Vermont Minimum Wage 2026
The minimum wage in Vermont is $14.42 per hour in 2026, effective January 1, 2026. Tipped employees can be paid a cash wage of $7.21 per hour, as long as tips bring them to the full minimum.
What is the minimum wage in Vermont in 2026?
The Vermont minimum wage is $14.42 per hour as of January 1, 2026, up from $14.01 in 2025. The rate adjusts every January based on the Consumer Price Index, with increases capped at 5 percent in any single year, and applies to employers with two or more employees.
Vermont's floor is nearly double what workers earn just across the Connecticut River. New Hampshire follows the federal $7.25, giving the two states the starkest border wage gap in New England and shaping how Vermont employers near the line compete for staff.
Tipped minimum wage in Vermont
The tipped minimum wage in Vermont is $7.21 per hour in 2026, set at 50 percent of the full minimum. It applies specifically to tipped employees of restaurants and hotels who customarily and regularly receive tips.
Tips plus the cash wage must reach the full $14.42 per hour. Since the tipped rate is defined as half the minimum, both figures move together every January, and a single fall announcement from the Vermont Department of Labor gives you both numbers for the coming year.
Vermont minimum wage history: 2020 to 2026
| Year | Minimum wage | Tipped wage |
|---|---|---|
| 2020 | $10.96 | $5.48 |
| 2021 | $11.75 | $5.88 |
| 2022 | $12.55 | $6.28 |
| 2023 | $13.18 | $6.59 |
| 2024 | $13.67 | $6.84 |
| 2025 | $14.01 | $7.01 |
| 2026 | $14.42 | $7.21 |
Upcoming minimum wage increases in Vermont
Vermont adjusts its minimum wage every January 1 by the CPI, capped at 5 percent per year, so another increase on January 1, 2027 is a near certainty. The Department of Labor announces the new rate each fall.
The cap means even in high-inflation years the increase cannot exceed 5 percent, which gives employers a worst-case ceiling for wage budgeting that most indexed states do not offer.
Minimum wage by city in Vermont
Vermont has no municipal minimum wages. Burlington, South Burlington, Rutland, and Montpelier all follow the statewide $14.42 rate, so a single annual update covers every location in the state.
The border, not the cities, is where the wage map gets dramatic. New Hampshire's $7.25 federal rate means a Vermont employer in the Connecticut River valley pays roughly twice the legal minimum of a competitor a bridge away, though in practice New Hampshire market wages run well above that floor.
State rate applies
State rate applies
State rate applies
State rate applies; New Hampshire across the river sits at the federal $7.25
What Vermont employers need to know
Two-employee threshold
Vermont's minimum wage applies to employers with two or more employees. Nearly every business qualifies, so treat $14.42 as the default floor.
Tipped employees
The $7.21 cash wage applies to tipped restaurant and hotel workers. Track tips per pay period and top up anyone whose combined earnings miss $14.42 per hour.
Annual January adjustment
The rate moves with CPI every January 1, capped at 5 percent. Update payroll when the Department of Labor publishes the new figure each fall.
Posting and records
Display the current Vermont minimum wage poster and keep payroll and tip records. With no local ordinances, the statewide rate is the only figure to track.
How other states compare
See how Vermont's $14.42 rate stacks up against other state minimum wages in 2026, or browse the full minimum wage index for all 50 states.
Last verified:
Sources: the US Department of Labor's state minimum wage table and official announcements from the Vermont labor department. Minimum wage laws change frequently; confirm current rates with those sources or legal counsel before setting pay.
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