Arizona Minimum Wage Increases for 2026: What You Need to Know
Arizona is continuing its steady progress toward higher wages across the state
Whether you’re an employer preparing for payroll updates or an employee wondering how your paycheck may change, these upcoming adjustments are important to understand. This overview breaks down the statewide increase, local city wage differences, who is affected, who isn’t, and examples of what the changes might look like in real life.
Statewide Minimum Wage Increase
Starting January 1, 2026, Arizona’s minimum wage will increase from $14.70 per hour to $15.15 per hour. This annual adjustment is tied to inflation and is part of Arizona’s Fair Wages and Healthy Families Act.
For tipped employees — such as restaurant servers, bartenders, and other workers who earn tips — the minimum cash wage will increase from $11.70 to $12.15 per hour. Employers must still ensure that the employee’s total earnings (wages plus tips) reach at least the full minimum wage for each hour worked.
Local Minimum Wage Rates in Arizona
A few Arizona cities set their own minimum wage rates that exceed the state requirement. For 2026, these are the projected changes:
Flagstaff
Flagstaff continues to maintain one of the highest minimum wages in the state. On January 1, 2026, the minimum wage is expected to increase to:
$18.35 per hour
No separate tipped wage — all employees must earn the full minimum wage before tips
Tucson
Tucson’s local ordinance also lifts wages above the state minimum. For 2026, Tucson’s rates are expected to be:
$15.45 per hour standard minimum wage
$12.45 per hour tipped minimum wage, provided total pay (wages + tips) reaches $15.45 per hour
These city-specific rates reflect local cost of living differences and policy decisions that aim to strengthen wage protections for workers in those communities.
Who Will Be Impacted?
Workers Who Benefit
Many workers across Arizona will see direct financial improvements, including:
Hourly employees who currently earn at or near the state minimum wage
Tipped workers whose base wage will increase
Employees working in Flagstaff or Tucson, where higher local wage standards apply
Part-time, seasonal, and entry-level workers earning minimum wage
Employers Who Need to Adjust
Businesses throughout the state should prepare for the changes:
Employers must update payroll systems to reflect new 2026 minimum wage rates
Businesses operating in Flagstaff or Tucson must follow those cities’ higher standards
Companies with tipped staff need to ensure total compensation meets legal requirements
Budgeting and staffing plans may need adjustment to accommodate increased labor costs
Who Will Not Be Impacted?
While many workers will benefit from the wage increases, some will see little or no change:
Employees already earning well above the new minimum wage
Workers who fall under specific local exemptions (e.g., Tucson’s exemption for casual babysitting in a private home)
Independent contractors, who are not considered employees under wage laws
Businesses located outside cities with higher local wage rates, unless they voluntarily raise wages
Examples of Real-World Impact
Here are a few simple examples to visualize how the 2026 changes may affect take-home pay:
Statewide minimum wage worker
2025: $14.70/hr → 2026: $15.15/hr
Increase of about $18 more per week for a 40-hour workerTipped server
2025: Base wage $11.70/hr → 2026: $12.15/hr
Slightly higher guaranteed earnings, with tips continuing to supplement incomeFlagstaff worker
2025: $17.85/hr → 2026: $18.35/hr
Approximately $20 more per week for full-time employeesTucson worker
2025: $15.00/hr → 2026: $15.45/hr
About $18 more per week at 40 hours
Even small increases add up, helping workers meet rising costs of living while requiring businesses to plan ahead for payroll changes.
In Summary
Arizona’s minimum wage increase for 2026 is part of an ongoing commitment to ensuring wages keep pace with inflation and cost of living. Employers should begin preparing early to ensure compliance, while workers can look forward to increased earnings in the new year.
If your business or job is located in Flagstaff or Tucson, be sure to review those cities’ specific rules so you’re ready for the higher local wage requirements.
