Ohio Minimum Wage for Employers: 2026 Rate, 2027 Increase, Tipped Wage and Overtime

If you employ people in Ohio, the minimum wage question has two parts: which rate applies to your business, and what you owe when a worker goes past 40 hours in a week. This guide covers the Ohio minimum wage for 2026, the increase that takes effect January 1, 2027, the tipped cash wage, overtime, and the other Ohio wage and hour basics that come with running payroll.

Disclaimer: This article is informational content, not legal or tax advice. Wage and hour rules turn on the facts of each business, and coverage tests and exemptions depend on details this article cannot address. Talk to an Ohio employment attorney or a CPA before you make pay decisions in a complex situation.

Ohio minimum wage in 2026

The Ohio minimum wage is $11.00 an hour in 2026. The rate is set in the Ohio Constitution, not in a yearly bill. Ohio voters adopted the minimum wage amendment in 2006 (Ohio Const. art. II, sec. 34a), and the amendment ties each year's adjustment to the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The statute that implements the rate is ORC 4111.02.

Year	Ohio minimum wage	Tipped cash wage	Status
2026	$11.00 per hour	$5.50 per hour	In effect now
2027	$11.40 per hour	$5.70 per hour	Effective January 1, 2027, announced by the Ohio Department of Commerce on September 30, 2026

Which employers must pay the Ohio rate

The state rate does not cover every employer. It applies to employers with annual gross receipts above $405,000 in 2026, and that threshold rises to $420,000 for 2027. Employers at or below the threshold follow the federal minimum wage of $7.25 an hour.

Here is how that plays out. A business with $390,000 in 2026 gross receipts pays $7.25 an hour. A business with $460,000 in 2026 gross receipts pays $11.00 an hour. The threshold is a bright line, so a business whose receipts move across it needs to know when the change takes effect for payroll. Confirm with the Ohio Department of Commerce how gross receipts are measured for your business before you rely on the threshold, because the measurement method decides which side of the line you fall on.

Minors aged 14 and 15 also follow the $7.25 federal rate under the state rules. Confirm the youth rules with the Department of Commerce before you hire anyone in that age group.

The 2027 increase to $11.40

The Ohio Department of Commerce announced on September 30, 2026 that the minimum wage will rise to $11.40 an hour effective January 1, 2027. The tipped cash wage rises to $5.70 an hour, and the gross receipts threshold rises to $420,000.

The cost is easy to estimate. An employee paid exactly the minimum who works 40 hours a week earns $16.00 more per week at $11.40 than at $11.00, or about $832 more over 52 weeks. Budget for that before the new year, and check the Department of Commerce notice for the final figures. Because the rate is adjusted each year under the constitutional formula, review it every January.

The tipped wage

Ohio allows an employer to pay a tipped employee a cash wage of half the minimum wage: $5.50 an hour in 2026 and $5.70 an hour in 2027. Tips make up the rest of the full minimum.

The rule that catches employers is the shortfall. If an employee's cash wage plus tips does not add up to the full minimum wage for the hours worked, you must pay the difference. Track both the cash wage and the tips every pay period, so you can show that the total reached the full rate. Keep those records even when tips are strong, because the shortfall rule applies on every pay period, not only when tips are low on average.

Tips belong to the employee. Pooling tips with back of house staff, managers, or others is an area where the rules are narrow. Confirm the tip pooling rules with the Department of Commerce before you set up a pool.

Ohio overtime laws

Ohio does not write its own overtime formula. Ohio overtime follows the federal Fair Labor Standards Act (FLSA), so a nonexempt employee must receive 1.5 times the regular rate for each hour worked over 40 in a workweek. In practice that means:

• The 40 hour test runs per workweek. Hours are not averaged across two weeks, and a short week does not cancel overtime owed in a long one.
• The regular rate is more than the base hourly wage. Nondiscretionary bonuses and shift differentials are generally included, so a bonus earned for hours worked can raise the overtime owed.
• Exempt status turns on the duties test and the salary test under federal rules. A salary alone does not make someone exempt. Check the current federal thresholds with the US Department of Labor, because they have changed through rulemaking and court decisions.
• Tipped employees need a separate overtime calculation. Confirm how overtime works for them with the Department of Commerce, an attorney, or a CPA before you schedule them past 40 hours.

Here is a worked example for a nonexempt employee earning $12.00 an hour who works 46 hours in one workweek, with no bonuses. The employee is owed 40 hours at $12.00, or $480.00, plus 6 overtime hours at $18.00 (1.5 times $12.00), or $108.00. The gross pay for that week is $588.00.

Ohio employment laws beyond the wage rate

Minimum wage and overtime are the most visible wage rules, but a new Ohio employer has several other payroll items to set up:

• Workers' compensation: Workers' compensation coverage is purchased from the state fund run by the Bureau of Workers' Compensation (BWC). Set up coverage before your first employee starts work.
• Unemployment tax: Register your employer account with the Ohio Department of Job and Family Services, and confirm the timing for your first hire with that agency.
• Income tax withholding: Withhold Ohio income tax from employee wages. Many cities and villages also levy income taxes, so confirm the local withholding rules with the city or village tax office.
• Records: Keep time records, pay stubs, and tip records for every employee. Federal rules set minimum retention periods, so confirm the timeline with the US Department of Labor.

Business taxes and licenses that sit next to payroll

Ohio has no state general business license and no statewide general contractor license. Counties issue no business license either. If you sell taxable goods or services, you need a vendor's license, which the county auditor issues under a state statute. The county vendor's license application fee is $50 as of April 9, 2025.

The Commercial Activity Tax (CAT) is Ohio's gross receipts tax, and Ohio has no corporate income tax. The CAT rate is 0.26% of Ohio taxable gross receipts. For tax year 2025 and later, only businesses with more than $6 million in Ohio taxable gross receipts owe the CAT or must register. That $6 million test is separate from the $405,000 wage threshold, so do not mix the two when you plan. Filing details are at tax.ohio.gov.

Cities and villages tax business net profit under their own rates, so check your local rules as well. Trade names are registered with the Ohio Secretary of State, not the county, for $39. Ohio LLCs file no annual report. For entity filings and name searches, start at ohiosos.gov and the Ohio business search.

Check these figures with the named agency

• Ohio Department of Commerce: confirm the final 2027 notice, how gross receipts are measured, the youth rules, tip pooling, and overtime for tipped staff.
• US Department of Labor: current federal exemption tests and FLSA overtime rules.
• Bureau of Workers' Compensation and Ohio Department of Job and Family Services: coverage and employer registration timing for your first hire.
• County auditor: the vendor's license for taxable sales.

Quick checklist for 2026 and 2027

1. Measure annual gross receipts against $405,000 for 2026 and $420,000 for 2027.
2. If you are covered, pay at least $11.00 an hour in 2026 and $11.40 an hour from January 1, 2027.
3. Pay tipped staff at least $5.50 an hour in cash in 2026 or $5.70 in 2027, and cover any shortfall against the full minimum.
4. Pay 1.5 times the regular rate for nonexempt hours over 40 in a workweek.
5. Keep time, tip, and pay records, and confirm each agency rule before you rely on it.

If your receipts sit near the $405,000 or $420,000 threshold, or you pay tipped staff who work overtime, have a CPA or employment attorney review your payroll setup before the next pay run. The rules are informational here, and a qualified professional can apply them to your actual numbers.