Vermont Minimum Wage 2026: $14.42 an Hour, Adjusted Every January 1

Vermont’s minimum wage is $14.42 an hour, effective January 1, 2026. Tipped service employees in hotels, motels, tourist places and restaurants can be paid $7.21, half the full rate, if tips make up the rest. The rate rises every January 1 by the smaller of 5% or the CPI-U increase, and it can never go down. The Vermont Department of Labor had not announced the 2027 rate as of September 24, 2026; it announced the last two in October.

Vermont at a glance

How Vermont sets its minimum wage

Vermont indexes its minimum wage by statute. Under 21 V.S.A. 384(a)(1), the rate was set at $12.55 on January 1, 2022, and "on each subsequent January 1" it rises by "five percent or the percentage increase of the Consumer Price Index, CPI-U, U.S. city average, not seasonally adjusted... for the 12 months preceding the previous September 1, whichever is smaller." The statute adds that "in no event shall the minimum wage be decreased," and if the federal minimum wage is ever higher, the federal rate applies instead.

Two practical consequences follow. The increase is capped: whatever inflation does, the rate can't rise by more than 5% in a year. And it never falls, even in a year with no inflation. The Vermont Department of Labor calculates and announces each new rate in the fall. The last three steps, from the department's announcements:

As of 24 September 2026, the department had not announced the rate for January 1, 2027. Based on the last two years, expect it in early October. We'll add it here when it's published rather than estimate it.

Vermont tipped minimum wage

Vermont's tipped wage is a fixed share of the full rate. Under 21 V.S.A. 384(a)(2), an employer in the hotel, motel, tourist place and restaurant industry may pay a service or tipped employee a basic wage of no less than one-half the minimum wage, which is $7.21 an hour in 2026. The lower rate applies only to employees of those businesses who customarily and regularly receive more than $120 a month in tips for direct and personal customer service.

The department's announcement is explicit that the tipped rate works only if tips close the gap: if an employee's tips don't bring them up to $14.42 an hour, the employer must make up the shortfall. A tipped employee at a business outside those industries, such as a salon or car wash, isn't covered by the half-rate provision in the statute. If you advertise a tipped role, Vermont's pay transparency law also requires the ad to say the job is tipped and give the base wage or range (21 V.S.A. 495p).

Who the Vermont minimum wage doesn't cover

Vermont's wage law defines "employer" as a person with two or more employees, and its definition of "employee" leaves out several groups (21 V.S.A. 383), including:

• individuals employed in agriculture or in domestic service in a private home;
• bona fide executive, administrative and professional employees, and outside salespeople;
• students working during the school year or regular vacation periods;
• taxi drivers and people delivering newspapers or advertising to homes.

Being outside Vermont's law doesn't mean no minimum wage applies. If the federal Fair Labor Standards Act covers the job, the federal $7.25 still does. A student working a summer job at a large employer, for example, may fall outside the state rate but inside the federal one. Vermont's statute sets a single statewide rate; it has no regional or small-employer rates beyond these exclusions.

What this means for hiring in Vermont

Vermont is one of the states where the minimum wage moves every January, so any ad, offer letter or pay scale tied to the minimum needs a review each fall once the new rate is announced. If you have five or more employees, your Vermont job ads must show pay or a pay range, which makes an outdated figure easy for candidates to spot. In most Vermont labor markets, frontline wages sit above the floor anyway, and the ad that leads with the actual rate and shift gets the reply. To see what a hire costs at the wage you plan to pay, including payroll taxes, use our employee cost calculator. For breaks, overtime, final pay, sick time and hiring rules, see our Vermont labor laws guide, and compare the state's posting rule on pay transparency laws by state.

Frequently asked questions

Part of Boostpoint’s minimum wage by state series.