Alaska Payroll Compliance
Every rate, wage base, and threshold Alaska employers need for 2026 — sourced from the Dept. of Labor and Workforce Development — including the rare employee-side unemployment contribution and a mid-year minimum wage jump most calendars miss.
Minimum Wage & Hours
Alaska’s minimum wage rose to $14.00/hour on July 1, 2026 — the second of three staged increases under 2024’s voter-approved Ballot Measure 1, which also introduced Alaska’s first mandatory paid sick leave law. The next step, $15.00/hour, arrives July 1, 2027.
| Item | 2026 Value | Notes |
|---|---|---|
| Minimum wage (from Jul 1) | $14.00/hr | Second step of Ballot Measure 1's staged schedule |
| Tip credit | Not permitted | Tips never substitute for any portion of minimum wage |
| Youth wage | $4.25/hr | Minors, first 90 days of employment only |
| Mandatory paid sick leave | 56 or 40 hrs/yr | 56 hrs for 15+ employee employers; 40 hrs for smaller employers |
| 2027 scheduled increase | $15.00/hr (Jul 1) | Final staged step; annual CPI indexing begins after 2027 |
| Overtime rule | 40 hrs/week | Federal FLSA; no separate state daily overtime rule |
State Income Tax Withholding
Alaska has no personal income tax, and no local jurisdiction adds one at the payroll level. Federal withholding, FICA, and FUTA still apply in full.
| Item | 2026 Value | Notes |
|---|---|---|
| State income tax | None | No wage withholding required or possible |
| Local income tax | None | No Alaska city or borough imposes one on wages |
Unemployment Insurance (SUI)
Alaska is one of only three states — alongside New Jersey and Pennsylvania — that require employee-side unemployment contributions in addition to the employer’s. Alaska also uses a distinctive experience-rating input called the Average Quarterly Decline Quotient (AQDQ), which can penalize seasonal industries like tourism and fishing even when annual employment is stable.
| Item | 2026 Value | Notes |
|---|---|---|
| SUI taxable wage base | $49,700 | Set annually at 75% of the average Alaska annual wage |
| Employee contribution rate | 0.50% | Withheld by the employer and remitted alongside the employer's share |
| New employer rate | 1.99% | Applies until 2–3 years of quarterly reporting history accrue |
| Experienced employer range | 1.00% – 5.40% | Based on the Average Quarterly Decline Quotient (AQDQ) |
| Filing | Quarterly | Via the Alaska Dept. of Labor and Workforce Development |