Arizona Minimum Wage: Rate, Tipped Wage, and Local Rules

Arizona sets its own minimum wage, and it is far higher than the federal floor. As of 2025 the Arizona minimum wage is $14.70 per hour, compared with the federal minimum of just $7.25 under the Fair Labor Standards Act (FLSA). Arizona's rate is not fixed: under state law it is recalculated every year for inflation, and the Industrial Commission of Arizona (ICA) announces the new figure by October 1 to take effect the following January 1. Because the number changes annually, you should confirm the rate in force right now with the ICA before relying on it. The rest of this article explains how the rate is set, the special rules for tipped workers, the higher local minimums in Flagstaff and Tucson, and how to file a claim if you are underpaid.

Arizona's minimum wage and how it compares to federal

When a state minimum wage is higher than the federal minimum, employers must pay the higher state rate. That is the situation in Arizona. The federal FLSA minimum of $7.25 has not changed since 2009, but Arizona voters approved a state minimum wage that is now more than double that amount. As of 2025 the statewide rate is $14.70 per hour. The ICA typically publishes the next year's adjusted rate in the fall, so the 2026 figure will be slightly higher than the 2025 number; verify the exact current amount with the ICA rather than assuming.

Arizona's annual increase comes from a cost-of-living adjustment written into state law. The minimum wage is indexed to inflation using the Consumer Price Index, so it generally goes up a little each January. This indexing traces back to ballot measures Arizona voters passed (the 2006 Raise the Minimum Wage for Working Arizonans Act and the 2016 Fair Wages and Healthy Families Act, sometimes called Proposition 206), now codified in the Arizona Revised Statutes. The practical takeaway is that Arizona does not wait for the legislature to raise pay; the rate moves automatically with the cost of living.

The tipped (cash) wage and the tip credit

Arizona allows a tip credit, but a much smaller one than federal law. Under Arizona law, an employer may pay a tipped employee up to $3.00 per hour less than the regular minimum wage, provided the worker's tips make up the difference. With a 2025 state minimum of $14.70, that means the lowest cash wage for tipped employees is $11.70 per hour ($14.70 minus $3.00). When the state minimum rises, the tipped cash wage rises with it, because the $3.00 maximum credit stays the same while the base goes up.

This is far more generous to workers than the federal scheme. Under the FLSA, the federal tipped cash wage is only $2.13 per hour, reflecting a federal tip credit of up to $5.12. Arizona caps the credit at $3.00, so tipped workers in Arizona keep a higher guaranteed cash wage.

The tip credit only works if the employee actually earns enough in tips. The employer must be able to show that the employee's cash wage plus tips equals or exceeds the full Arizona minimum wage for the hours worked. If tips fall short in a given pay period, the employer has to make up the difference so the worker still reaches at least the full minimum. A "tipped employee" generally means someone who customarily and regularly receives tips, such as a server or bartender; it does not let an employer apply the credit to back-of-house or non-tipped roles.

Scheduled increases and inflation indexing

There is no single future date when Arizona's minimum wage jumps to a set target. Instead, the rate is adjusted every year for inflation. State law directs the Industrial Commission of Arizona to recalculate the minimum wage based on the increase in the cost of living and to publish the new amount by October 1 each year, effective the following January 1. In a year with higher inflation, the increase is larger; in a low-inflation year, it is smaller. Because the adjustment is automatic, the safest practice is to check the ICA's published rate each January.

Local minimum wages: Flagstaff and Tucson

Arizona is one of the states where cities can set a minimum wage above the statewide floor, and two have done so.

• Flagstaff has the highest minimum wage in Arizona. Under the Flagstaff Minimum Wage Act, the city's rate is set above the state minimum and also indexed for inflation. As of 2025 it is in the range of about $17.85 per hour, with a correspondingly higher tipped cash wage. Confirm the current Flagstaff figure with the City of Flagstaff, because it adjusts annually and on its own schedule.
• Tucson adopted its own minimum wage when voters passed Proposition 206 in 2021. Tucson's rate phased up to $15.00 per hour on January 1, 2025, and is indexed for inflation thereafter. Tucson's tipped-wage rules and annual adjustments are set by the city, so verify the current amount with the City of Tucson.

If you work in Flagstaff or Tucson, you are entitled to that city's higher rate for the hours you work there. Everywhere else in Arizona, the statewide minimum applies.

Who is covered, and the main exceptions

Arizona's minimum wage law covers most employees who work in the state, and it is broader than federal coverage in some respects. There are limited exceptions. Notable ones include:

• People employed by a parent or sibling.
• Casual babysitters employed in or about a home on a casual basis.
• Certain individuals employed by the state or federal government, and small businesses that fall below the dollar threshold for coverage under the law.

These categories are narrow, and most private-sector hourly workers in Arizona are covered. Overtime is a separate issue: Arizona does not have its own overtime statute, so overtime is governed by the federal FLSA, which generally requires one and one-half times the regular rate for hours worked over 40 in a workweek for non-exempt employees.

How to enforce your right to the minimum wage

If you are paid less than the Arizona minimum wage (or less than the proper tipped cash wage), you have enforcement options. Arizona law protects against retaliation, so an employer may not fire or punish you for asserting your wage rights or filing a complaint.

• File with the Industrial Commission of Arizona. The ICA's Labor Department administers and enforces the state minimum wage. You can submit a wage claim describing the hours you worked and what you were paid.
• Keep records. Save pay stubs, schedules, time records, and any tip records. Arizona requires employers to keep payroll records, and your own documentation strengthens a claim.
• Consider a private lawsuit. Arizona's minimum wage law allows employees to recover unpaid wages, and the statute provides for additional damages on top of the wages owed, plus attorney fees in successful cases. An employment lawyer can advise on the deadline (statute of limitations) and the best path.

Where to confirm the current rate

Because Arizona's minimum wage changes every year, always verify the number before relying on it. The authoritative source is the Industrial Commission of Arizona (ICA), Labor Department, which publishes the official statewide minimum wage and tipped-wage figures each year and provides the minimum-wage poster employers must display. For city rates, check directly with the City of Flagstaff and the City of Tucson. For the federal comparison, the U.S. Department of Labor's Wage and Hour Division publishes the FLSA $7.25 figure and federal overtime rules.

Official Arizona Sources

This page is based on Arizona employment law. Rules and figures change — verify the current details directly with the official Arizona sources below. This is general legal information, not legal advice.

• Industrial Commission of Arizona (Labor Department) — official Arizona agency.
• Labor Claims for Unpaid Wages
• Arizona Revised Statutes, Title 23 - Labor

Federal law and local ordinances may also apply. Federal laws like the Fair Labor Standards Act set a national floor, and your city or county may add protections (such as a higher local minimum wage or paid sick leave). Check both alongside Arizona state law.