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 increase 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 every January without anyone voting on it, which is the quiet kind of change that slips past a small employer.
This page is the rate, the schedule, the exemptions that genuinely exist, and the January checklist. It is sourced from the Department of Labor and Industry and the state code. For overtime, final paychecks, and the good cause termination rule that makes Montana unlike any other state, the Montana HR compliance guide covers that ground.
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 indexed state figure. 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: it compares the state figure to the federal rate excluding the value of tips received by the employee and excluding the special provisions for a training wage. That single clause is why the sections below on tips and youth pay are so short.
The recent rate history
These figures come from the department minimum wage history page, which lists every Montana rate back to 1971. Indexing has applied each January since the 2006 ballot initiative took effect in 2007.
| 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 August 18, 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 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. 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 apparatus 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 wider mechanics, and how differently they work in states that do allow the credit, are covered in the guide to minimum wage for tipped employees.
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. This is not simply an absence of ordinances, it is a statutory prohibition.
MCA 7-1-4203, enacted in 2021 as part of the Political Subdivision Employer Mandate Prohibition Act, says a political subdivision 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 definition section reaches 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 states that exemptions are narrowly construed against the employer asserting them, are applied on an individual workweek basis, and that 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; see the exempt and non-exempt guide |
| 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 its own sentence, 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. If you are sorting who is exempt from what, the exempt and non-exempt breakdown walks through the duties tests.
The $4.00 rate almost never applies
Montana law does contain a $4.00 per hour rate: MCA 39-3-409(3) sets it for a business whose annual gross sales are $110,000 or less. The department attaches a condition that removes most of its practical reach. 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, which is a case-by-case determination by the state rather than something an employer applies on its own. Separately, 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. For the wider stack of what has to go on the wall or into an employee's hands, see the guide to required employee notices.
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 adds the reverse case for completeness. The state minimum wage sections apply to an employee covered by federal law whenever state law provides the higher floor, which it currently does. The national picture, including why the federal number has been frozen for so long, is covered on the federal minimum wage page.
The place federal law still does the work is overtime. Montana adds nothing to the Fair Labor Standards Act on hours, so time and a half after 40 hours in a workweek is a federal calculation performed on a Montana pay rate. The overtime guide covers the regular rate arithmetic that a wage increase quietly changes.
If you want the longer view of how the national floor has moved and stalled, the federal minimum wage increases page tracks it year by year.
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. What to retain and for how long is covered in the guide to payroll records.
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. If you are building that record from scratch, start with the guide to hiring employees in Montana.
Frequently Asked Questions
What is the minimum wage in Montana?
The Montana minimum wage is $10.85 per hour, effective January 1, 2026. It replaced the $10.55 rate that applied through 2025. The Department of Labor and Industry announced the change in a determination letter dated September 23, 2025, signed by Commissioner Sarah Swanson. The rate lives in MCA 39-3-409, which was rewritten by voter initiative in 2006 to add an automatic cost-of-living adjustment. The statute says the minimum wage must be the greater of the federal rate or the indexed state figure, so Montana employers work from the state number as long as it sits above the federal $7.25. There is no separate rate for small employers except one narrow exception for businesses outside the reach of the Fair Labor Standards Act.
Does Montana allow a tip credit for restaurant staff?
No. Montana allows no tip credit at all, and the Department of Labor and Industry states it in exactly those terms: no tip credit, meal credit, or training wage is allowed under Montana wage and hour law. A server, bartender, barista, or delivery driver must receive the full $10.85 per hour in cash wages from the employer, and tips sit on top of that as the employee’s own money. This is the single biggest difference between Montana and most of the country, and it is where multi-state operators get caught. Payroll configured for a federal tip credit of $2.13 in cash wages is illegal in Montana on the first hour worked.
Does any Montana city have its own minimum wage?
No, and no Montana city or county can create one. MCA 7-1-4203, part of the Political Subdivision Employer Mandate Prohibition Act enacted in 2021, says a political subdivision 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 one carve-out in that section lets a city or county set pay for its own workforce. For a private employer, that means one number applies 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 takes effect January 1, 2027, and the amount was not published as of August 18, 2026. MCA 39-3-409 requires the Department of Labor and Industry to make the adjustment no later than September 30 of each year, effective the following January 1, so Montana employers usually learn the new figure at the end of September. The adjustment is the increase, if any, in the Consumer Price Index for all urban consumers, U.S. city average, all items, measured from August of the preceding year to August of the calculation year, then rounded to the nearest five cents. If the index does not rise, no adjustment is made and the rate holds.
Can I pay a teenager or a new hire a training rate in Montana?
No. Montana allows no training wage and no youth wage, so a 16-year-old on day one earns the same $10.85 per hour as everyone else. The federal opportunity wage of $4.25 per hour for employees under 20 does not carry over, because MCA 39-3-409 excludes the special provisions for a training wage when it compares the state rate to the federal rate. Two narrow exceptions exist in MCA 39-3-406. The commissioner may exempt an apprentice or learner for a period not to exceed 30 days of employment, and learners under 18 employed as farm workers may be paid not less than 50 percent of the minimum wage for up to 180 days from their initial date of employment.
Do I have to post a minimum wage poster in Montana?
Not under state law. 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. The department publishes a fresh English and Spanish version each year and gives them away, and the current sheet carries the $10.85 rate with the January 1, 2026 effective date on its face. The federal picture is different: the Fair Labor Standards Act poster is required at covered workplaces under 29 CFR 516.4. My advice is to post the state sheet 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 appears in MCA 39-3-406 only on the list of exemptions from overtime, not on the list of exemptions from both minimum wage and overtime, so a ranch hand or farm employee is owed $10.85 per hour for every hour worked but is not owed time and a half after 40. The exception is for learners under 18 employed as farm workers, who may be paid not less than 50 percent of the state minimum wage for up to 180 days from their initial date of employment. Retired or semiretired people doing part-time incidental work as a condition of living on a farm or ranch are exempt from both.