Montana sets its own minimum wage that is higher than the federal floor of $7.25 per hour, and it adjusts that wage every year for inflation. As of 2026, Montana's standard minimum wage sits just above $10 per hour (it was $10.55 for calendar year 2025), with the new figure taking effect each January 1. Just as important: Montana does not allow a tip credit. Servers, bartenders, and other tipped employees must be paid the full state minimum wage in cash before tips, not a reduced "tipped" cash wage. Because the exact dollar figure changes annually, confirm the current rate with the Montana Department of Labor and Industry before relying on a specific number.
Montana's minimum wage versus the federal rate
The federal Fair Labor Standards Act (FLSA) sets a national minimum wage of $7.25 per hour, a number that has not moved since 2009. When a state minimum wage is higher than the federal rate, employers must pay the higher state rate. Montana's voters built an automatic escalator into state law through Initiative 151, approved in 2006, which raised the state minimum wage and then tied future increases to the cost of living.
Each September, the state calculates the change in the federal Consumer Price Index (CPI) over the prior 12 months and applies that percentage to the current minimum wage, rounding to the nearest five cents. The adjusted rate is announced in the fall and becomes effective on January 1 of the following year. This means Montana's minimum wage generally rises a little each year rather than staying frozen, and it has remained well above $7.25 for more than a decade. For reference, the rate was $10.30 in 2024 and $10.55 in 2025; the 2026 figure follows the same inflation formula.
Because the number changes annually and is set by a published formula rather than by a fixed statute amount, you should always verify the figure that applies to the year you are working in. Do not assume last year's poster is still correct.
The tipped wage: Montana has no tip credit
This is where Montana differs sharply from many other states and from federal law. Under the FLSA, an employer can take a "tip credit" and pay tipped employees a cash wage as low as $2.13 per hour, counting the worker's tips toward the difference up to the federal minimum. Montana rejects that system. State law requires that tipped employees receive the full Montana minimum wage in direct wages, and tips are extra money the employee keeps on top of that wage.
In practical terms, if you wait tables or tend bar in Montana, your paycheck (before tips) must reflect at least the full state minimum hourly rate for every hour worked. An employer cannot lower your base pay because you earn tips, and an employer cannot count your tips toward meeting the minimum wage. Montana is one of a small group of states that pays one full minimum wage to tipped and non-tipped workers alike.
Employers may still maintain valid tip-pooling arrangements among employees who customarily receive tips, but the pool cannot be used to push any worker's effective wage below the full state minimum, and managers and supervisors generally may not share in employee tips.
The small-business and FLSA-exempt rate
Montana law contains a narrow lower rate that surprises many people. A business that is not covered by the FLSA and that has gross annual sales of $110,000 or less may pay a minimum wage of $4.00 per hour under state law. This provision exists in the Montana statutes and is real, but it is much narrower than it first appears.
The catch is federal coverage. Even if a small Montana business is not covered by the FLSA as an enterprise, an individual employee can still be "individually covered" by federal law if their work regularly involves interstate commerce, such as handling out-of-state goods, processing credit-card transactions, or making interstate phone calls and shipments. When federal coverage applies to the employee, the federal $7.25 minimum wage controls and overrides the $4.00 state figure. Many small businesses that assume they qualify for the $4.00 rate actually owe at least $7.25, and frequently the full Montana minimum, once individual FLSA coverage is considered. Employers should not rely on the $4.00 rate without confirming that neither enterprise nor individual FLSA coverage applies.
Overtime in Montana
Montana follows the standard federal overtime structure. Non-exempt employees must receive one and one-half times their regular rate of pay for hours worked over 40 in a workweek. Montana does not impose daily overtime (there is no requirement to pay extra simply for working more than eight hours in a single day, unlike a few other states). Overtime is calculated on the actual regular rate, which can be higher than the minimum wage, and tips do not reduce the overtime base for a tipped worker who is already paid full minimum wage.