Montana Minimum Wage: Rates and Rules for Employers
Montana pays $10.85 an hour with no tip credit and no training wage. Here is the indexing schedule, every exemption, and what to do when the rate rises.
Montana Minimum Wage
One statewide rate, no tip credit, no training wage, and an automatic January inflation adjustment the state sets every September
The first call I ever took from a Montana restaurant owner started with a question I had to answer twice before she believed me. She had opened a second location in Bozeman, her payroll system was already set up from her store in another state, and she wanted to know how to enter the tipped wage.
The answer is that there is no tipped wage in Montana. Servers get the full rate in cash, and the tips are theirs.
Montana is unusual in a way that makes payroll simpler once you know it and expensive if you do not. No tip credit. No training wage. No meal credit. No city rate anywhere in the state. What Montana does have is an index that nudges the number up almost every January without anyone voting on it, which is the quiet kind of change that slips past a small employer.
This page gives you the current rate, the adjustment schedule, the exemptions that genuinely exist, and a checklist for the January change, all sourced from the Department of Labor and Industry and the state code.
The Current Rate
The Montana minimum wage is $10.85 per hour, effective January 1, 2026. It replaced $10.55, which applied through all of 2025, and the increase was announced in a determination letter dated September 23, 2025.
The rate is set by MCA 39-3-409, which says the minimum wage must be the greater of the federal rate under the Fair Labor Standards Act or the state figure indexed to inflation. The current number is published on the Department of Labor and Industry minimum wage page, which is the page to check before you set a new hire's pay.
One structural point matters more in Montana than in most states. The statute strips out the two federal devices that let employers pay below the headline rate. When it compares the state figure to the federal rate, it excludes the value of tips received by the employee and the special provisions for a training wage. That single clause is why the tip and youth pay sections below are so short.
The recent rate history
These figures come from the department's minimum wage history page, which lists every Montana rate back to 1971. A 2006 ballot initiative set $6.15 from January 1, 2007, and indexing has moved the rate every January since 2008 except 2010 and 2016, when the adjustment left it unchanged.
| Effective date | Montana rate | Increase over prior year |
|---|---|---|
| Jan. 1, 2022 | $9.20 | 45 cents |
| Jan. 1, 2023 | $9.95 | 75 cents |
| Jan. 1, 2024 | $10.30 | 35 cents |
| Jan. 1, 2025 | $10.55 | 25 cents |
| Jan. 1, 2026 | $10.85 | 30 cents |
The pattern is worth reading as a budgeting tool rather than a forecast. Five years of adjustments ran between 25 and 75 cents, and the recent ones cluster near 30 cents. Nothing in the statute caps the move, so a high inflation year produces a bigger step, as 2023 did.
The Next Scheduled Increase
The next increase takes effect January 1, 2027, and the amount is not yet public. As of the last check on September 25, 2026, the Department of Labor and Industry had not published a 2027 rate, and any source quoting one is guessing.
The timing is mechanical. MCA 39-3-409 requires the department to make the adjustment no later than September 30 of each year, and the new figure becomes effective on January 1 of the following year. Montana employers therefore get about three months of notice, delivered as a one-page determination letter rather than a legislative fight.
The formula is equally mechanical. The department applies the increase, if any, in the Consumer Price Index (CPI) for all urban consumers, U.S. city average, all items, measured from August of the preceding year to August of the year in which the calculation is made, then rounds to the nearest five cents.
In plain terms, the adjustment follows a year of inflation, and only a rise counts. If there is no increase in the index, no adjustment is made and the rate stays where it is.
How the current number was calculated
The department shows its arithmetic in each determination letter, which makes the mechanism easy to sanity check. Here is the published calculation that produced the current rate, taken from the 2026 Montana minimum wage determination letter.
| Step in the calculation | Amount |
|---|---|
| Prior minimum wage | $10.55 |
| Increase in the CPI over prior year | 2.92 percent |
| Inflation adjustment | $0.31 |
| Subtotal | $10.86 |
| Rounded to the nearest $0.05 | $10.85 |
Tipped Employees and the Tip Credit
No tip credit is allowed in Montana. The Department of Labor and Industry puts it in one sentence: no tip credit, meal credit, or training wage is allowed under Montana wage and hour laws. A tipped employee receives the full $10.85 per hour in cash wages, and tips are on top.
That means the entire federal machinery of tip credits, tip pools used to satisfy a wage floor, and top-up calculations when tips fall short simply does not apply here. There is no cash wage below the standard rate to track and no shortfall to make up, because the employer already paid the full floor.
The meal credit ban is the part people miss. In some states an employer can count the value of a shift meal toward the wage floor. In Montana that is not available, so a free staff meal is a benefit you chose to give and never a component of the hourly rate.
City and County Rates
There are no city or county minimum wages in Montana, and no Montana local government is permitted to create one. The ban is written into state law: MCA 7-1-4203, enacted in 2021 as part of the Political Subdivision Employer Mandate Prohibition Act.
The statute says a political subdivision, meaning a local government such as a city or county, may not enact, administer, or otherwise require an employer to provide an employee or class of employees with a wage or employment benefit that is not required by state or federal law. The full text sits in the Montana Code Annotated.
The law's definitions reach further than wages alone. Employment benefit is defined to include paid or unpaid leave, health and retirement benefits, advance scheduling notice, and additional pay for schedule changes, so predictive scheduling and local sick leave ordinances are off the table in Montana too. Subsection (2) preserves one exception: a city or county may still set wages and benefits for its own employees.
For a private employer the practical effect is a single number statewide. A crew in Billings, a shop in Missoula, a lodge outside Whitefish, and a seasonal operation in Gardiner all run on $10.85 per hour. There is no boundary lookup, no split payroll by jurisdiction, and no local poster.
Exemptions and Industry Carve-Outs
Montana has no industry-specific minimum wage. There is no fast food rate, no healthcare rate, and no general agricultural rate. What exists instead is a long list of individual exemptions in MCA 39-3-406, published in full on the department page on minimum wage and overtime exemptions.
Read that list carefully before relying on any line of it. The department lays out three ground rules: exemptions are narrowly construed against the employer asserting them (read as tightly as the words allow), they are typically applied on an individual workweek basis, and the burden of proving one rests on the employer.
| Who is exempt from the minimum wage | What the exemption covers | Practical note |
|---|---|---|
| Executive, administrative, professional, outside sales | White collar duties tests under the federal regulations | Same duties tests as the federal white collar rules |
| Computer employees | Analysts, programmers, software engineers, network administrators | Only where the employee earns not less than $27.63 an hour under 29 CFR 541.400 or 541.402 |
| Apprentices and learners | A commissioner-granted exemption not to exceed 30 days of employment | Granted by the commissioner, not self-declared; this is not a probationary rate for ordinary new hires |
| Learners under 18 employed as farm workers | Up to 180 days from the initial date of employment | Wages during that window may not be less than 50 percent of the state rate, which is $5.425 at the 2026 figure |
| Immediate family and dependents of the employer | Family members, or people dependent on the employer for half or more of their support | Narrow; a relative on the payroll doing ordinary work is still an employee |
| Domestic and household work | Menial chores in private homes, and direct care of the household head’s dependent children | Babysitting, mowing lawns, and cleaning sidewalks are the examples the statute gives |
| Companionship and respite care | Care employed directly by a family member or legal guardian | Follows the federal definition in 29 CFR 552.6 |
| Nonprofit volunteers | People who are not regular employees and volunteer their services | Reimbursement does not break the exemption; a regular staff role does |
| Seasonal nonprofit camps and conference centers | Organized camps, religious or educational conference centers | The exemption attaches to the establishment, not to the season |
| Resident managers | Lodging establishments and assisted living facilities where the manager lives on site | Living on site is the condition, not a job title |
| Foster parents and public assistance placements | Licensed foster care for up to six children, and Title 53 work skills placements | Placements outside the skills activity are ordinary employment |
| Direct sellers and federal employees | Direct sellers as defined in 26 U.S.C. 3508, and employees of the United States | Independent contractor status must be genuine; misclassification is not an exemption |
Agriculture deserves a closer look, because the answer surprises people. Farm and ranch employees are exempt from Montana overtime, not from the Montana minimum wage. They appear only in the overtime section of MCA 39-3-406, so a ranch hand is owed $10.85 for every hour and is not owed time and a half after 40.
Taxicab drivers, motor carrier drivers, small forestry crews of eight or fewer, and country elevators with five or fewer employees sit in that same overtime-only group. The minimum wage still applies to them in full; only the overtime rule falls away.
The $4.00 rate almost never applies
Montana law does contain a $4.00 per hour rate, but very few employers can use it. MCA 39-3-409(3) sets it for a business whose annual gross sales are $110,000 or less, and the department attaches a condition that removes most of its practical reach.
That condition works employee by employee. If an individual employee is producing or moving goods between states, or is otherwise covered by the Fair Labor Standards Act, that employee must be paid the greater of the federal minimum wage or the Montana minimum wage.
Individual coverage under federal law is broad. Handling out-of-state goods, processing card payments, or regularly using the mail or phone across state lines can pull an employee in. Treat $4.00 as a provision that needs written legal confirmation for your specific business before you rely on it, not as a small business discount.
Youth and Training Wage
Montana has no youth wage and no training wage. A 16-year-old on the first day of a summer job earns $10.85 per hour, the same as a 20-year veteran of the same crew.
The federal opportunity wage of $4.25 per hour for employees under 20 during their first 90 consecutive calendar days does not reach into Montana. MCA 39-3-409 compares the state figure to the federal rate while excluding the special provisions for a training wage, and the department states flatly that no training wage is allowed under Montana law. That closes the door from both directions.
Two narrow openings exist, and neither one is a starter rate. The commissioner may exempt apprentices or learners for a period not to exceed 30 days of employment. That is a case-by-case determination by the state, not something an employer applies on its own.
The second opening is for young farm workers. Learners under 18 employed as farm workers may be paid not less than 50 percent of the state minimum wage for up to 180 days from their initial date of employment, which works out to $5.425 an hour against the current rate.
If you use the farm learner provision, put the 180th day in the employee record on the day you hire, along with the birthdate that ends it. Dated obligations like that are exactly what a proper employee record is for, and it is one of the things FirstHR is built to surface before the deadline passes rather than after.
The Poster Requirement
Montana does not require the state minimum wage poster. The Department of Labor and Industry describes the Montana Wage and Hour poster as an optional posting recommended for employers to display alongside required labor postings, and it publishes a new English and Spanish version each year at no cost.
The federal side is not optional. The Fair Labor Standards Act poster is required at covered workplaces under 29 CFR 516.4, and it has to be displayed where employees can readily see it. Montana employers who are covered by federal law therefore have a mandatory wage poster on the wall regardless of what state law says about the state sheet.
Post the state sheet anyway. The current version carries the $10.85 figure and the January 1, 2026 effective date on its face, along with the payment of wages deadlines, and it costs nothing to print. Swap it every January when the new one appears.
How the State Rate Meets the Federal Floor
Montana's $10.85 sits $3.60 above the federal minimum wage of $7.25, which has not moved since July 24, 2009. MCA 39-3-409 resolves the overlap directly: the minimum wage must be the greater of the federal rate or the state figure, so in Montana the state rate governs.
MCA 39-3-408 covers the other direction. When an employee is covered by federal law, the state minimum wage sections still apply whenever state law provides the higher floor, which it currently does.
Overtime is where the two laws line up. Montana's own rule in MCA 39-3-405 matches the federal one: time and a half after 40 hours in a workweek. The calculation is familiar; it simply runs on the Montana pay rate.
What to Do When the Rate Rises
A Montana rate change is a payroll task, not a legal project, and it takes about an hour if you work through it in order. The determination letter lands by September 30 for a January 1 effective date, so nothing here should ever be a scramble.
Keep the arithmetic behind each January change somewhere you can find it later. Wage claims arrive long after the fact, and a saved calculation is worth more than a memory.
FirstHR is an onboarding and HR platform, not a payroll provider. What it holds is the employee record a rate change touches: who is hourly, who is inside a dated exemption window, and who has acknowledged the notice.
Frequently Asked Questions
What is the minimum wage in Montana?
Montana’s minimum wage is $10.85 per hour, the rate in force since January 1, 2026. That figure succeeded the $10.55 floor that ran through all of 2025. The Department of Labor and Industry set out the increase in a determination letter dated September 23, 2025, which Commissioner Sarah Swanson signed. The rate’s legal home is MCA 39-3-409, the section Montana voters rewrote by initiative in 2006 so that the wage would adjust automatically for the cost of living. Under that section, the higher of two numbers wins: the federal rate or the inflation-indexed state amount. Montana payroll therefore runs on the state amount for as long as it stays above the federal $7.25. Small employers get no rate of their own, apart from one narrow exception for businesses beyond the reach of the Fair Labor Standards Act.
Does Montana allow a tip credit for restaurant staff?
No. Montana does not let an employer count tips toward the minimum wage in any form. The Department of Labor and Industry rules out the tip credit, the meal credit, and the training wage together in a single line of its wage and hour guidance. Every server, bartender, barista, and delivery driver is owed the full $10.85 per hour in cash from the employer, and whatever customers leave belongs to the employee on top of that. No other rule sets Montana apart from most of the country as sharply, and it is the one that catches multi-state operators. A payroll setup that pays the federal tipped cash wage of $2.13 breaks Montana law from the very first hour.
Does any Montana city have its own minimum wage?
No, and state law stops any Montana city or county from adopting one. Enacted in 2021, the Political Subdivision Employer Mandate Prohibition Act put that ban in MCA 7-1-4203, which bars a local government from passing, administering, or otherwise imposing on employers any wage or employment benefit that state or federal law does not already require. The section carves out only one exception: a city or county may still decide pay for its own staff. For a private business, the result is a single statewide number, the same in Billings, Missoula, Bozeman, Great Falls, Helena, Kalispell, and every small town in between.
When does the Montana minimum wage go up next?
The next change lands on January 1, 2027, but the Department of Labor and Industry had not announced the amount when this page was last checked on September 25, 2026. MCA 39-3-409 requires the department to finish the calculation by September 30 each year, with the result applying from the next January 1, so employers normally see the new number in late September. The math follows inflation: the department takes the rise, if any, in the Consumer Price Index for all urban consumers (U.S. city average, all items) between August of the prior year and August of the current one, and rounds the result to the nearest five cents. When the index fails to rise, nothing changes and the current rate carries over.
Can I pay a teenager or a new hire a training rate in Montana?
No. Montana has neither a training wage nor a youth wage, so a 16-year-old starting a first job is owed the same $10.85 per hour as a seasoned employee. The federal opportunity wage of $4.25 per hour for workers under 20 has no effect here, because MCA 39-3-409 sets the training wage provisions aside when it measures the state rate against the federal one. Only two small openings exist, both in MCA 39-3-406. The commissioner can grant an apprentice or learner an exemption lasting no more than 30 days of employment, and a learner under 18 employed as a farm worker may be paid no less than 50 percent of the minimum wage for up to 180 days after the first day on the job.
Do I have to post a minimum wage poster in Montana?
Not under state law. The Department of Labor and Industry calls its Montana Wage and Hour poster optional: a sheet it recommends hanging next to the postings that are mandatory, not one it requires. Each year the department releases a new English and Spanish edition for free, and the current one shows the $10.85 rate and its January 1, 2026 start date. Federal law works differently: employers covered by the Fair Labor Standards Act must display its poster under 29 CFR 516.4. My advice is to put the state sheet up anyway, because a current number on the wall settles pay questions faster than any policy document.
Are agricultural workers covered by the Montana minimum wage?
Yes, with one age-limited exception. Agriculture shows up in MCA 39-3-406 only among the overtime exemptions, not among the exemptions from both minimum wage and overtime. A ranch hand or farm employee therefore earns at least $10.85 for every hour worked but has no right to time and a half after 40. The age-limited exception covers farm workers under 18 who are learners: for up to 180 days from their first day of employment, they may be paid no less than 50 percent of the state minimum wage. A separate group, retired or semiretired people doing part-time incidental work as a condition of living on a farm or ranch, is exempt from both rules.