Ohio's minimum wage rises to $11.40 in 2027, but not for everyone

Ohio's minimum wage goes from $11.00 to $11.40 an hour on January 1, 2027, and the cash wage for tipped workers rises from $5.50 to $5.70 an hour plus tips. The Ohio Department of Commerce announced both figures on September 30, 2026. The new rates cover employees of businesses with annual gross receipts above $419,000. Workers at smaller businesses, and 14- and 15-year-olds, are still owed only the federal $7.25.

That second group is the part most people miss. Ohio has two minimum wages, and which one applies depends on how much your employer sells, not on what job you do.

Where $11.40 comes from

Nobody voted on this raise. Article II, Section 34a of the Ohio Constitution, approved by voters in November 2006, ties the wage to inflation: every September 30 the state applies the change in the CPI-W, the consumer price index for urban wage earners and clerical workers, over the previous 12 months, and the result takes effect the next January 1, rounded to the nearest five cents.

This year the department measured a 3.5% rise through August 2026. Applied to $11.00 that gives $11.385, which rounds to $11.40. The tipped figure isn't calculated separately: the constitution lets employers pay tipped workers as little as half the minimum, and half of $11.40 is $5.70.

Who can still be paid $7.25

The same section of the constitution says employees under 16, and employees of businesses with annual gross receipts of $250,000 or less in the preceding calendar year, get no more than the federal floor. That $250,000 line from 2006 moves with inflation too, rounded to the nearest $1,000. It was $405,000 for 2026; 3.5% on top is $419,175, which becomes $419,000 for 2027.

Some early coverage of the announcement quoted $420,000. The department's release and the official 2027 poster both say $419,000, and the rounding rule backs them up. The difference only matters to a business that grossed between those two numbers, but if that's your employer, $419,000 is the figure that counts.

Two details trip people up. First, the test looks at the employer's gross receipts for the previous calendar year, so whether you get $11.40 in 2027 depends on what the business took in during 2026, not on its size or headcount. A restaurant with a handful of employees can clear $419,000 in sales. Second, the age cutoff is 16, not 18. A 16-year-old working a register at a large grocery chain gets $11.40 like everyone else, while a 15-year-old in the same job can be paid $7.25. Hours limits for minors in Ohio are a separate set of rules.

The gap is large. At $7.25, a full-time year of 2,080 hours pays $15,080, against $23,712 at $11.40. That's $8,632 a year, or $4.15 for every hour worked.

What $11.40 an hour pays after taxes

At 40 hours a week, $11.40 is $456 a week before taxes. Ohio's income tax doesn't touch it: the state subtracts a personal exemption from your income and taxes nothing below $26,050, so a single full-time minimum wage worker owes no Ohio income tax at all. Federal income tax and FICA are the whole bill. Here is the full-year picture for a single filer with no other income, using 2026 tax rules:

One thing the receipt leaves out: most Ohio cities and villages tax wages, and the city tax hits the first dollar. At a 2.5% rate like Columbus or Cleveland, the same year costs another $592.80. The take-home pay calculator has a local tax field for exactly this; enter your city's rate and it runs the same math as above.

The 40-cent raise, and the $7.25 gap, after taxes

The table runs the same single filer through all three rates.

Full time, single filer	$7.25 (small employer)	$11.00 (2026)	$11.40 (2027)
Gross pay per year	$15,080.00	$22,880.00	$23,712.00
Federal income tax	$0.00	$678.00	$761.20
Social Security and Medicare	$1,153.62	$1,750.32	$1,813.97
Ohio income tax	$0.00	$0.00	$0.00
Take-home per year	$13,926.38	$20,451.68	$21,136.83
Take-home per month	$1,160.53	$1,704.31	$1,761.40

The raise adds $832 of gross pay over a full year, and you keep $685.15 of it, about 82 cents of each new dollar, because only the 10% federal bracket and FICA apply. That's $57.10 a month, or $26.35 on a biweekly check. It roughly keeps pace with prices and no more, which is what an inflation-indexed wage is built to do.

The bigger number is in the first column. A full-time worker at a small business keeps $7,210.45 less a year than one doing the same job for an employer above the threshold. At $7.25 the federal income tax is zero, since the pay doesn't clear the standard deduction, so FICA is the only tax.

Tipped workers: the employer tops up to $11.40

An employer may pay $5.70 an hour to a tipped employee, which Ohio defines as someone who customarily and regularly receives more than $30 a month in tips. That $5.70 is not the minimum wage. It's the cash part, and the employer takes a tip credit of up to $5.70 for the rest. If cash wages plus tips fall short of $11.40 for the hours worked, the employer has to make up the difference, and the poster puts the burden on the employer to show that tips covered it.

The $5.70 cash wage only exists where the $11.40 minimum does. At a business under the $419,000 threshold, the state figures don't apply and the floor is the federal $7.25.

Overtime moves with the raise. Ohio pays time and a half past 40 hours in a workweek, so the overtime floor becomes $17.10 an hour, and a tipped employee's overtime hour must pay at least $11.40 in cash. Our guide to overtime in Ohio has the details.

Checking your first 2027 paycheck

January 1, 2027 falls on a Friday. Hours worked through December 31 are owed at $11.00 and hours from New Year's Day on at $11.40, so a pay period that spans the holiday may show two rates on the stub. Employers must also display the official 2027 poster, which is on the department's website. If you already earn more than $11.40, nothing in the law requires your employer to raise you.

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