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- Montana’s 2026 minimum wage is $10.85
- The rate is indexed each year
- Tips do not reduce the employer-paid minimum
- The $4 small-business rule is narrow
- Most work time must be counted
- Overtime is a separate calculation
- Coverage and exemptions require the actual facts
- Local laws and public contracts can add requirements
- Montana enforces wage claims
- Common questions about Montana minimum wage
- What is Montana’s minimum wage in 2026?
- Can Montana employers take a tip credit?
- Can every small business pay $4?
- Does Montana increase its rate annually?
- Sources
Key Facts
- Montana state level: Montana’s minimum wage is $10.85 per hour beginning January 1, 2026.
- Montana state level: The rate is adjusted annually using CPI-U inflation and rounded to the nearest five cents.
- Montana state level: Montana does not allow a tip credit, meal credit, or training wage against its ordinary minimum.
- Montana and federal levels: The special $4 rate is limited to businesses with annual gross sales of $110,000 or less that are not covered by the FLSA; federal coverage of an employee can remove that exception.
- Montana state level: Covered nonexempt employees generally receive time-and-a-half after 40 hours in a workweek.
- Montana state level: Workers can file an unpaid-wage claim with Montana DLI or pursue a claim in district court.
Montana’s minimum wage rose to $10.85 per hour on January 1, 2026. That statewide floor applies to most covered work, but coverage, exemptions, compensable time, and the narrow small-business provision still matter.
Montana’s 2026 minimum wage is $10.85
The Montana Department of Labor and Industry calculated a 2.92% CPI-U increase from the prior $10.55 rate. The mathematical result was $10.86, which state law required the department to round to the nearest five cents, producing $10.85.
The department issued its determination on September 23, 2025, and the new rate took effect January 1, 2026. The work date—not the paycheck date—identifies which annual rate applies.
The rate is indexed each year
Montana Code Annotated section 39-3-409 requires an annual inflation adjustment. DLI compares CPI-U from August of the preceding year to August of the calculation year, announces the result by September 30, and applies it the following January 1.
If inflation does not increase, no CPI adjustment is made. Montana’s rate must also be at least the federal minimum.
Tips do not reduce the employer-paid minimum
Montana prohibits employers from using tips as a credit toward the required wage. A covered server, bartender, or other tipped worker must receive the applicable Montana minimum from the employer before tips are added.
Montana also disallows a meal credit and a general training wage. This is more protective than the federal tip-credit and youth-training framework.
The $4 small-business rule is narrow
A business with gross annual sales of $110,000 or less may use a $4 hourly rate only if the business is not covered by the federal Fair Labor Standards Act. Both conditions must be satisfied.
Even then, an individual employee who produces or moves goods in interstate commerce, or is otherwise covered by the FLSA, must receive the greater applicable federal or Montana rate. The sales figure alone cannot prove that $4 is lawful.
Federal enterprise coverage can include hospitals, schools, government bodies, and qualifying enterprises engaged in commerce. Individual coverage can also arise from an employee’s own interstate activities.
Most work time must be counted
Montana DLI identifies preparation, opening and closing, company travel, required meetings, and training as examples of hours worked. Employers must record and pay covered employees for qualifying work time.
A salary, commission, or piece rate does not automatically avoid the hourly floor. Total creditable straight-time compensation must satisfy the minimum for all covered hours.
Overtime is a separate calculation
Covered nonexempt employees generally must receive one and one-half times their regular rate for hours over 40 in a workweek. The regular rate may include more than a stated base wage when multiple rates or qualifying additional earnings apply.
Montana law contains occupational and employment exemptions, including rules affecting some agricultural and seasonal recreational work. Exemption analysis depends on statutory requirements, not only a job title.
Coverage and exemptions require the actual facts
Montana’s statute lists exclusions from the definition of employee and specialized rules for particular work. Independent-contractor labels, temporary status, or part-time scheduling do not by themselves settle coverage.
The broader guide to wages and pay rules explains how promised pay, hours, minimum wage, and overtime fit together nationally.
Local laws and public contracts can add requirements
The $10.85 figure is the statewide general minimum. A public works or nonconstruction service contract can carry a prevailing-wage rate and fringe-benefit requirement above the ordinary floor.
Before relying on a city-specific rule, verify the current local code and Montana limits on local authority. A general state source does not prove that a particular municipality has enacted a separate rate.
Montana enforces wage claims
Montana DLI’s Compliance and Investigations Bureau enforces minimum-wage, overtime, wage-payment, prevailing-wage, and child-labor provisions. A worker who believes wages remain unpaid may file a claim with DLI or pursue an action in district court.
Useful records include schedules, timecards, pay stubs, tip records, wage agreements, and messages assigning work outside recorded hours. Filing routes and deadlines can differ by claim.
Common questions about Montana minimum wage
What is Montana’s minimum wage in 2026?
It is $10.85 per hour beginning January 1, 2026.
Can Montana employers take a tip credit?
No. Tips cannot be credited against the Montana minimum wage.
Can every small business pay $4?
No. The provision requires annual gross sales of $110,000 or less and no FLSA coverage; individual federal coverage can also defeat the exception.
Does Montana increase its rate annually?
The state calculates a CPI-U adjustment each year and announces the next rate by September 30.
Sources
- Montana DLI: State Minimum Wage
- Montana DLI: 2026 Determination Letter
- Montana DLI: Wage and Hour FAQ
- Montana DLI: Federal Coverage Guide
- Montana DLI: Overtime
- Montana DLI: Filing a Wage Claim
- MCA 39-3-409: Minimum Wage Rates and Exception
- MCA 39-3-402: Definitions and Tip Treatment
- MCA 39-3-405: Overtime Compensation
- MCA 39-3-408: State and Federal Coverage
