Effective January 1, 2026, South Dakota’s minimum wage for non-tipped employees will increase to $11.85 per hour, up from $11.50 in 2025, and the South Dakota minimum wage for tipped employees will become $5.925 per hour. The employer must make sure the employees receive no less than the current minimum wage and must keep a record of all tips received by employees.
These annual adjustments are based on the Consumer Price Index to account for the rising cost of living.
Key Details
- Non-Tipped Employees: $11.85/hour
- Tipped Employees: $5.925/hour (total compensation, including tips, must meet the non-tipped rate)
- Effective Date: January 1, 2026
EXEMPTIONS:
- Seasonal amusement or recreation establishments, babysitters or outside salespersons. See SDCL 60-11-3 and 60-11-3.1.
- Training wage. See SDCL 60-11-4.1.
- Apprentices, person with a developmental disability. See SDCL 60-11-5.
Why the Change?
South Dakota’s non-tipped minimum wage will be adjusted on an annual basis, increasing at the same rate as the cost of living as measured in the Consumer Price Index published by the U.S. Department of Labor. The amount of the increase will be rounded up to the nearest 5 cents. The minimum wage cannot decrease. The new adjusted rate will be announced on this web page for the following year no later than Oct. 15 of each year.
Source(s):
https://dlr.sd.gov/employment_laws/minimum_wage.aspx
