Minnesota paychecks in 2026: what changed
The biggest change in Minnesota for 2026 is Paid Leave, a new deduction on most paychecks. The withholding formula and minimum wage were updated too.
The changes
- New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
- Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
- Tips and overtime deductions for 2025–2028 — see below.
- Paid Leave starts: premium 0.88% of wages, up to $185,000; employers can take up to 0.44% from your pay.
- New withholding formula for 2026: $5,300 per W-4MN allowance, rates 5.35% to 9.85%.
- Minimum wage: $11.41 from January 1, 2026; it rises to $11.87 on January 1, 2027 (training wage $9.68).
Tips and overtime in 2026
New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).
These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.
Work out your 2026 Minnesota paycheck →
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Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
- IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
- Social Security Administration — 2026 wage base of $184,500
- IRS — tips and overtime deductions
- Minnesota Department of Revenue — 2026 Minnesota Withholding Tax Instructions and Tables (Computer Formula, page 34) — allowance $5,300; single and married charts 5.35% to 9.85%; divide by payroll periods, may round to the nearest dollar; no W-4MN → single, zero allowances; supplemental 6.25%
- Minnesota Department of Revenue — 2026 Form W-4MN, Minnesota Employee Withholding Certificate — Single / Married / Married but withhold at higher Single rate; allowances; head of household adds one allowance
- Minnesota Department of Revenue — Definition of Wages (Withholding Fact Sheet 9) — Minnesota follows the federal provisions for determining taxable wages
- Minnesota DEED — Paid Leave small employer premium rate designation — 0.88% of wages up to the Social Security limit rounded to the nearest thousand ($185,000); small employers 0.66%; employers can deduct up to 0.44% from employees
- Minnesota Statutes 268B.14 — Paid Leave premiums — employers pay at least 50% of the premium (at least 25% of the standard rate for small employers); wage cap tied to the Social Security limit
- Minnesota Statutes 268B.01 — Paid Leave definitions — taxable wages: up to the Social Security limit rounded to the nearest $1,000; wages as in 268.035 subd. 29
- Minnesota Statutes 268.035, subd. 29 — Wages — 401(k) and cafeteria-plan salary reductions are wages
- Minnesota Department of Labor and Industry — Minimum wage in Minnesota — $11.41 from Jan. 1, 2026; 90-day training wage (under 20) $9.31; $11.87 and $9.68 from Jan. 1, 2027; no tip credit
- Minnesota Department of Labor and Industry — Overtime laws — overtime after 48 hours in a workweek at 1.5 times the regular rate; federal law uses 40
- Minnesota Statutes 181.101 — Wages; how often paid — at least once every 31 days; commissions at least every three months
- Minnesota Department of Labor and Industry — Employment termination — fired: within 24 hours of demand; quit: next payday more than five days after quitting, within 20 days
- Minnesota Department of Labor and Industry — Wage claim — Labor Standards 651-284-5075
- City of Minneapolis — Minimum wage increases to $16.37 for all employers
- City of Saint Paul — Minimum wage — $16.37; micro businesses $14.25