Compliance & Payroll Basics · Policy-manual review
2026 State Minimum Wage & Payroll Tax Quick Reference for Small Business
A reference for 15 selected states covering 2026 minimum wages, withholding, introductory unemployment rates and payroll exceptions.
At a glance
Assign an owner to review state notices and announced changes before payroll runs affected by them. Multi-state teams add jurisdictions and filing obligations; compare the actual work, software fees and provider scope before deciding whether automation is worth the cost.
§1Why one table beats fifteen state DOL bookmarks
Minimum-wage coverage, state income-tax withholding, and unemployment insurance (SUI) wage bases and rates vary by jurisdiction. They need not follow the same calendar or 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 15 selected states: California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Georgia, North Carolina, Michigan, New Jersey, Virginia, Washington, Massachusetts and Arizona. The 2026 figures include midyear changes checked in October, including the Georgia withholding update and Florida wage increase. Use the assigned employer tax notice and the relevant state or local agency instructions before filing. The table is a starting point for those checks.
§22026 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 | Under EDD DE 44, supplemental pay made with regular wages uses the combined payment. For separate payments, an employer may use the aggregate calculation or the optional flat method: 10.23% for bonuses and taxable stock options, 6.6% for other supplemental wages |
| Texas | $7.25/hr state minimum; federal coverage rules also apply | No | 2.7% or your industry average, whichever is greater, on a $9,000 wage base | No state wage withholding, but UI liability remains. General coverage can arise from $1,500 paid in a quarter or employment in 20 different weeks; special categories have other tests |
| 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% including the 0.075% Re-employment Services Fund charge, on a $17,600 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 $17.05/hr for covered employers with four or more workers; Cook County $15.40/hr where its ordinance applies, both from July 1, 2026 | Yes, flat 4.95% | 3.35% standard new-employer rate (3.45% for specified industries); other small-wage or industry rules may apply on a $14,250 wage base | Check the local ordinance and coverage as well as the state floor. Local July changes do not establish that the statewide rate also changed during 2026 |
| Pennsylvania | $7.25/hr under the 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 at least $405,000 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 for FLSA-covered work; state statutory floor is $5.15 where applicable | Yes, flat 4.99%; new withholding tables apply from May 11, 2026, following earlier 5.19% withholding | 2.64% UI plus a 0.06% administrative assessment (2.70% combined), 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 $9,000 base for qualified employers in good standing; $9,500 for nonqualifying employers | Michigan's flat income tax rate is subject to a statutory revenue trigger that has changed it from year to year, so check the current Treasury guidance each January |
| 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% | Combined UI + workforce-fund rates: 2.8% new employer (2.6825% UI + 0.1175% WF/SWF), 0.425% employee (0.3825% UI + 0.0425% WF/SWF), on a $44,800 base | Disability and family-leave deductions are separate from UI/workforce contributions: 2026 employee DI is 0.19% and FLI 0.23%, each with a $171,100 wage base. Confirm the employer disability plan and assigned rate |
| 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 the scheduled January 2027 and January 2028 increases |
| Washington | $17.13/hr, the highest state floor in the country; Seattle and Tukwila set even higher local minimums | No | ESD assigns new employers an industry-based rate at 115% of the industry average, with a 1% minimum. Use the assigned total rate notice; do not add a universal 0.72% social charge. The 2026 taxable wage base is $78,200 | WA Cares is a separate employee-funded 0.58% premium on covered wages without a wage cap. Verify any approved employee exemption before collecting it |
| Massachusetts | $15.00/hr, unchanged since January 1, 2023 | Yes, plus a 4% surtax on taxable income above the 2026 inflation-adjusted threshold of $1,107,750 | 2.42% standard new-employer rate; 6.08% for construction, 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 | Check the applicable city ordinance. Tucson voters adopted its local wage law in 2021; the 2026 rate is $15.45, with its own geographic coverage rules |
Use the assigned employer notice for the payable rate and wage base. Industry rules, account standing and extra assessments can affect the introductory amount; claims experience affects later rates. These entries are general references, not a rate assignment for every business.
§3Multi-state remote teams: SUI follows the employee, not the HQ
Apply the UI localization tests for each employee. Services localized in one state normally belong there; work in several states may require considering the base of operations, place of direction and control, and residence in that order under the applicable rules. Five employees whose services are separately localized in five states may create five accounts when the employer meets each liability test. A temporary trip does not automatically require another UI account.
Income-tax withholding has a separate analysis: examine where work occurs, residence rules, reciprocity and any convenience-of-the-employer provisions. For a California employer hiring someone who works from Arizona, check Arizona UI localization and coverage thresholds and the applicable withholding rules before the first run. Company headquarters alone does not answer either question.
Before the first paycheck, document each new hire’s work locations, tax residence and relevant coverage rules. Confirm which registrations and filings the payroll provider actually performs and complete any customer-owned setup tasks. A state reference table cannot replace that assignment of responsibilities. Pair wage floors with exempt salary thresholds in our exempt vs non-exempt guide and federal deposit timing in our payroll tax deposit schedule guide.
§4The 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.
§5FAQ: state minimum wage and payroll tax basics
What are the new payroll taxes for 2026? At the federal level, the 2026 Social Security earnings ceiling is $184,500. The employee and employer each pay 6.2% for that portion, plus 1.45% each for Medicare. State and local deductions require separate rules. Source.
What is the 2026 wage limit for an employer to withhold FICA? For 2026, the Social Security portion stops at $184,500 of covered earnings. Medicare has no annual earnings ceiling, and employers start the extra 0.9% Medicare withholding after paying one employee more than $200,000 in that year. Source.
Does the federal minimum wage of $7.25 still apply anywhere in 2026? Yes. Texas, Pennsylvania and North Carolina have a general floor of seven dollars and twenty-five cents. Georgia sets a lower state amount, so federal coverage brings the required amount to $7.25. Check the employee and employer coverage rules and any applicable local or industry-specific requirement.
Do I owe SUI in a state if I only have one remote employee there? One worker can be enough, but the answer depends on localization, covered employment and that jurisdiction’s liability triggers. Arizona’s general test, for example, includes fifteen hundred dollars in a calendar quarter or a worker in twenty separate weeks. Check special-category and successor rules as well; headcount alone does not settle registration.
Why does my SUI rate differ from the new-employer rate shown here? An assigned rate can reflect claims experience, industry classification, surcharges or account standing. Read the employer notice to identify each component and its effective period. Our SUTA tax rate by state 2026 guide also discusses state bases and how these contributions interact with federal FUTA; check the final annual credit-reduction determination before filing.
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.
For that exact comparison, see our HR Compliance Checklist for small business guide.