Minimum Wage Compliance Calculator

Check whether your employees are paid at or above the applicable minimum wage and calculate any wage deficit or surplus.

Formulas Used

  • Effective Hourly Rate (hourly): Rate entered directly.
  • Effective Hourly Rate (weekly salary): Weekly Salary ÷ Hours Per Week
  • Effective Hourly Rate (annual salary): Annual Salary ÷ 52 ÷ Hours Per Week
  • Difference: Effective Hourly Rate − Applicable Minimum Wage
  • % Above/Below: (Effective Rate − Minimum Wage) ÷ Minimum Wage × 100
  • Weekly Deficit: |Difference| × Hours Per Week (when non-compliant)
  • Annual Deficit: Weekly Deficit × 52 × Number of Employees
  • Tip Credit: Minimum Wage − Cash Wage Paid = Tip Credit Claimed (tips must cover this gap)

Assumptions & References

  • Federal minimum wage: $7.25/hr (FLSA, 29 U.S.C. § 206). Unchanged since July 24, 2009.
  • State minimum wages reflect 2024–2025 rates; some states index annually to CPI. Always verify the current rate with your state labor department.
  • Where a state rate equals the federal rate, the federal rate applies.
  • The federal minimum cash wage for tipped employees is $2.13/hr (29 U.S.C. § 203(m)). Many states have higher cash wage floors or prohibit tip credits entirely.
  • Overtime (hours > 40/week) is not calculated here; overtime compliance is a separate FLSA requirement.
  • This calculator does not account for local (city/county) minimum wages, which may exceed state rates (e.g., Seattle, NYC, San Francisco).
  • Salary-basis test for exempt employees under FLSA white-collar exemptions is not evaluated here.
  • Results are estimates for informational purposes only and do not constitute legal advice. Consult an employment attorney or your state Department of Labor for compliance guidance.
  • References: DOL State Minimum Wage Laws; FLSA Overview.

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