Arizona minimum wage 2026: state, Flagstaff and Tucson rates

The Arizona minimum wage is $15.15 an hour in 2026 and applies to almost every employer in the state, whether it has two employees or two thousand. On January 1, 2027, it goes up to $15.65 an hour. That is the floor. If your staff work in Flagstaff or Tucson, a higher city rate applies for those hours, and you pay whichever rate is highest for each hour worked. This guide covers the state and city rates with their sources, the tip credit, the rules for minors, the earned paid sick time every Arizona employer owes, the payday and record rules, worked pay examples, and a checklist for the January change.

Arizona minimum wage 2026 and the 2027 increase

The Industrial Commission of Arizona (ICA) publishes the rate each year under the Fair Wages and Healthy Families Act. For 2026 the ICA set the minimum wage in Arizona at $15.15 an hour from January 1, 2026, up 45 cents from $14.70. For 2027 the rate is $15.65 an hour from January 1, 2027, a 50-cent increase, as shown on the ICA's 2027 minimum wage poster.

How the number is set: Proposition 206, approved by voters in November 2016, fixed the rate at $10.00, $10.50, $11.00 and $12.00 for 2017 through 2020. Since January 1, 2021, Arizona Revised Statutes section 23-363 raises the rate every January 1 by the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U, U.S. city average), comparing August of the prior year with the August before that, with the dollar increase rounded to the nearest five cents. The August 2026 CPI-U was 3.4% above August 2025. Applied to $15.15 that is 51.5 cents, which rounds to 50 cents, so the Arizona minimum wage 2027 figure is $15.65. The ICA posts the new rate and poster each fall, usually in September.

The federal minimum wage is still $7.25, so it plays no part in Arizona pay. For how Arizona compares with the other 49 states, see our minimum wage by state table.

Weekly pay examples at the Arizona minimum wage

These examples show gross pay before taxes for a non-exempt employee paid only by the hour.

Example with overtime. A warehouse picker in Mesa earns the state minimum of $15.15 and works 44 hours in one workweek. Arizona has no overtime law of its own, so the federal Fair Labor Standards Act (FLSA) applies: time and a half for hours over 40 in a workweek. The 4 overtime hours are paid at $22.725 an hour ($15.15 × 1.5).

1. Regular pay: 40 hours × $15.15 = $606.00.
2. Overtime pay: 4 hours × $22.725 = $90.90.
3. Total for the week: $606.00 + $90.90 = $696.90.

The same week in 2027 pays 40 × $15.65 = $626.00 plus 4 × $23.475 = $93.90, for $719.90. In Flagstaff in 2026 it pays 40 × $18.35 = $734.00 plus 4 × $27.525 = $110.10, for $844.10. If the employee also earns a shift premium or a non-discretionary bonus, add it to the regular rate before multiplying; our guide on how to calculate overtime walks through bonuses and two-rate weeks, and time and a half explains the rate itself.

Example with tips. A server in Phoenix works 30 hours in a week. The employer pays the tipped cash wage of $12.15, so cash wages are 30 × $12.15 = $364.50. The full minimum for those hours is 30 × $15.15 = $454.50, so the server must earn at least $90.00 in tips over the pay period. If tips come to only $60.00, the employer owes another $30.00. From January 1, 2027, the same week pays $379.50 in cash (30 × $12.65) against a floor of $469.50 (30 × $15.65), so tips must again reach $90.00. In Flagstaff the same server receives the full $18.35 an hour, $550.50 for the week, and keeps every tip on top.

Arizona minimum wage history, 2017 to 2027

Arizona has used a single statewide rate for all employer sizes since voters first set one in 2006. The 2017 to 2020 steps are written into section 23-363; the later figures are the ICA's annual CPI adjustments. The tipped column is the standard rate less the $3.00 maximum tip credit.

Over the decade the rate has risen $5.65, or 56.5%, from the $10.00 that took effect in 2017. Because the adjustment is tied to the CPI-U, the 2028 figure will not be known until the August 2027 index is published and the ICA announces it, which usually happens in September.

Tips, minors and who is covered

• Tip credit of up to $3.00. Section 23-363 lets an employer pay an employee who customarily and regularly receives tips up to $3.00 an hour less than the minimum wage, but only if the employer's records of reported tips (or the employee's FICA tip declarations) show that wages plus tips reached at least the full minimum wage for all hours worked, averaged over the payroll period. If tips fall short in a pay period, the employer makes up the gap. Tucson allows the same $3.00 credit against its higher rate; Flagstaff allows none.
• Minors earn the full rate. Arizona's law has no youth, student or training wage, so a 16-year-old bagging groceries in Chandler is owed the same $15.15 as an adult. The federal $4.25 youth wage for the first 90 days does not help an Arizona employer because the higher state rate applies. Hours are limited for workers under 16 under section 23-233: no more than 3 hours on a school day and 18 hours in a school week, no more than 8 hours a day and 40 hours a week when school is out, and no work between 9:30 p.m. and 6:00 a.m. before a school day (11:00 p.m. before a non-school day).
• Employer size does not matter. Unlike some states, Arizona has no lower rate for small employers. The Act's definitions carry a short list of exclusions, including employees of the State of Arizona or the federal government, people employed by a parent or sibling, casual babysitters, and employees of very small businesses with under $500,000 in gross annual revenue that are also outside the FLSA. If you think one of these fits your business, confirm it with the ICA before relying on it; most employers are covered.
• Hours worked. Required training, meetings, opening and closing count as hours worked and are paid at the minimum wage or more. Travel between job sites during the day counts too.
• Exempt employees. Arizona has no state salary threshold for exempt executive, administrative and professional employees, so the federal test applies: at least $684 a week plus the duties test. Our exempt vs non-exempt guide covers both parts.

Flagstaff minimum wage and Tucson minimum wage for 2026 and 2027

Two Arizona cities set their own rates, both adjusting on January 1. Each applies to hours worked inside the city limits, not to where the business is registered. The figures below come from the City of Flagstaff and City of Tucson minimum wage pages as of November 12, 2026.

Flagstaff. Voters approved Proposition 414 in 2016, which stepped the city rate up through 2022 and then indexed it to the CPI each January 1. The 2026 rate is $18.35. On September 11, 2026, the city announced that the Flagstaff minimum wage will be $18.95 an hour from January 1, 2027, applying the 3.40% August CPI increase to the 2026 rate (the city first reported $19.00 and corrected it to $18.95). The tipped wage schedule in the city code ended with 2025: since January 1, 2026, employees who regularly receive tips must receive the same minimum wage as everyone else, so a server in Flagstaff gets at least $18.35 an hour in cash before tips. The city publishes a poster in English, Spanish and Navajo, a written notice for employees and an employer signature form each year.

Tucson. Voters approved the Tucson Minimum Wage Act in November 2021. It raised the city rate in steps to $15.00 in 2025 and now adjusts it each year by the CPI-U. The City of Tucson lists $15.45 an hour for January 1 through December 31, 2026, and $16.00 an hour for 2027. The Act covers full-time, part-time and temporary employees who perform at least 5 hours of work per pay cycle inside Tucson, and excludes employees of the State of Arizona, the United States and tribal entities. Employers may take a tip credit of no more than $3.00, so the tipped cash wage is $12.45 in 2026 and $13.00 in 2027. The city's 2027 posters are available in English and Spanish.

Phoenix, Mesa, Scottsdale, Chandler, Glendale, Tempe and every other Arizona city use the state rate. A landscaping crew that works Monday in Tucson and Tuesday in Marana is owed $15.45 for Monday's hours and $15.15 for Tuesday's, and a time clock app with GPS and geofencing that records where each shift happened makes that split simple at payroll time.

Earned paid sick time: the other half of the Arizona wage law

Proposition 206 did two things. It raised the minimum wage, and it added earned paid sick time (EPST) to the same act, so the ICA enforces both. Every Arizona employer except the state and federal government owes it, and it covers full-time, part-time and temporary employees.

Accrual starts on the first day of work. An employee on 40 hours a week earns 1.33 hours of EPST a week and hits the 24-hour cap after 720 hours (18 weeks) or the 40-hour cap after 1,200 hours (30 weeks). Exempt employees are assumed to work 40 hours a week for accrual unless their normal week is shorter. Employers may instead grant the full year's hours up front on day one. Leave can be taken in hourly increments or the smallest increment your payroll system tracks, for the employee's own illness or preventive care, a family member's, a public health closure, or absences related to domestic violence, sexual violence, abuse or stalking. You may ask for reasonable documentation only after three or more consecutive workdays, and you cannot require the employee to find someone to cover the shift.

Three paperwork rules trip up small employers. Section 23-375 requires a written notice of EPST rights at hire, in English and Spanish, using the ICA's model notice. Each regular paycheck, or an attachment to it, must show the EPST available, the EPST used so far that year and the amount paid for it. And payroll records of hours worked, wages and EPST paid must be kept for four years; without them, the law presumes you did not pay what was owed. A PTO and leave tracker that accrues sick time from time clock hours and prints the balance on the pay stub covers all three. For how EPST fits with vacation and PTO policies, see our paid time off guide.

Overtime, paydays and records in Arizona

• Overtime follows the FLSA. Arizona has no state overtime statute and no daily overtime, so the U.S. Department of Labor's rule applies: non-exempt employees get at least 1.5 times their regular rate for hours over 40 in a workweek, and the regular rate can never be below the minimum wage. At $15.15 an overtime hour pays $22.725; at $15.65 it pays $23.475. For a tipped employee the overtime rate is based on the full minimum wage, not the $12.15 cash wage, so a tipped overtime hour in 2026 pays at least $22.725 less the $3.00 tip credit, or $19.725 in cash.
• Two paydays a month. Section 23-351 requires every employer to designate at least two fixed paydays each month, no more than 16 days apart. Regular wages must be paid within five business days after the pay period ends (ten days for some out-of-state employers with centralized payroll), and overtime or exception pay within 16 days of the end of the most recent pay period. A biweekly or semimonthly schedule satisfies the rule; a monthly one does not, except for certain professional and executive staff of out-of-state employers. Our guide to pay periods in a year compares the options.
• Posters. Section 23-364 requires the ICA's minimum wage notice and earned paid sick time notice to be posted where employees can see them, and new hires must receive the employer's name, address and phone number in writing. The ICA publishes a new poster for each rate year. Flagstaff and Tucson employers add the city posters.
• Records and penalties. Keep daily hours, wages and EPST records for four years (the FLSA's three-year rule is shorter, so the Arizona period controls). An employer that underpays owes the balance plus interest plus an additional amount equal to twice the underpayment. Recordkeeping and posting violations carry a civil penalty of at least $250 for a first violation and at least $1,000 for each later or willful one. Employees can file a claim with the ICA or sue within two years (three for willful violations), and any adverse action within 90 days of a complaint is presumed retaliatory.
• Breaks. Arizona does not require meal or rest breaks for adults. If you give short breaks of 20 minutes or less, the FLSA treats them as paid time; a bona fide meal period of 30 minutes or more where the employee is fully relieved of duty can be unpaid.

What employers should do before January 1, 2027

1. List every work location. Note whether each is inside Flagstaff or Tucson city limits and record the current and 2027 rate for each. Everywhere else uses the state rate.
2. Find everyone under $15.65. Update hourly rates for the first pay period that includes hours worked on or after January 1, 2027. In Tucson the floor is $16.00; in Flagstaff it is $18.95. If a pay period straddles December 31, hours worked on each side are paid at that side's rate.
3. Reset the tipped cash wage. Move tipped staff to $12.65 statewide and $13.00 in Tucson. Flagstaff tipped staff must already be at the full rate. Check that your tip records can show, for each pay period, that wages plus tips reached the new minimum.
4. Watch for pay compression. A shift lead earning $15.50 today will soon earn 15 cents less than a new hire at the state minimum. Decide on raises before the January schedule is published.
5. Recalculate overtime and premiums. Overtime and shift differentials are based on the regular rate, so they rise with the base wage. A scheduling tool that shows labor cost per shift at the new rate helps you see the January budget before it arrives.
6. Swap the posters and notices. Post the ICA's 2027 minimum wage poster and keep the earned paid sick time notice up. Flagstaff employers post the city's 2027 poster, give the written notice and sign the employer form; Tucson employers post the 2027 city poster.
7. Check the sick time balance on pay stubs. Confirm your pay stubs show EPST available, used and paid, and that your accrual cap matches your headcount (24 hours under 15 employees, 40 hours at 15 or more).
8. Confirm the figures with the ICA. The $15.65 rate comes from the ICA's 2027 poster; download the poster from azica.gov for your records before you change payroll.

If you also have staff in neighboring states, the same January 1 checklist applies at $17.40 in California; see our California minimum wage guide. For Nevada, Utah and New Mexico, check each state's labor department and our state table before the new year.

Frequently asked questions