 1.7%-6% depending on industry classification (construction tends toward the higher end), on a $78,200 wage base | The WA Cares Fund adds a separate 0.58% payroll deduction on all wages with no cap, funding long-term care benefits; employers collect and remit it even though it is employee-funded |
| Massachusetts | $15.00/hr, unchanged since January 1, 2023 | Yes, plus a 4% surtax on income over $1 million | 2.13% on a $15,000 wage base | The Massachusetts Wage Act imposes mandatory treble damages for late or missed wage payments with no employer discretion, among the strictest wage-payment penalties in the country |
| Arizona | $15.15/hr statewide; Flagstaff and Tucson maintain higher local minimums | Yes, flat 2.5% | 2.0% on an $8,000 wage base | Arizona preempts most local minimum wage ordinances passed after its statewide law, but Flagstaff and Tucson had ordinances that predate the preemption and remain in force |
Wage base and rate figures for a specific employer can differ from the new-employer defaults above once a business has enough claims history to earn its own experience rating, which usually takes a few years. New-employer rates are what a business should expect to pay in its first year or two of operating in a given state.
Multi-state remote teams: SUI follows the employee, not the HQ
A common misconception is that unemployment insurance is paid to the state where a company is headquartered. It is not. SUI is generally owed to the state where the employee actually performs the work, which means a company with remote employees in five states needs five separate SUI registrations, five wage bases to track, and five sets of quarterly filings, regardless of where the company itself is incorporated or based.
The same logic mostly holds for state income tax withholding: withholding is typically based on where the work is physically performed (with some reciprocity agreements between neighboring states that can shift this for commuters). A company that hires its first out-of-state remote employee in, say, Arizona while being headquartered in California now owes Arizona SUI registration and Arizona withholding setup, on top of its existing California obligations, even if that employee never sets foot in Arizona's home office because there isn't one.
This is the single biggest reason multi-state hiring trips up small businesses that have only ever run payroll in one state. The fix is either a payroll platform that automates state registration and multi-state tax mapping, or a manual process that checks new-hire work location against this kind of state-by-state reference before the first paycheck goes out, not after.
The no-income-tax states: what actually changes for payroll
Nine states currently levy no state income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Of the 15 states covered above, that group includes Texas, Florida, and Washington.
Operating payroll in a no-income-tax state removes one recurring task (state withholding tables and remittance) but does not remove state payroll obligations generally. SUI registration, wage base tracking, and new-hire reporting are still required in every one of these states. Washington in particular has more payroll complexity than its "no income tax" label suggests, between its unusually high SUI wage base and the separate WA Cares long-term care payroll tax described in the table above.
New Hampshire is a partial exception worth flagging even though it is not one of the 15 states in this table: it taxed interest and dividend income until that tax was phased out, but it has never taxed wages, so payroll withholding there has effectively always worked like the other no-income-tax states.
FAQ: state minimum wage and payroll tax basics
Does the federal minimum wage of $7.25 still apply anywhere in 2026? Yes. States without their own minimum wage law, or with a state minimum below $7.25, default to the federal Fair Labor Standards Act rate for employers covered by the FLSA, which is nearly all employers engaged in interstate commerce. Texas, Pennsylvania, Georgia (in practice), and North Carolina all effectively sit at $7.25/hr in 2026.
Do I owe SUI in a state if I only have one remote employee there? Generally yes. Most states require SUI registration once a business has even a single employee performing work within the state, there is usually no minimum headcount threshold. Check the specific state's Department of Labor for any narrow exceptions before assuming otherwise.
Why does my SUI rate differ from the new-employer rate shown here? New-employer rates are a default assigned to businesses with no unemployment claims history in that state. After a few years, most states switch a business to an "experience rating," which can be lower or higher than the new-employer rate depending on how many former employees have filed unemployment claims.
How often should this kind of table be checked against source data? At minimum once a year, since nearly every state adjusts its minimum wage, income tax brackets, or SUI wage base annually, sometimes as index-linked automatic increases and sometimes as new legislation, and rechecking after any mid-year change is announced in states like Illinois or Florida that update on a date other than January 1.