The North Dakota minimum wage is $7.25 per hour, which matches the federal minimum wage. This minimum wage rate applies to most small businesses with one or more employees, with exceptions for tipped workers, youth workers, and trainees.
What you’ll learn
What you’ll learn
Key takeaways
- Minimum wage rates in North Dakota remain at $7.25 per hour, which is aligned with the federal minimum wage
- Many North Dakota employers choose to pay above the standard minimum wage to support cost of living and a living wage
- Tipped employees can be paid a minimum wage of $4.86 per hour, but their hourly pay with tips must still equal $7.25 per hour to comply with state and federal wage and hour laws
- Automated payroll software can support accurate payments for both nonexempt and exempt employees, as well as tipped workers, to maintain compliance and meet state wage laws
This comprehensive guide covers the state’s standard minimum wage, overtime laws, tipped wages and exemptions, labor laws, and the impact on payroll compliance for small businesses.
North Dakota minimum wage rules
The minimum wage rate in North Dakota is currently $7.25 per hour, which is in line with the federal minimum wage. Cities and towns are not permitted to enact their own higher minimum wage rates. A 2025 effort by some state lawmakers to raise the minimum wage to $9.25 per hour was proposed but ultimately did not pass.
Your business must pay accurate hourly wages and tax rates for all employees, even if you have businesses in other states with different state minimum wages. You must also maintain accurate payroll records for all your North Dakota team members.
Tipped employees and tip credits
The key exception to North Dakota’s minimum wage rate involves the tipped minimum wage. Tipped employees may be paid at a minimum wage of $4.86 per hour, with a maximum tip credit of $2.39 per hour. If tipped employee wages plus tips do not equal $7.25 per hour, your business must cover the wage gap to meet the state’s minimum wage.
For example, if a server earns $4.86 per hour at minimum wage plus $2 per hour in tips, the total would be $6.86 per hour. Your business would then be required to pay the additional 39 cents per hour to make up the difference, resulting in a $7.25 per hour rate.
Payroll tax rates vary across the United States, no matter where you are located. Your business is also responsible for accurate tax withholdings.
Overtime and hours worked
The Fair Labor Standards Act (FLSA), which establishes both minimum wage and overtime laws, requires that most hourly employees be paid 1.5 times their regular rate for any hours worked beyond 40 in a given workweek. This applies to most workers in North Dakota, including tipped workers.
For example, if a manufacturing worker earns $10 per hour and works 50 hours per week, that worker would be paid $400 for the first 40 hours and $150 (1.5 times the standard rate of $10) for the last 10 hours, for a total weekly payment of $550.
North Dakota overtime exemptions include the following:
- Professional and executive workers: Exempt employees include executives, administrators, and other professionals who earn at least $684 per week or $35,568 per year.
- Agricultural workers: Workers in the ag field are also generally exempt from North Dakota’s overtime rules.
- Other specific industries and roles: Domestic service workers and retail vehicle workers may also be exempt from federal overtime laws.
When in doubt, check with your organization’s attorney, HR chief, or the state labor board to make sure that you comply with North Dakota’s state overtime laws.
Exemptions: Apprentices, students, underage workers
In addition to tipped employees, North Dakota has several other exceptions when it comes to the minimum wage:
- Youth workers: Employees under 20 may be paid $4.25 per hour for their first 90 consecutive days of employment. After that time, you must adjust their pay up to the standard $7.25 per hour minimum wage.
- Students and learners: In addition, full-time students or students participating in a vocational training program may be paid a vocational training wage at 85% of the state’s minimum wage, which is $6.16 per hour.
- Other exceptions: Workers may also be paid less than the standard North Dakota minimum wage. This includes those who serve as nonprofit youth camp employees (hunting or fishing guides, cooks), golf course caddies, or casual babysitters who work fewer than 20 hours per week for fewer than three weeks, and family home care providers.
If North Dakota’s minimum wage ever exceeds the federal minimum wage, your North Dakota business will be required to pay workers the higher wage of the two.
Reduced wage rules for learners and apprentices
North Dakota allows a reduced minimum wage for learners and apprentices at 85% of the state’s standard minimum wage. This means that you can pay an apprentice for your business $6.16 per hour instead of $7.25 per hour.
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Living wage vs. statutory minimum
A living wage in North Dakota, which is the hourly wage an individual must be paid to support themselves and/or their families, is listed at $20.61 for one adult with no children, notably higher than the state’s minimum wage rate.
- The state’s living wage is $37.07 per hour for two adults, one of them working, and two children.
- For a family of two working adults with two children, $25.30 per hour is considered a living wage.
Businesses that choose to pay above the state and federal minimum wage support employee satisfaction, productivity, and retention, providing a significant competitive advantage in their industry.
Managing North Dakota payroll with confidence
Because North Dakota aligns with the federal minimum wage of $7.25 per hour, at first glance staying compliant might seem straightforward. Between calculating the $4.86 tipped minimum wage, navigating the 85% learner rate, and tracking youth workers through their first 90 days, there is still plenty for employers to manage. Plus, with the local living wage notably higher, many businesses are balancing these baseline rules with the need to pay competitive rates to retain staff.
Getting all these details right shouldn’t bury you in spreadsheets or have you worrying about tip makeup math. A dependable payroll process automates time tracking, handles tip makeups, and manages tax withholdings. If you’re ready to take the heavy lifting off your plate so you can focus on growing your team, sign up with OnPay. And our team is here to answer your questions!
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.