Arizona Minimum Wage 2026: $15.15/hr Statewide, $17.85/hr in Flagstaff

Arizona minimum wage is set by the Fair Wages and Healthy Families Act (Proposition 206), a voter-approved initiative passed in 2016. The initiative raised the rate from $8.05/hr in 2016 to $12.00/hr by 2020, with annual inflation adjustments thereafter. Arizona also has a separate paid sick leave requirement under the same law.

What Is the Arizona Minimum Wage in 2026?

$15.15 per hour, effective January 1, 2026. This is an inflation adjustment from the 2025 rate. The rate is calculated by the Industrial Commission of Arizona based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Arizona's minimum wage has climbed every year since Proposition 206's scheduled increases ended: $13.85/hr in 2023, $14.35/hr in 2024, $14.70/hr in 2025, and now $15.15/hr in 2026. Because each January 1 adjustment is tied to the prior year's change in the CPI-W, the size of the raise moves with inflation rather than following a fixed dollar amount — some years bring a bigger jump than others.

For a full-time employee working 40 hours a week at Arizona's $15.15/hr minimum, that works out to $606.00 in gross pay per week, $1,212.00 every two weeks, and about $2,626.00 a month — $31,512.00 a year at 2,080 hours annually, the same figure used in the summary above. Non-exempt workers who put in more than 40 hours in a week are owed overtime at one-and-a-half times their regular rate, or $22.73/hr, for each additional hour, under both Arizona and federal overtime rules.

That $15.15/hr figure applies to hourly, non-exempt employees. Salaried workers who qualify as exempt under the Fair Labor Standards Act are governed by a separate weekly salary threshold instead of the hourly minimum wage. Arizona uses the federal exempt-salary threshold — $684 per week, or $35,568 per year — rather than setting its own higher figure the way California, New York, and a handful of other states do.

Arizona's Proposition 206 (2016) amended Arizona Revised Statutes Title 23 to establish a schedule of minimum wage increases and annual inflation adjustments. The law also requires employers to provide paid sick leave — one hour of sick leave for every 30 hours worked, up to 40 hours per year for large employers.

Paid Sick Leave Under Proposition 206

Proposition 206 didn't only raise Arizona's minimum wage — it also wrote a paid sick leave mandate into state law under the same Fair Wages and Healthy Families Act. Covered employees accrue one hour of paid sick time for every 30 hours worked, and large employers must allow workers to use up to 40 hours of it per year. That accrual is continuous: sick time builds up alongside a worker's regular pay each pay period rather than arriving as a single lump-sum grant on January 1. Time can generally be used for a worker's own illness or that of a family member, as well as for absences related to domestic violence, and unused hours generally carry over into the next year subject to the annual usage cap. Accrual and usage caps can differ for smaller employers, and the specifics are set by the Industrial Commission of Arizona rather than the headline wage rate — employers or workers with questions about their particular situation should confirm current rules directly with the ICA.

Flagstaff Minimum Wage

Flagstaff has its own minimum wage ordinance that is higher than the state rate. At $17.85/hr in 2026, Flagstaff's minimum wage is one of the highest in the country for a city of its size. The rate applies to all employees who work within Flagstaff city limits. Flagstaff's higher rate reflects the city's high cost of living, driven by housing costs and its status as a mountain town with limited developable land.

Flagstaff is one of only two Arizona cities with a local minimum wage ordinance on the books. Tucson also sets its own rate, but at $15.15/hr it simply matches the statewide minimum rather than exceeding it — working in Tucson currently comes with no different wage floor than working anywhere else in Arizona that hasn't adopted a local ordinance. Flagstaff is the outlier: at $17.85/hr, it pays $2.70/hr more than Tucson and the rest of the state, a gap worth roughly $5,616 a year for someone working full-time. Every other Arizona city and county defaults to the $15.15/hr state rate. That's possible because Arizona does not preempt local minimum wage laws the way many other states do — cities are free to set a higher rate if they choose, and so far Flagstaff is the only one that has gone meaningfully above the state floor.

Arizona Tipped Minimum Wage

Arizona allows a tip credit, but the tipped cash wage is $12.15 per hour — $3.00 less than the full $15.15/hr rate. This is one of the highest tipped cash wages in the country, behind only Hawaii ($12.75/hr). The $3.00 gap means Arizona tipped workers have significantly higher guaranteed base pay than tipped workers in states that use the $2.13/hr federal tipped minimum.

Among states that still let employers pay tipped workers less than the full minimum wage, Arizona's tipped cash wage ranks near the very top of that group. Hawaii's $12.75/hr is the only one higher; Arizona's $12.15/hr comes next, ahead of Florida's $10.98/hr and Colorado's $11.79/hr. That ordering can be counterintuitive — Colorado's overall minimum wage ($14.81/hr) is actually lower than Arizona's, and its tipped wage is lower too, not higher, since Colorado's $3.02/hr tip credit is slightly larger than Arizona's $3.00/hr credit. States that eliminate the tip credit entirely — including Washington, California, Nevada, Oregon, Alaska, Minnesota, and Montana — require the full state minimum wage for tipped employees as well, which puts their tipped cash wage above Arizona's. But among the states that still use a tip credit, Arizona's is comparatively small, and that's what keeps its cash wage so close to the top nationally.

In practice, a tipped employee working 40 hours a week in Arizona is guaranteed at least $486.00 in direct wages from their employer, on top of tips. If tips don't add up to at least $3.00/hr — $120.00 across that 40-hour week — the employer is legally required to make up the difference so the worker still takes home the full $15.15/hr minimum, or $606.00 for the week.

How Arizona Compares to Other Southwest States

At $15.15/hr, Arizona has the highest minimum wage in the Southwest. Neighboring states: California ($16.90/hr), Nevada ($12.00/hr for most employers), New Mexico ($12.00/hr), Utah ($7.25/hr), Colorado ($14.81/hr). Arizona is an outlier in a region where several states remain at the $7.25/hr federal floor, and its rate is the result of direct voter action rather than legislative action.

The tipped-wage side of that comparison shows an even wider split. Nevada requires the full $12.00/hr minimum for tipped and non-tipped workers alike, since it allows no tip credit at all. New Mexico goes the opposite direction: its $12.00/hr state minimum comes with a large $9.00/hr tip credit, so tipped workers there are guaranteed only $3.00/hr in direct wages — a fraction of Arizona's $12.15/hr floor. Utah, stuck at the $7.25/hr federal minimum since 2009, also caps its tipped wage at the federal $2.13/hr, and Utah Code §34-40-106 bars its own cities and counties from setting a higher local minimum wage, which helps explain why Utah's rate hasn't moved. Arizona imposes no such preemption, which is exactly why Flagstaff and Tucson are able to set their own local minimum wage rates in the first place.

Frequently Asked Questions

What is the minimum wage in Arizona for 2026?

Arizona's minimum wage is $15.15 per hour as of January 1, 2026, for most employees statewide. Flagstaff has its own higher local rate of $17.85/hr, and Tucson has adopted its own ordinance, which currently matches the state rate at $15.15/hr.

Is the Arizona minimum wage going up in 2027?

Almost certainly, though the exact figure hasn't been set. Arizona's rate adjusts every January 1 based on CPI-W inflation under Proposition 206, and it has risen every year since the law's scheduled increases ended — from $13.85/hr in 2023 to $15.15/hr in 2026. The 2027 rate will be calculated from CPI-W data later in the year.

Does Arizona's minimum wage apply to tipped employees?

Yes, but with a tip credit. Tipped employees in Arizona must be paid at least $12.15/hr directly by their employer — $3.00/hr less than the full $15.15/hr minimum wage — and the employer must make up the difference if a worker's tips don't cover that gap.

Why is Flagstaff's minimum wage higher than the rest of Arizona?

Flagstaff passed its own local minimum wage ordinance, which Arizona law permits since the state doesn't preempt local wage rates. At $17.85/hr, Flagstaff's rate sits $2.70/hr above the state minimum, reflecting the city's higher cost of living as a mountain town with a constrained housing supply.

Does Arizona's minimum wage law apply to small businesses?

Arizona's minimum wage law generally applies to employers regardless of size, which is broader than the federal minimum wage, which only covers businesses meeting certain revenue or interstate-commerce thresholds. Employers with questions about coverage for their specific situation should check current guidance from the Industrial Commission of Arizona.

How does Arizona's minimum wage compare to California's?

California's $16.90/hr minimum wage is $1.35/hr higher than Arizona's $15.15/hr. Both states restrict the tip credit compared to most of the country, but California eliminates it entirely, while Arizona still allows a $3.00/hr credit against the tipped cash wage.

Related: Colorado Minimum Wage Guide · Tipped Minimum Wage Explained · Arizona Minimum Wage Data Page