South Dakota Minimum Wage 2026: $11.85 per Hour, Tipped $5.925
South Dakota's minimum wage is $11.85 per hour in 2026, up from $11.50, with a $5.925 tipped cash wage. The annual cost-of-living adjustment, the increase history since 2021, coverage and exemptions, overtime rules, and what a full-time minimum wage worker earns.
South Dakota's minimum wage is $11.85 per hour in 2026, effective January 1, 2026, up from $11.50 in 2025. Tipped employees must be paid a cash wage of at least $5.925 per hour, half the full rate. The rate is adjusted every January 1 for inflation, so the next increase takes effect January 1, 2027, with the new figure announced by the state in the fall.
- South Dakota's minimum wage is $11.85 per hour as of January 1, 2026
- Tipped employees earn a cash wage of at least $5.925, exactly half the minimum wage
- The rate rises every January 1 with the Consumer Price Index, rounded to the nearest 5 cents
- No city in South Dakota sets its own rate; Sioux Falls and Rapid City follow the state figure
- Overtime follows the federal rule: time and a half after 40 hours in a workweek
Current South Dakota Minimum Wage
South Dakota's minimum wage rose to $11.85 per hour on January 1, 2026, a 35-cent increase from the 2025 rate of $11.50. The South Dakota Department of Labor and Regulation publishes the rate on its minimum wage page and its 2026 minimum wage poster, and the US Department of Labor lists South Dakota at $11.85 in its state minimum wage table.
The rate comes from a 2014 ballot initiative that set the minimum wage at $8.50 in 2015 and required annual cost-of-living adjustments. Under SDCL 60-11-3.2, the Department of Labor and Regulation adjusts the rate each year by the increase in the Consumer Price Index, rounded to the nearest five cents, and the rate can never decrease.
South Dakota Minimum Wage vs Federal Minimum Wage
| Rate | South Dakota | Federal (FLSA) |
|---|---|---|
| Minimum wage | $11.85 per hour | $7.25 per hour |
| Tipped cash wage | $5.925 | $2.13 |
| Difference | $4.60 above federal | Baseline |
| Last changed | See schedule below | July 24, 2009 |
When state and federal rates differ, the employer must pay the higher one for any employee covered by both laws. In South Dakota the state rate is higher, so it governs for every covered employee, and the federal $7.25 is irrelevant except as a floor for the few workers the state law exempts. The federal rate has been $7.25 since July 24, 2009, and there is no scheduled federal increase. Our minimum wage by state guide compares every state.
Tipped Minimum Wage in South Dakota
South Dakota sets the tipped cash wage at 50 percent of the minimum wage, so it is $5.925 per hour in 2026. The employer may take a tip credit for the other half, up to $5.925, but only if the employee's cash wage plus tips reaches at least $11.85 for every hour worked. Employers must make up any shortfall.
South Dakota defines a tipped employee as one who customarily and regularly receives more than $35 a month in tips, slightly higher than the federal $30 threshold. Tips belong to the employee, and any tip pooling must be limited to employees who customarily receive tips.
| Item | South Dakota (2026) | Federal |
|---|---|---|
| Full minimum wage | $11.85 | $7.25 |
| Minimum cash wage for tipped employees | $5.925 | $2.13 |
| Maximum tip credit | $5.92 | $5.12 |
South Dakota Minimum Wage Increase Schedule
| Effective date | Minimum wage |
|---|---|
| Jan 1, 2021 | $9.45 |
| Jan 1, 2022 | $9.95 |
| Jan 1, 2023 | $10.80 |
| Jan 1, 2024 | $11.20 |
| Jan 1, 2025 | $11.50 |
| Jan 1, 2026 | $11.85 |
The next adjustment takes effect January 1, 2027. The Department of Labor and Regulation calculates it from the CPI change and typically announces the new rate in October. Because the formula tracks inflation, increases have ranged from 30 to 85 cents a year since 2021.
Local Minimum Wages in South Dakota
No South Dakota city or county sets a local minimum wage. Sioux Falls, Rapid City, and Aberdeen all use the statewide rate. State law is silent on local rates, but no municipality has attempted one.
How South Dakota Compares to Neighboring States
Employers that hire across state lines, or compete for workers with employers over the border, should know how South Dakota compares. Rates below are the US Department of Labor's figures as of July 1, 2026.
| State | 2026 minimum wage | Tipped cash wage |
|---|---|---|
| North Dakota | $7.25 | $4.86 |
| Minnesota | $11.41 | Full minimum wage (no tip credit) |
| Iowa | $7.25 | $4.35 |
| Nebraska | $15.00 | $2.13 |
| Wyoming | $7.25 | $2.13 |
| Montana | $10.85 | Full minimum wage (no tip credit) |
| South Dakota | $11.85 | $5.925 |
South Dakota sits in the middle of its region: Nebraska pays more, while North Dakota, Minnesota, Iowa, Wyoming and Montana pay less. Remote employees are generally owed the minimum wage of the state where they physically work, not where the employer is based, so a South Dakota company with staff in a neighboring state must apply that state's rate to those employees.
Who Is Covered and Who Is Exempt
South Dakota's minimum wage law (SDCL 60-11) covers most employers. The main exemptions, listed on the Department of Labor and Regulation's minimum wage FAQ, include:
- Employees of seasonal amusement or recreation establishments, in some circumstances
- Babysitters and outside salespeople
- Bona fide executive, administrative, and professional employees
- Certain agricultural workers
- Employees covered by a specific federal exemption
South Dakota also has a training wage: employers may pay employees under 20 years old a rate of $4.25 per hour for their first 90 consecutive days of employment, matching the federal youth wage. After 90 days, or once the employee turns 20, the full minimum wage applies. See our exempt vs non-exempt guide for the executive, administrative, and professional tests.
Overtime and the Minimum Wage
South Dakota has no state overtime law, so the federal FLSA applies: time and a half for hours over 40 in a workweek for non-exempt employees. There is no daily overtime.
Here is what a 45-hour week costs at the South Dakota minimum wage under the 40-hour rule:
| Line | Hours | Rate | Pay |
|---|---|---|---|
| Regular hours | 40 | $11.85 | $474.00 |
| Overtime hours | 5 | $17.77 (1.5x) | $88.88 |
| Gross pay for the week | 45 | $562.88 |
Overtime must be calculated on the employee's regular rate, which includes shift differentials and non-discretionary bonuses, not just the base wage. See our guide to overtime pay laws in the US and use the overtime calculator to check a specific week.
What a Minimum Wage Worker Earns in South Dakota
| Basis | Hourly | Weekly (40 hours) | Monthly (173.33 hours) | Annual (2,080 hours) |
|---|---|---|---|---|
| Full minimum wage | $11.85 | $474.00 | $2,053.96 | $24,648.00 |
| Tipped cash wage only | $5.925 | $237.20 | $1,027.85 | $12,334.40 |
These are gross figures before taxes and deductions, and they assume a full 40-hour week with no unpaid time off. A tipped employee's total pay must reach at least the full minimum wage row once tips are added. To convert a different hourly rate, use the salary to hourly calculator, and see our explainer on gross pay for what is included before deductions.
Employer Compliance Checklist
- Pay at least $11.85 per hour for every hour worked, including training, meetings, and time spent waiting or on call at the workplace
- If you take a tip credit, give written notice, track tips by pay period, and make up any shortfall to $11.85
- Display the required state and federal minimum wage posters where employees can see them
- Pay overtime at 1.5 times the regular rate after 40 hours in a workweek, and never average hours across weeks
- Keep accurate time records for at least three years; a time card calculator helps verify weekly totals before payroll runs
- Review exempt classifications against the salary and duties tests; a job title alone does not make an employee exempt
- Check the labor law compliance hub for related state rules on breaks, leave, and final pay
Frequently Asked Questions
What is the minimum wage in South Dakota in 2026?
$11.85 per hour, effective January 1, 2026. The 2025 rate was $11.50.
When will South Dakota's minimum wage increase next?
On January 1, 2027. The rate is adjusted each year by the change in the Consumer Price Index, rounded to the nearest five cents, and the state announces the new figure in the fall.
What is the tipped minimum wage in South Dakota?
$5.925 per hour in 2026, which is half the full minimum wage. Tips must bring the employee to at least $11.85 per hour.
Does South Dakota have a training wage?
Yes. Employees under 20 may be paid $4.25 per hour for their first 90 consecutive days with an employer.
Do Sioux Falls or Rapid City have a higher minimum wage?
No. All South Dakota cities follow the statewide rate of $11.85.
Can South Dakota's minimum wage go down?
No. State law provides that the annual adjustment can never reduce the rate.
How much does a full-time minimum wage worker earn in South Dakota?
$474 a week and $24,648 a year before taxes at $11.85 per hour, based on 2,080 hours.
Sources
- South Dakota DLR, Minimum Wage
- South Dakota DLR, 2026 Minimum Wage Poster (PDF)
- South Dakota DLR, Minimum Wage FAQ
- US DOL, State Minimum Wage Laws (July 1, 2026)
- US Department of Labor, Minimum Wages for Tipped Employees
Reviewed September 2026
Rates and rules on this page were checked against the US Department of Labor's state minimum wage tables (effective July 1, 2026) and the South Dakota sources listed above. Minimum wage laws change through legislation, ballot measures, indexing, and court decisions. Confirm the current rate with the state labor agency before setting pay, and see our labor law compliance guides for related rules.
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