Montana Payroll Compliance
Every rate, wage base, and threshold Montana employers need for 2026 — sourced from the Dept. of Revenue and Dept. of Labor & Industry — including membership in the exclusive two-bracket income tax club and a distinctive dual-track minimum wage rule.
Minimum Wage & Hours
Montana’s minimum wage is $10.85/hour for 2026, adjusted annually by CPI. Montana runs a distinctive dual-track rule: very small businesses not covered by the federal FLSA may pay a lower $4.00/hour rate, but any employee covered by federal commerce law must still receive the higher of the state or federal rate.
| Item | 2026 Value | Notes |
|---|---|---|
| Statewide minimum wage | $10.85/hr | Annual CPI adjustment each January 1 |
| Small, non-FLSA-covered business rate | $4.00/hr | Only for businesses with $110,000 or less in annual sales and no interstate commerce activity |
| Overtime rule | 40 hrs/week | Federal FLSA; no separate state daily overtime rule |
| Local wage ordinances | None | No Montana city or county sets its own minimum wage |
State Income Tax Withholding
Montana is one of just five states nationwide — alongside Arkansas, Kansas, Massachusetts, and North Dakota — running a genuine two-bracket income tax system, following simplification legislation in recent years. Montana also includes the federal standard deduction in its income starting point.
| Item | 2026 Value | Notes |
|---|---|---|
| Bracket structure | 2 brackets | Simplified from a prior multi-bracket system |
| Income starting point | Federal standard deduction included | Montana is one of a handful of states using this approach |
| Local income tax | None | No Montana city or county imposes one |
Unemployment Insurance (SUI)
Montana’s SUI wage base was $45,100 in 2025; the exact 2026 figure had not been finalized in the sources available at the time of this writing. One multi-state comparison placed Montana’s overall UI cost burden as a share of total wages among the highest in the country.
| Item | Value | Notes |
|---|---|---|
| 2025 SUI wage base | $45,100 | 2026 figure not yet confirmed — verify via Montana DLI |
| Administering agency | Dept. of Labor & Industry | Quarterly filing, standard schedule |
| Relative UI cost burden | Among the highest nationally | Per a Minnesota House Research Dept. multi-state UI cost comparison |