Vermont Minimum Wage 2027: $14.91 an Hour, $7.46 for Tipped Workers
Short answer: Vermont's minimum wage rises 49 cents to $14.91 an hour on January 1, 2027, up from $14.42, and the tipped minimum wage rises from $7.21 to $7.46. The Vermont Department of Labor announced the change on November 9, 2026. The increase is automatic under state law.
What changes on January 1
The Department of Labor's release says the State's minimum wage "will increase from $14.42 to $14.91 per hour," that the tipped rate for service employees equals 50% of the full minimum wage, and that both take effect at the start of the new year as outlined in 21 V.S.A. § 384. For a full-time employee working 2,080 hours, the raise is worth about $1,019 a year before taxes: from $29,994 to $31,013.
The tipped wage: the employer must make up any shortfall
Vermont lets employers pay tipped service employees a lower hourly rate as long as the employee receives tips equal to or greater than the standard minimum wage during a given shift. The Department's release is explicit that when tips in a workweek do not bring the employee up to the full minimum wage, the employer must pay the difference. In practice a Vermont server's guaranteed floor is $14.91 an hour for the hours worked, however the pay is split between wage and tips.
How Vermont's rate gets set each year
Unlike states with a fixed schedule (Michigan, Rhode Island) or ones that announce rates from a formula in late summer (Colorado, Minnesota), Vermont announces in the fall: this year's announcement came on November 9. The press release cites 21 V.S.A. § 384. Local reporting on the announcement describes the formula as the lesser of 5% or the CPI-U increase measured August to August, which was 3.4% this year. That is the reporters' description of the statute; check the statute itself if you need the exact legal language for compliance.
What it means for your federal tax return
A Vermont worker paid $14.91 who works 6 hours of FLSA overtime a week for 50 weeks would earn about $2,237 in qualified overtime premium and have gross pay near $37,722. That premium would be fully deductible under the federal overtime deduction, worth roughly $268 in 2027 federal income tax for a single filer (estimate; standard deduction and 2027 brackets only). Use the overtime calculator for your numbers, and read how state and federal overtime rules differ.
Frequently asked questions
What is Vermont's minimum wage in 2027?
The Vermont Department of Labor announced on November 9, 2026 that the minimum wage rises from $14.42 to $14.91 per hour on January 1, 2027, an increase of $0.49.
How much is the Vermont tipped minimum wage in 2027?
The "Basic Tipped Wage Rate" is 50% of the full minimum wage, so it rises from $7.21 to $7.46 per hour on January 1, 2027. If tips do not bring the employee up to the full minimum wage for the workweek, the employer must make up the difference.
How does Vermont calculate the raise?
Under 21 V.S.A. § 384 the wage adjusts every January. Press coverage of the announcement reports that the adjustment is the lesser of 5% or the rise in the CPI-U (not seasonally adjusted, August to August) and that the index rose 3.4% this year. We confirmed the dollar amounts and the statute on the Department's release; the 5% cap and 3.4% figure come from news reports of the announcement.
Does the Vermont minimum wage apply to small employers?
The U.S. Department of Labor's state table says Vermont's law applies to employers of two or more employees.
Sources and citations
Every dollar figure on this page was checked against the official pages below on November 14, 2026. If an agency updates its guidance, the agency page controls.